Goldcorp signs deal to sell Los Folis Mine for $438m

15 January 2017 (Last Updated January 15th, 2017 18:30)

Canadian miner Goldcorp has entered a share purchase agreement with Leagold Mining to sell Los Filos Mine in Mexico.

Goldcorp signs deal to sell Los Folis Mine for $438m

Canadian miner Goldcorp has entered a share purchase agreement with Leagold Mining to sell Los Filos Mine in Mexico.

Under the agreement, Leagold Mining will pay $438m as consideration to Goldcorp that includes $279m in cash, subject to certain closing adjustments.

Goldcorp will receive around $71m in Leagold as common shares and will retain certain tax receivables that amount to $88m.

With the closure of this transaction, Goldcorp expects to recognize a reversal of a 2015 impairment in mining interests at Los Filos of around $30m to $60m on a pre-tax basis. Goldcorp president and CEO David Garofalo said: “The divestiture of Los Filos is consistent with our strategy of focusing on our core camps to drive increasing net asset value per share.

“We thank the team at Los Filos for their commitment and dedication and we wish them continued success as part of Leagold. We will work closely with the team at site to ensure a smooth transition and look forward to working with Leagold to continue to add value at Los Filos.”

Situated in Mezcala of Guerrero in Mexico, the Los Filos operation consists of two open-pit mines called Los Filos and El Bermejal, as well as one underground mine.

The open-pit operation at the site started commercial production in January 2008.

"The divestiture of Los Filos is consistent with our strategy of focusing on our core camps to drive increasing net asset value per share."

In 2015, gold production from the mine reached 272,900oz.

After a detailed assessment of operating options in the same year, Goldcorp revised the estimated recoverable value from this mine and reduced its mine life.

Currently, the mine host slightly more than two years of reserves, reported Reuters.

The sale is subject to customary closing conditions and it is expected to close by the first quarter of this year.

In this transaction, Scotia Capital acted as financial advisor to Goldcorp.


Image: Los Filos Mine. Photo: courtesy of Goldcorp/ Fickr.