Canada's Goldcorp, Teck team up to develop Chile mine projects
By Susan Taylor
TORONTO (Reuters) - Goldcorp Inc (G.TO: Quote) and Teck Resources Ltd TCKb.TO will form a joint venture to develop neighboring mines in Chile to cut costs as metal prices languish at multiyear lows, the Canadian miners said on Thursday.
Named Project Corridor, the combination of Goldcorp's El Morro gold and copper project with Teck's Relincho copper and molybdenum mine targets initial capital costs of $3.5 billion to bring the properties to production. Earlier studies put El Morro's development cost at $3.9 billion and Relincho's at $4.5 billion.
Under the development plan, a conveyor will transport ore from El Morro to a single line mill at Relincho. The two projects are about 40 kilometers (25 miles) apart, in the Huasco Province in Chile.
Mining executives have spoken for years about the benefits of teaming up on projects, but weak metal prices and soaring development costs in recent years have made joint ventures even more attractive.
Goldcorp Chief Executive Officer Chuck Jeannes told Reuters last year that developing El Morro and Relincho with Teck was "the kind of thing one might want to look at."
With a single desalination plant, port, transmission line and concentrator, the joint venture will reduce infrastructure requirements, the companies said in a statement. The two mines will also use a common tailings facility at the Relincho site.
A phased mine construction will also allow future expansions to be funded from project cash flows, reducing initial funding requirements, the companies said.
Also on Thursday, Goldcorp said it had acquired the 30 percent interest in El Morro that it did not own from New Gold Inc (NGD.TO: Quote) for $90 million in cash and a 4 percent gold stream on future production. Continued...