Goldcorp secures 70% interest in El Morro Copper-Gold Project through deal with New Gold

Goldcorp (TSX:G, NYSE, GG) announced that it had entered into an agreement with New Gold (TSX & NYSE Amex: NGD) which will allow it to acquire a 70% interest in the El Morro Copper-Gold Project in Chile.

Goldcorp has agreed to advance $463 million to New Gold so that it can exercise an option to acquire a 70% interest in the El Morro Project from Xstrata Copper Chile, a subsidiary of diversified mining group, Xstrata PLC (LSE: XTA).  New Gold already holds a 30% interest in El Morro.  Goldcorp will then acquire the New Gold subsidiary which holds the 70% interest in El Morro for $50 million in cash.

Post transaction, Goldcorp will own 70% of El Morro, with New Gold retaining its original 30%.

"In El Morro, Goldcorp has identified an ideal project with which to re-enter one of the best mining jurisdictions in South America," said Chuck Jeannes, Goldcorp President and CEO "...El Morro is a natural fit for our company. With full construction of Penasquito nearing completion, the project team that delivered what will be one of the largest mines in the world on schedule and on budget will now bring their considerable expertise to bear in building this major project. Our strong balance sheet provides the freedom to begin advancing El Morro toward commercial production immediately upon the closing of this transaction..."

El Morro hosts proven and probable reserves of 6.7 million ounces of gold and 5.7 billion pounds of copper, with a further 2.2 million ounces of gold and 1 billion pounds of copper in the measured and indicated category, making it one of the largest undeveloped copper-gold projects in the world.  http://www.proactiveinvestors.com/companies/news/3516/goldcorp-secures-70-interest-in-el-morro-copper-gold-project-through-deal-with-new-gold-3516.html