GOLD-COPPER: Barrick, Goldcorp set up Cerro Casale JV

CHILE – Vancouver-based Goldcorp is buying 50% of the Cerro Casale gold-copper project in the Maricunga district and will form a 50:50 joint venture with Barrick Gold of Toronto. Goldcorp is buying out the 25% interest belonging to Kinross Gold and a 25% interest from Barrick, dropping Barrick’s share to 50% from 75%. Kinross will receive US$260 million in cash at closing and an additional US$40 million if a positive development decision is made at Cerro Casale. Goldcorp will assume a US$20 million payment obligation due to Barrick under the existing Cerro Casale shareholders agreement when commercial production begins. Kinross will retain a 1.25% royalty payable by Goldcorp on 25% of gross revenues, but Kinross will forego the first US$10 million. [caption id="attachment_1003717829" align="alignleft" width="300"] With a new partner (Goldcorp) and less financial liability, Barrick may move Cerro Casale forward.[/caption] In return for Barrick’s 25% interest in Cerro Casale, Goldcorp will fund Barrick’s first US$260 million of expenditures on the project and will spend an equivalent amount on its own behalf for a total commitment of US$520 million. Further, Goldcorp will also fund the joint venture’s acquisition of a 100% interest in the adjacent Quebrada Seca property belonging to Kinross. Goldcorp has granted Barrick a 1.25% royalty interest on 25% of gross revenues from both Cerro Casale and Quebrada Seca. In a separate arrangement, Goldcorp will acquire all the issued and outstanding shares of Exeter Resource Corp. in Vancouver through a share exchange deal valued at approximately US$247 million. Exeter’s primary asset is its 100% owned Caspiche gold-copper project 10 km north of Cerro Casale. That property has contained resources of 23.0 million oz. of gold and 3.9 billion lb. of copper, and will be consolidated with the Cerro Casale and Quebrada Seca properties. Cerro Casale is one of the world’s largest undeveloped gold and copper deposits, containing 23.2 million oz. of gold and 5.7 billion lb. of copper in proven and probable reserves. The feasibility study completed in 2010 outlined an open pit mine and heap leaching. More information about Cerro Casale is posted at www.Barrick.com.