Barrick to Acquire 70% Interest in El Morro Projectadmin
Barrick Gold Corporation announced that it has entered into an agreement with Xstrata Copper Chile S.A. (“Xstrata”), a wholly owned subsidiary of Xstrata Plc, to acquire Xstrata’s 70% interest in the El Morro project for $465 million in cash.
El Morro is an advanced gold-copper project located in the Atacama Region in Chile. As reported by Xstrata, total measured and indicated gold resources are approximately 8.3 million ounces and total measured and indicated copper resources are approximately 6.3 billion pounds (100% basis)(1). As a requirement of its original earn-in to the El Morro project, Xstrata spent approximately $70 million on a feasibility study, which Barrick is also acquiring directly from Xstrata as part of this transaction.
“The acquisition of Xstrata’s 70% interest in the El Morro project will add another large, high quality gold-copper resource to Barrick’s portfolio. Chile is an attractive country for mine development and one where Barrick has considerable experience and expertise,” said Aaron Regent, President and Chief Executive Officer. “El Morro is also located near our Pascua-Lama and Cerro Casale projects where we will look to capture potential construction and future operating synergies. Our immediate focus will be on optimizing the current feasibility study and further exploring the associated large land position, which we believe has considerable promise.”
The project is 70 kilometers north of Barrick’s 100% owned Pascua-Lama project, which is entering construction, and 110 kilometers south of Barrick’s 50% owned Cerro Casale project. El Morro adds approximately 800 square kilometers of exploration ground in the Atacama Region and extends Barrick’s land position just north of the Company’s 2,600 square kilometer area in the Frontera District surrounding Pascua-Lama in Chile and Argentina and the Veladero mine in Argentina.
“We see significant potential to grow the resource,” said Rob Krcmarov, Senior Vice President of Global Exploration. “We also see a number of strong drill-ready targets outside of the resource area and have planned an aggressive exploration program to test these.”
The other 30% interest in El Morro is owned indirectly by New Gold Inc. (“New Gold”). New Gold holds a right of first refusal to purchase Xstrata’s 70% interest in El Morro and has until January 11, 2010 to exercise such right. Barrick’s agreement to purchase Xstrata’s interest in El Morro is subject to the expiration or waiver of the New Gold right of first refusal and other customary closing conditions. The transaction is expected to close prior to January 30, 2010.
Barrick’s vision is to be the world’s best gold company by finding, acquiring, developing and producing quality reserves in a safe, profitable and socially responsible manner.