Glencore to sell option in Canadian gold mine
Mining and commodities giant Glencore (LON:GLEN) is allegedly mulling a sale of its option in the Horne gold project owned by Canadian junior Falco Resources (TSX-V:FPC).
According to unnamed sources quoted by Reuters, Glencore has appointed BofA Merrill Lynch to sell its 65% option in the Quebec-based project as the Swiss firm presses on with asset sales.
Falco Resources fully owns the Quebec-based Horne project, but Glencore has the option to buy back the 65% stake in the mine it inherited when it bought Xstrata.
While Falco Resources fully owns the project, Glencore originally inherited the mine when it acquired Xstrata, which gives it the right to buy back its stake.
The Horne project includes the former producing Horne and Quemont mines, as well as the undeveloped Horne 5 deposit, close to Canada's re-known Val d'Or.
The Horne mine, discovered by EH Horne in 1920 and operated by Noranda from 1926 to 1976, was one of the richest VMS mines in Canada as it produced over 54 Mt @ 6.1 g/t gold, 13 g/t silver and 2.22% copper.
The Quemont mine, located 600 metres north of Horne, produced approximately 2 million ounces of gold and 400 million pounds of copper between 1949 and 1971.
Glencore has 90 days to complete the sale, but if it cannot struck a deal in that period, it would likely buy its 65% stake and then sell it on in an auction, Reuters’ source said.