Goldcorp sells Mexico mine in $438 million deal, focus on core assets

Thu Jan 12, 2017 1:25pm EST
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By Susan Taylor

TORONTO (Reuters) - Goldcorp Inc (G.TO: Quote) agreed to sell its Los Filos mine in Mexico to Leagold Mining Corp LMCh.V in a deal valued at $438 million on Thursday, as the world's No. 3 gold miner by market value focuses more squarely on core assets.

Goldcorp, which put Los Filos on the block last year under a push to prioritize its biggest and best mines, said the transaction will help it grow net asset value per share and is expected to close in the first quarter of 2017.

Under the transaction, Vancouver-based Goldcorp will get $279 million in cash, $71 million in Leagold shares and tax receivables worth about $88 million.

Shares of Goldcorp, which separately announced the $18 million cash sale of its Cerro Blanco project in Guatemala to Bluestone Resources BSR.V on Wednesday, nudged about 1 percent higher on Toronto and New York exchanges at mid-session Thursday.

RBC Capital Markets analyst Stephen Walker said the sale price broadly matched his net asset value estimate of $462 million in a note to clients.

Los Filos has just a little over two years of reserves left, but Leagold appears to be interested in its underground mining potential, said Desjardins Securities analyst Michael Parkin.

Leagold said its executives, who developed Endeavour Mining (EDV.TO: Quote) into a west African bullion producer, want to replicate that buy and build strategy in Latin America.

Leagold Chief Executive Officer Neil Woodyer was Endeavour's founder and company chairman, Frank Giustra, is an established Canadian mining financier. They hold about 20.4 percent and 9.2 percent of Leagold shares respectively.   Continued...

President and Chief Executive Officer of Goldcorp., Chuck Jeannes' shadow is seen on the wall while he delivers a speech at the annual general meeting held at the Pan Pacific Convention centre in Vancouver, British Columbia May 18, 2011. REUTERS/Ben Nelms/File Photo