Goldcorp sells Escobal silver assets for C$505 million
05 May 2010
One of the world's leading gold producers Goldcorp Inc has agreed to sell its Escobal silver deposit in Guatemala to Vancouver-based start-up company Tahoe Resources Inc (Tahoe) for approximately C$505 million, as part of its strategy to sell non-core assets and strengthen the company's gold portfolio.
Tahoe, a private company owned by former Goldcorp president and CEO Kevin McArthur, will acquire Escobal from Goldcorp's subsidiaries in a stock-and-cash deal consisting of issue of Tahoe shares representing 40 per cent ownership in the company after its proposed initial public offering (IPO), and the balance of approximately C$230 million in cash.
Goldcorp president and CEO Chuck Jeannes said, ''This transaction enables our shareholders to realise full value for a grass roots Goldcorp discovery that has grown into a world-class silver deposit.''
''Goldcorp's continued focus on simplifying and strengthening our gold portfolio through the sale of non-core assets has allowed us to fund our peer-leading suite of growth projects without dilution to our shareholders. The sale of Escobal is the latest example of that strategy,'' Jeannes added.
Tahoe's primary objective is to develop Escobal into a profitable silver operation. The company intends to use the IPO proceeds for the cash portion of the Escobal purchase as well as for engineering studies and continuing exploration of the project.
The Escobal silver project is located in Southern Guatemala, about 120km east of Goldcorp's Marlin mine. About 47,300 metres of extensive exploratory drilling conducted in the area revealed high-grade silver deposit consisting of 130 million ounces of reserves in the indicated category and a further 188 million ounces of inferred resources.
