Goldcorp purchases El Morro Chilean gold mine

Goldcorp purchases El Morro Chilean gold mine

Goldcorp (NYSE:GG) has announced it will buy New Gold’s (TSX:NGD) 4% gold stream on the El Morro project, for a cash fee of US$65 million.

The El Morro deposit is one half of the NuevaUnion project, after a joint venture between Goldcorp and Teck Resources (NYSE:TECK) combined the Relincho and El Morro deposits, in the Atacama region of Chile.

At the time the merger was announced, Goldcorp bought New Gold’s 30% share in El Morro for $90 million cash, plus the stream.

“The purchase of the stream from New Gold is consistent with our strategy of optimising our portfolio to drive increasing net asset value per share,” said David Garofalo, president and chief executive officer.

“El Morro is a world-class deposit, located in one of the best mining jurisdictions in the Americas.”

NuevaUnion is expected to cost around $3.5 billion to bring into production and will have a 32-year lifespan, producing an average of 190,000 tonnes of copper and 315,000 ounces of gold a year, over the first decade.

Both partners hope to conduct pre-feasibility studies on the project by the second half of the year.