FROM MINE TO OURS

Gold mining companies say shared infrastructure may be the way of the future

Canada’s two biggest gold mining companies team up to develop Chilean site,

Canada’s two biggest gold miners, Barrick Gold Corp. and Goldcorp Inc., are teaming up to develop a gold-copper deposit in Chile as part of a complex chain of transactions.

Under terms of separate deals announced Tuesday, Goldcorp will buy Kinross Gold Corp.’s 25-per-cent interest in the Cerro Casale project in the Maricunga mineral belt for $260 million upfront, as well as other deferred payments and a royalty. It will acquire another 25 per cent from Barrick, reducing the latter’s stake in the site to 50 per cent, making it an equal partner with Goldcorp. Meanwhile, through the acquisition of Exeter Resource Corp., Goldcorp will buy the Caspiche project just 10 kilo- metres from Cerro Casale.

By combining Cerro Casale and Caspiche, Goldcorp believes it can reduce the capital burden of development, eventually generating a better return, CEO David Garofalo said.

“It will be a long time before we put a shovel in the ground on these properties,” Garofalo said. “But if we don’t tuck them into our portfolios and advance them, we’re never going to get them to a point where we actually can make an investment case.” Miners are wading back into thedeal pool following years of austerity. Goldcorp will continue to look for opportunities, Garofalo said, although he noted that large deposits are increasingly difficult to find.

Goldcorp will spend $260 million toward Barrick’s portion of the initial development costs over five years, $85 million of which will be covered by giving Barrick half of Caspiche once that deal closes and it’s added to the asset.