Tahoe expands presence in Canada, to acquire Whitney JV from Goldcorp
Latin America-focused Canadian miner Tahoe Resources (TSX, NYSE:THO) is expanding its presence home by acquiring Goldcorp's (TSX: G; NYSE: GG) 2% net smelter return royalty for production at Bell Creek Mine for $12.5 million.
The parties have also signed a letter of intent that would increase Tahoe’s ownership interest in their Whitney joint venture to 100%. Goldcorp’s current interest of 30% would be reduced to a 2% net smelter royalty, Tahoe said in a statement.
The move follows Tahoe’s deal with Lake Shore Gold in February, which added two low-cost mines in Northern Ontario to its portfolio.
The Bell Creek Complex, located about 20 km northeast of Timmins, Ontario, consists of an underground mine and processing facility and is 100%-owned by Tahoe. It is very close to the Whitney Project, currently a 70% (Tahoe) – 30% (Goldcorp) joint venture with Tahoe as the operator.
The move follows the company’s deal with Lake Shore Gold (TSX:LSG) in February, which added two low-cost mines in Northern Ontario to its portfolio.
Tahoe’s chair and chief executive, Kevin McArthur, said Bell Creek and Whitney were two key components of the company’s strategy to grow gold production in Timmins to over 250,000 ounces per year by 2020.
The Vancouver-based miner, which was spun out of Goldcorp in 2010, has been one of the most aggressive buyers in the industry. It bought Rio Alto Mining last year to expand into Peru, and in February this year, after the deal with Lake Shore, it hinted it could be interested in Goldcorp's Porcupine operation, also located in Timmins, Ontario.