| VANCOUVER, March 28
VANCOUVER, March 28 Barrick Gold Corp
and Goldcorp Inc, the world's No. 1 and No. 3 gold miners
by value, have agreed to team up to potentially develop gold
projects in northern Chile, Goldcorp said on Tuesday, as the
industry starts to put money into growth again.
In a move aimed at reducing development costs and risks,
Goldcorp and Barrick will form a 50-50 joint venture to study
building gold mines in Chile's Maricunga belt, Goldcorp said.
That includes the Cerro Casale project, which is one of the
world's biggest undeveloped gold deposits.
After five years of painful belt-tightening as the price of
gold fell, the world's biggest gold miners have started to
loosen their purse strings to build mines and find new deposits
to replenish falling production and reserves.
The transaction fits Goldcorp's strategy of teaming up with
other big miners to develop large deposits to share the cost and
technical risk. Barrick and others suffered high-profile cost
blowouts on mine developments during the last gold price boom.
"The last thing the industry needs is another Sudbury,
another Nevada, where you are building duplicate infrastructure
on the same deposits," Goldcorp Chief Executive David Garofalo
said in an interview, speaking about two well-known mining
In a complex series of transactions costing Goldcorp around
$445 million upfront in cash and shares, the Vancouver-based
miner has agreed to buy fellow Canadian miner Kinross Gold's
25 percent stake in Cerro Casale and all of its Quebrada
Seca exploration project for an initial $260 million in cash.
Simultaneously, Goldcorp also agreed to buy mine exploration
and development company Exeter Resource Corp and its
flagship Caspiche project for around $185 million in shares. The
project is located 10 km (6 miles) north of Cerro Casale.
Goldcorp will also acquire a 25 percent stake in Cerro
Casale from Barrick, reducing Barrick's holding in the project
from 75 percent to 50 percent. Goldcorp will pay for the stake
by funding all initial expenditures on Cerro Casale and by
contributing the Caspiche project into the joint venture.
Cerro Casale contains proven and probable reserves of 23.2
million ounces of gold and 58.7 million ounces of silver. It
also contains 5.8 billion pounds of copper.
A February 2010 feasibility study on Cerro Casale by Kinross
envisaged a large open pit mine with a 20-year life and a heap
leach processing operation to be built for an initial capital
cost of $4.18 billion.
Garofalo declined to give any capital cost estimate for mine
construction, saying Goldcorp and Barrick still need to do
several years of studies. The addition of Caspiche and other
factors mean a total cost "re-think" is needed, he said.
A decision on whether to go ahead with mine construction is
five to seven years away, Garofalo said.
Goldcorp in 2015 partnered with diversified miner Teck
Resources to develop neighboring mines in Chile to
cut costs on building roads and other infrastructure, and to
reduce their environmental footprint.
(Reporting by Nicole Mordant in Vancouver; Editing by Leslie