Goldcorp wins legal battle vs. Barrick
Ontario Court justice Herman Wilton-Siegel sided with Goldcorp Inc. in its ownership dispute with Barrick Gold Corp. over the ownership of the El Morro copper and gold deposit in Chile.
El Morro could hold more than three times the amount of gold that Goldcorp produced last year and be a full mine as soon as 2017, with a projected mine life of 20 years.
“We are pleased that the court has confirmed our position that our acquisition of El Morro was completely proper and consistent with the relevant agreements and Chilean law and that Goldcorp’s 70-percent ownership share of the project has now been clarified for our shareholders,” said Goldcorp president and chief executive officer Chuck Jeannes.
Toronto-based Barrick had claimed that Vancouver-based Goldcorp illegally obtained control of the project through violations of agreements among the mine’s shareholders, while Goldcorp said it acted fairly, The Globe and Mail reported.
“Barrick will review the Court’s ruling in detail and will consider its options, including a possible appeal in this case,” the company said in a statement.
Goldcorp acquired 70 percent of El Morro through an intermediary. In January, 2010, New Gold Inc. owned 30 percent of the mine and agreed to buy the remainder from Xstrata PLC of Switzerland for $463-million (U.S.), and then to sell the stake to Goldcorp for that amount plus $50-million in cash.
Goldcorp also advanced the funds for New Gold’s purchase from Xstrata.
Barrick says the transactions violated its own agreement with Xstrata in October, 2009, to buy the El Morro holding from the Swiss company. New Gold inappropriately exercised an option to buy Xstrata’s stake, according to Barrick.
Barrick said it continued to believe that New Gold Inc. improperly exercised its right of first refusal, unlawfully interfering with the company’s right to acquire the stake in El Morro from Xstrata.
El Morro is a copper-gold development project located in northern Chile, approximately 800 km (500 miles) north of Santiago. Proven and probable gold reserves at Dec. 31, 2011 totaled 181 t (5.84-million oz) of gold and 4.36-billion lbs of copper on a 70-percent basis. By comparison, Goldcorp is forecast to produce some 80 t (2.6-million oz) of gold this year.
But the ruling does not mean a green light for the project, which saw construction halted in May after the Andean country’s Supreme Court suspended approval of an environmental permit until authorities can investigate deficiencies identified by an appeals court in Antofagasta, in Chile’s rich northern mining region, The Globe and Mail reported.