Goldcorp, Teck combine projects, create new $3.5 billion mine in Chile

Goldcorp, Teck combine projects, create new $3.5 billion mine in Chile

Goldcorp's El Morro gold and copper project will be part of the company's new venture, with fellow Canadian miner Teck Resources. (Image from archives)

Canadian mining giants Goldcorp (TSX:G), (NYSE:GG) and Teck Resources (TSX:TCK.A & TCK.B) (NYSE:TCK) said on Thursday they have agreed to form a joint venture to combine and develop neighbouring projects in Chile.

Goldcorp, the world’s most valuable gold miner, will add its El Morro project and diversified miner Teck (TSX:TCK.B) will contribute its Relincho project to the new Project Corridor joint venture, which will be owned 50-50 by the two Vancouver-based firms.

The projects are located approximately 40 kilometres apart in Chile’s copper-rich Atacama region, the miners said in a joint statement.

The venture, which will slash development costs as metal prices have dropped to multiyear lows, is estimated to require an initial investment of US$3.5 billion. The miners said the combined operation would provide much of the additional funding needed to construct future phases.

The target is a considerable reduction from the standalone development costs of the El Morro and Relincho projects, which were $3.9 billion and $4.5 billion respectively.

The companies estimate that Corridor will have a 32-year lifespan and produce an average of 190,000 tonnes of copper and 315,000 ounces of gold a year, over the first decade.