Goldcorp and Barrick Gold will become 50-50 partners on the Cerro Casale gold-copper mine in Chile, Barrick announced in a statement.
The new partnership will be formed with Goldcorp’s purchase of 25 percent interest in the project from Kinross Gold which is exiting the project. This purchase, in addition to the 25 percent interest already held by Goldcorp will create the 50-50 joint venture with Barrick Gold.
Goldcorp will commit to spending $520 million, of which $260 million covers Barrick’s initial share. Goldcorp is also buying 100 percent of Kinross’s interest in the Quebrada Seca exploration project adjacent to Cerro Casale and will give Barrick a royalty interest on gross revenues derived from both projects.
In a third deal, Goldcorp agreed to buy Exeter Resource Corp. in a share-swap arrangement that values Exeter at C$247 million ($184 million). Exeter’s main asset is the Caspiche project located about 10 km (6.2 miles) north of Cerro Casale.
Commodity prices have been increasing and investment money is returning to the mining industry. Bloomberg reported that exploration budgets are rising and miners are looking to acquire assets through partnerships or outright purchases. Goldcorp Chief Executive Officer David Garofalo said in an interview in January that the miner’s future growth strategy will probably focus on partnerships with other senior miners as it looks for ways to share the burden of developing multibillion-dollar projects.
Meanwhile, Barrick executives, including Executive Chairman John Thornton and President Kelvin Dushnisky, have said they would consider partnerships as a way of developing assets in Chile and elsewhere.
“This agreement will allow us to direct capital elsewhere in our portfolio, while ensuring shareholders retain exposure to the optionality associated with one of the largest undeveloped gold and copper deposits in the world,” Dushnisky said in the statement.
Goldcorp has joint ventures with Barrick at the Pueblo Viejo mine in the Dominican Republic and with Vancouver-based Teck Resources Ltd. at the Nueva Union project in Chile. Last year Goldcorp bought Canadian explorer Kaminak Gold Corp. in a C$520 million share swap.