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Goldcorp enters into agreement with New Gold Inc. |
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Written by REM
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VANCOUVER, BC — Goldcorp Inc. announced the execution of a binding agreement with New Gold Inc. , whereby New Gold will exercise its right of first refusal and acquire the 70 percent interest in the El Morro project held by Xstrata Copper Chile S.A. (Xstrata Chile), a wholly owned subsidiary of Xstrata Plc.
Goldcorp will advance $463 million to New Gold to fund the exercise of the right of first refusal by a New Gold subsidiary. Following the acquisition of the 70 percent interest by the New Gold subsidiary, Goldcorp will acquire that subsidiary from New Gold. Goldcorp will pay New Gold $50,000,000 in cash upon closing of the subsidiary acquisition, and has agreed to amend certain terms of the El Morro Shareholders Agreement, including with respect to New Gold's capital funding obligations.
El Morro is an advanced stage copper-gold project located in a mining friendly jurisdiction in north-central Chile, Region III, approximately 80 kilometres east of the city of Vallenar. On a 100 percent basis, El Morro contains proven and probable reserves of 6.7 million ounces of gold and 5.7 billion pounds of copper, with an additional 2.2 million ounces of gold and 1.0 billion pounds of copper in the measured and indicated resource categories.
"In El Morro, Goldcorp has identified an ideal project with which to re-enter one of the best mining jurisdictions in South America," says Chuck Jeannes, Goldcorp, president and CEO. "The foundation of our peer-leading growth profile is built on high quality, long-lived assets with low cash costs in politically stable jurisdictions throughout the Americas. As well, we look for large land positions with strong organic growth potential."
www.goldcorp.com
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