Barrick Gold Corp. and Kinross Gold Corp. completed the sale of a combined 50% stake in the Cerro Casale gold project in Chile to Goldcorp Inc., the companies said in separate June 9 releases.
The consideration comprised US$260 million in cash at closing, including US$20 million for the Quebrada Seca gold project, also in Chile, as well as a contingent payment of US$40 million following a positive construction decision for Cerro Casale.
Goldcorp also agreed to assume a US$20 million payment obligation under the existing Cerro Casale deal with Barrick, payable on the start of commercial production at the project.
Barrick and Kinross will each be entitled to a 1.25% royalty based on 25% of gross revenues from all metals sold at Cerro Casale and Quebrada Seca, with Kinross foregoing the first US$10 million.
Kinross expects to use the proceeds from the sale for its organic development projects and to further strengthen its balance sheet.
Barrick and Goldcorp formed a 50/50 joint venture to manage Cerro Casale.
Following the completion of Goldcorp's acquisition of Exeter Resource Corp., the joint venture will control 20,000 hectares of land in the Maricunga District, including Cerro Casale and Exeter's Caspiche gold project.