Goldcorp, Teck combine projects, create new $3.5 billion mine in Chile
Canadian mining giants Goldcorp (TSX:G), (NYSE:GG) and Teck Resources (TSX:TCK.A & TCK.B) (NYSE:TCK) have finished combining their respective El Morro and Relincho projects in Chile.
The projects, located approximately 40 kilometres apart in Chile’s copper-rich Atacama region, are now part of a 50/50 joint venture momentarily named “Project Corridor,” the Vancouver-based miners said in a joint statement.
The new copper-gold project, expected to help slash development costs as metal prices have dropped to multiyear lows, will require an initial investment of US$3.5 billion, the companies said in August. The miners said the combined operation would provide much of the additional funding needed to construct future phases.
Before joining El Morro and Relincho projects, their estimated costs were $3.9 billion and $4.5 billion respectively.
On Tuesday, Goldcorp also announced that it had completed the transaction to acquire New Gold's 30% interest in the El Morro for $90 million in cash, along with a 4% gold stream payable on future gold production from the property.
The two 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.
Both miners will work on a pre-feasibility study beginning in late 2016, which is expected to be completed by the end of 2017.