Goldcorp will acquire New Gold’s 30% interest in the El Morro copper-gold project in Chile
Goldcorp Inc. on Thursday said it would acquire New Gold Inc.’s 30% interest in the El Morro copper-gold project in Chile and then combine El Morro with Teck Resources Ltd.’s nearby Relincho asset into a single $3.5 billion project.
Goldcorp and Teck, both Canada-based mining companies, said the combination would reduce the project’s development costs and its environmental footprint and thereby improve returns for shareholders. The $3.5 billion estimated cost of bringing the project into production would be less than half the cost of developing the projects separately, they said.
The move comes as mining companies around the world cope with tumbling metal prices and fears of a slowdown in China, the world’s biggest consumer of commodities. The commodity-price swoon has put pressure on many to slash costs and focus on the most promising projects.
“The combination of El Morro and Relincho is consistent with our focus on maximizing value from our asset portfolio,” Goldcorp Chief Executive Chuck Jeannes said in a statement. “We now have an improved development approach that we expect to significantly decrease initial capital requirements and increase financial returns, while ensuring the project is developed in partnership with our neighbors, creating lasting benefits for residents in the region and our shareholders.”
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