Engineering & Mining Journal

APR 2017

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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NEWS-LEADING DEVELOPMENTS 4 E&MJ • APRIL 2017 Goldcorp, Barrick Partner to Develop Gold Projects in Chile Goldcorp entered into an agreement with Barrick Gold to leverage potential syner- gies within the Maricunga gold belt, lo- cated in the Chile's Atacama Region in northern Chile, through a 50:50 joint venture. A number of steps are being taken in order for this transaction to take place, including the acquisition of Kinross Gold's 25% interest in Cerro Ca- sale and its 100% interest in Quebrada Seca; an additional 25% interest in Cerro Casale from Barrick; and the Caspiche project from Exeter Resource Corp. Cerro Casale is one of the world's larg- est undeveloped gold and copper deposits. "We envisage jointly advancing the Cerro Casale and Caspiche gold deposits in a similar arrangement to our NuevaUnión project in Chile with Teck Resources," said David Garofalo, president and CEO of Goldcorp. "The joint venture with Barrick has the potential to allow us to consoli- date infrastructure to reduce capital and operating costs, reduce the environmental footprint and provide increased returns compared to two stand-alone projects." For the 25% stake it is acquiring from Barrick, Goldcorp will fund Barrick's first $260 million of expenditures on the pro- ject following the formation of the joint venture, and will spend an equivalent amount for a total project investment commitment of $520 million. Under the agreement, Goldcorp must spend a minimum of $60 million in the two- year period following closing, and then $80 million in each successive two-year period. In the event that Goldcorp does not spend the minimum amount, 50% of any shortfall will be paid directly to Barrick in cash. In addition, Goldcorp will pay Barrick $40 mil- lion in cash upon a construction decision. Goldcorp will also fund the Cerro Ca- sale joint venture's acquisition of a 100% interest in the adjacent Quebrada Seca property from Kinross upon closing. Gold- corp has granted Barrick a 1.25% royalty interest on 25% of gross revenues derived from metal production from both Cerro Casale and Quebrada Seca. Under the new 50:50 ownership struc- ture, the project's management team will be subject to oversight and direction by a joint venture board comprised of an equal number of nominees from Barrick and Goldcorp. The transaction is expected to close in the second quarter of 2017 and is subject to customary closing conditions. Goldcorp entered into a separate $247 million transaction to acquire Exeter, whose sole asset is the Caspiche project, located approximately 10 kilometers (km) north of Cerro Casale. A gold-copper por- phyry system with an oxide gold zone on surface and a high-grade gold-copper core, Caspiche has the potential to be devel- oped as a high-tonnage, long-life mining operation. The plan has been unanimous- ly approved by the boards of directors of Goldcorp and Exeter. Following closing of this acquisition, Goldcorp will commit the Caspiche project to the Cerro Casale joint venture. Half of the acquisition costs in- curred by Goldcorp will be deducted from the $260 million expenditure commitment mentioned previously. For Kinross Gold's 25% interest in the Cerro Casale project and its 100% interest in the Quebrada Seca project, Goldcorp will pay Kinross $260 million in cash at closing, which includes $20 million for Quebrada Seca. It will pay an additional $40 million in cash, following a construction decision for Cerro Casale. Goldcorp will assume a $20 million obligation due to Barrick Gold under the existing Cerro Casale shareholders agreement, which is payable when commer- cial production at Cerro Casale commences. It will pay a 1.25% royalty based on 25% of gross revenues from all metals sold at Cer- ro Casale and Quebrada Seca, with Kinross foregoing the first $10 million. Additionally, on closing Kinross will enter into a water supply agreement with the Cerro Casale joint venture. After cer- tain conditions are met, the agreement Correction/Clarification: The news article on page 4 of the March issue of E&MJ about commissioning at Pretium Re- sources' Brucejack mine in northwest British Columbia stated that the project's Valley of the Kings deposit hosted proven and probable reserves of 6.9 million oz of gold in 13.6 million mt grading 15.7 g/ mt gold. Those figures were out of date. Current proven and probable mineral reserves in the Valley of the Kings depos- it, as reported by Pretium in December 2016, stand at 8.1 million oz of gold in 15.6 million mt grading 16.1 g/mt gold. Pretium also reports that off-take de- tails for Brucejack concentrate have not been finalized. The company currently anticipates that flotation concentrate will be trucked offsite to be loaded in bulk form into rail cars or shipping containers for transport to smelting facilities. Mineral Reserves and Resources (100% basis) Metric tons Gold Copper Silver Cerro Casale (millions, Mt) (M oz) (B lb) (M oz) Proven & Probable 1,197.6 23.2 5.8 58.7 Measured & Indicated 0, 296.6 0 3.4 1.1 10.2 Inferred 0, 495.4 0 6.0 2.1 16.5 Caspiche Measured & Indicated 1,403.6 23.0 1.2 54.2 Inferred 0, 198.1 0 1.8 0.5 0 5.8 Acquiring the Caspiche project and a 50% stake in Cer- ro Casale, Goldcorp grows its interest in the Maricunga gold belt near the border with Chile and Argentina.

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