Xstrata Copper has signed an agreement with Canadian mine operator Barrick Gold to sell its 70% stake in El Morro SCM, the owner of the Chilean El Morro copper-gold project, for $465m.
The all-cash deal, which is subject to several stipulations prior to conclusion, is likely to finalised by 30 January 2010.
Xstrata Copper chief executive Charlie Sartain said the sale of its El Morro stake would enable it to better direct its resources to other priority development projects, five of which will be progressing to the final decision stage over the coming months.
Sartain said the feasibility study at El Morro had demonstrated strong prospects and the company’s agreement with Barrick will create more value as part of Barrick’s portfolio than Xstrata’s.
“This is in view of the potential synergies with Barrick’s existing interests in the region and Xstrata Copper’s significant pipeline of organic growth projects in a number of countries, including the north of Chile,” Sartain said.
Xstrata Copper will continue to be active in Chile through its 44% stake in the Collahuasi joint venture Altonorte Metallurgical Complex, Lomas Bayas copper mine and the Energía Austral hydropower plant project.