The gold producer owns 70% of the mining project but will provide for the complete US$3,900 million through a credit system agreed by both companies.
Notwithstanding the El Morro gold project is 70% owned by the Canada-based Goldcorp, the mining company will fund the entire cost including the remaining 30% that corresponds to New Gold. Why? Both companies have sealed an agreement by which the latter is committed to deliver to its partner the 80% of the income obtained from the mine output until the US$1,200 million debt is completely settled.
The 4.58% annual interest rate applied to the operation will be valid until the entire debt is paid off. These figures, however, are subject to the confirmation of the final project cost and also depend on the El Morro project obtaining all the permits that are still in a pending condition.
In a presentation New Gold made last week it was detailed that the El Morro gold and copper project, located in the high-hills in the Atacama Region, will have a production cost of US$550 per gold oz and US$1.45 per copper pound. These are values that, in accordance with current market situation, would generate an annual EBITDA of about US$290 million for the partners.
But that is not all: Last year the partnership made explorations around the adjacent areas, specifically in the La Fortuna location, a deposit that during the initial prospecting appears to have positive expectations.
Currently, El Morro was called to a halt by a Justice order that required the execution of surveys to determine the effects of this investment as regards to the application of the Convention 169 of the ILO which resulted in the temporary suspension of the project environmental authorization process. The junior partner of the project expects this situation is solved before the end of the year.
Some time ago the definition of the ownership of the mine deposit arose a legal dispute between Barrick and Goldcorp.
25 febrero, 2013