Goldcorp announced in late November completion of transactions necessary for the formation of a 50/50 joint venture with Teck Resources to develop their respective El Morro and Relincho projects in the Atacama region of Chile as a single project. The combined project currently has the interim name of Project Corridor.
Formation of the joint venture followed completion of purchase by Goldcorp of New Gold’s 30% interest in the El Morro project, giving Goldcorp 100% ownership of the project. Goldcorp paid New Gold $90 million in cash, and New Gold will have a 4% gold stream payable on future gold production from the El Morro property.
New Gold will make ongoing payments of $400/oz for gold delivered under the streaming contract for the initial 217,000 oz and thereafter will make ongoing payments of $400/oz plus a 1% per annum adjustment, compounded annually, commencing on the first anniversary of the streaming agreement.
Following closing of the New Gold transaction, Goldcorp and Teck completed their transaction to combine El Morro and Relincho into a single project. The sites are separated by a distance of about 40 km. Based on the results of a preliminary economic assessment (PEA), the companies plan to construct a conveyor to transport ore from the El Morro site to a single-line mill at the Relincho site.
The integrated project is expected to have a mine life of at least 32 years. Initial-stage development contemplates plant throughput capacity in the range of 90,000 to 110,000 mt/d, producing an average of approximately 190,000 mt/y of copper and 315,000 oz/y of gold in concentrates over the first full 10 years of operation.
Combined project infrastructure will include a single desalination plant, a single port, a single transmission line, a single concentrator, and a common tailings facility.
Capital cost to bring Project Corridor into production is currently targeted at $3.5 billion.
