(All amounts in $US unless stated otherwise)
TSX: G NYSE: GG
SANTIAGO,
Chile, Aug. 27, 2015 /CNW/
- GOLDCORP INC. ("Goldcorp") (TSX: G, NYSE: GG) and Teck
Resources Limited ("Teck") (TSX: TCK.A & TCK.B, NYSE: TCK)
today announced an agreement to combine their respective El Morro
and Relincho projects, located approximately 40 kilometres apart in
the Huasco Province in the Atacama region of Chile, into a single project.
Teck and Goldcorp will contribute their
respective project interests into a 50/50 joint venture. The
combined project will have the interim name of Project
Corridor.
"Combining these two neighbouring assets is a
common sense approach that allows us to consolidate infrastructure
to reduce costs, reduce the environmental footprint and provide
greater returns over either standalone project," said Don Lindsay, President and CEO of Teck. "Through
Project Corridor, we will work to establish meaningful
relationships with the community, Indigenous Peoples and other
stakeholders that will help guide the project's development and
create greater value for all parties."
"The combination of El Morro and Relincho is
consistent with our focus on maximizing value from our asset
portfolio," said Chuck Jeannes,
President and CEO of Goldcorp. "We now have an improved development
approach that we expect to significantly decrease initial capital
requirements and increase financial returns, while ensuring the
project is developed in partnership with our neighbours, creating
lasting benefits for residents in the region and our
shareholders."
Based on the results of a Preliminary Economic
Assessment ("PEA"), Project Corridor contemplates a conveyor to
transport ore from the El Morro site to a single line mill at the
Relincho site. We expect that this approach will provide a number
of key benefits, including:
- Reduced environmental footprint: Project Corridor will
reduce infrastructure requirements, including utilizing a single
desalination plant, a single port, a single transmission line, a
single concentrator and a common tailings facility. As a result,
the environmental footprint of Project Corridor will be
significantly less than the combined footprint of the standalone
projects. The use of a common tailings facility located at the
Relincho site responds to concerns expressed by local communities
regarding the location of the previously proposed El Morro tailings
facility within the agriculturally important Huasco River
watershed.
- Lower cost, improved capital efficiency: Common
infrastructure will significantly reduce project capital costs and
ongoing operating costs. Further, the PEA contemplates a phased
development approach that will allow future expansions to be
funded from project cash flows, thus significantly reducing the
initial funding requirement. As a result, the initial capital cost
to bring Project Corridor into production is targeted to be
US$3.5 billion1, with
further capital required to construct future phases being funded
largely from project cash flows. The feasibility studies of the
standalone El Morro project and standalone Relincho project had
previously estimated development costs at US$3.9 billion2 in 2011 dollars and US$4.5
billion3 in 2013
dollars, respectively.
- Optimized mine plan: Project Corridor is one of the
largest undeveloped copper-gold-molybdenum projects in the
Americas. The integrated project allows for the optimization of
both resources, resulting in a longer mine life of at least 32
years, based on existing proven and probable reserves, with the
scope for further extensions given the significant exploration
potential across the combined property. Initial stage development
contemplates a single line mill and concentrator facility with an
initial capacity in the range of 90,000– 110,000 tonnes per day to
produce an average of approximately 190,000 tonnes of copper and
315,000 ounces of gold per year over the first full 10 years.
- Enhanced community benefits: Project Corridor is
expected to provide significant economic benefits to the local
region. An estimated 4,000 jobs will be created during the
construction phase and 1,400 jobs during operation. The increased
mine life will provide longer-term employment opportunities and
community investment.
- Community engagement: Project Corridor will undertake
extensive engagement with communities, Indigenous Peoples and other
stakeholders to help guide the project's development. In the months
ahead, project staff will be meeting with the community and
Indigenous Peoples to explain the Project Corridor concept and work
collaboratively to define the project's engagement model. This
process will be facilitated by two independent organizations with
expertise in community engagement and experience in enhancing
social performance and socially sustainable outcomes for resource
projects.
In combination with community consultation, a
Pre-Feasibility Study is expected to commence in early 2016 and be
completed in 12 – 18 months. Assuming a positive Pre-Feasibility
Study, a Feasibility Study would be initiated thereafter.
Goldcorp's El Morro project contained proven and
probable reserves of 8.9 million ounces of gold and 6.5 billion
pounds of copper as at December 31,
2014. Teck's Relincho project contained proven and probable
reserves of 10.1 billion pounds of copper and 464 million pounds of
molybdenum as at December 31, 2014.
Based on the December 31, 2014
mineral reserve figures reported by Goldcorp in respect of El Morro
and Teck in respect of Relincho, the proven and probable reserves
of Project Corridor would contain approximately 16.6 billion pounds
of copper, 8.9 million ounces of gold, and 464 million pounds of
molybdenum. Further work on Project Corridor, including updating
reserves estimates at December 31,
2015, may lead to revised mineral reserve estimates that
could be higher or lower than the combined figure presented. See
Appendix A "Reserve and Resource Disclosure" below for important
additional information regarding the mineral reserves and resources
of the projects, including commodity price assumptions.
Goldcorp also announced earlier today that it has
reached an agreement to acquire New Gold's 30% interest in the El
Morro project for $90 million in cash
upon closing, along with a 4% gold stream on future gold production
from the El Morro property. Closing of the transactions
contemplated by this news release is subject to customary
conditions and is expected to occur in the fourth quarter of
2015.
CIBC World Markets acted as financial advisor to Teck and
Goldcorp.
For more information about Project Corridor, go to
www.proyectocorredor.cl.
About Goldcorp
Goldcorp is a leading gold producer focused on
responsible mining practices with safe, low-cost production
throughout the Americas. A portfolio of long-lived, high-quality
assets positions Goldcorp to deliver long-term value.
Headquartered in Vancouver,
Canada, its shares are listed on the Toronto Stock Exchange
under the symbol G and the New York Stock Exchange under the symbol
GG.
About Teck
Teck is a diversified resource company committed
to responsible mining and mineral development with major business
units focused on copper, steelmaking coal, zinc and energy.
Headquartered in Vancouver,
Canada, its shares are listed on the Toronto Stock Exchange
under the symbols TCK.A and TCK.B and the New York Stock Exchange
under the symbol TCK.
1 Unescalated, as at August
2015
2 Updated Feasibility Study & Basic Engineering
Final Report for El Morro Project 4,000 Case, Rick Collins (Hatch), Walter Bergholz (El Morro), Feb 23, 2012.
3 The Relincho Project Feasibility Study, Bechtel
Chile Ltda and Teck Resources Ltda.
Qualified Persons
The El Morro scientific and technical information
contained in this news release has been reviewed and approved by
Gil Lawson, P.Eng., Vice President
of Geology and Mine Planning, Goldcorp, who is a qualified person
under National Instrument 43-101 ("NI 43-101"). For further
information regarding El Morro, please see Goldcorp's annual
information form dated March 13, 2015
which is available at www.goldcorp.com as well at www.sedar.com
under Goldcorp's profile.
The Relincho scientific and technical information
disclosed in this news release has been reviewed and approved by
Rodrigo Marinho, P.Geo., Technical
Director, Reserve Evaluation, Teck who is a qualified person under
NI 43-101. For further information regarding Relincho, please see
Teck's annual information form dated March
2, 2015, which is available at www.teck.com as well at
www.sedar.com under Teck's profile
Cautionary Note Regarding Forward-Looking Statements
This news release contains "forward-looking
statements", within the meaning of the United States Private
Securities Litigation Reform Act of 1995 Section 21E of the United
States Securities Exchange Act of 1934, as amended, Section 27A of
the United States Securities Act of 1933, as amended and
"forward-looking information" within the meaning of applicable
Canadian securities legislation, concerning the business,
operations and financial performance and condition of Goldcorp and
Teck. Forward-looking statements, which are all statements
other than historical fact, include, but are not limited to,
statements with respect to the anticipated benefits of the Project
Corridor transaction the ("Transaction"), the ability of the
parties to satisfy the conditions of and to complete the
Transaction and the New Gold transaction ("New Gold Transaction"),
the development of Project Corridor as a mine, the future price of
gold, silver, copper, molybdenum, lead, zinc and other metals, the
estimation of mineral reserves and resources, including the
combined reserves of Goldcorp and Teck, the realization of
mineral reserve estimates, the timing and amount of estimated
future production, costs of future production, capital
expenditures, costs and timing of the development of new deposits,
success of exploration activities, permitting time lines, hedging
practices, currency exchange rate fluctuations, requirements for
additional capital, government regulation of mining operations,
environmental risks, unanticipated reclamation expenses, timing and
possible outcome of pending litigation, title disputes or claims
and limitations on insurance coverage. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as "plans", "expects", "is
expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates", "believes" or variations of such words
and phrases or statements that certain actions, events or results
"will", "may", "could", "would", "might" or "will be taken",
"occur" or "be achieved" or the negative connotation
thereof.
Forward-looking statements are made based upon
certain assumptions and other important factors that, if untrue,
could cause the actual results, performances or achievements of
Goldcorp or Teck, including in respect of the Transaction, the New
Gold Transaction and the development and operation of Project
Corridor, to be materially different from future results,
performances or achievements expressed or implied by such
statements. Such statements and information are based on
numerous assumptions regarding present and future business
strategies and the environment in which Goldcorp and Teck will
operate in the future, including the price of commodities,
anticipated costs and ability to achieve goals. In respect of the
forward-looking statements concerning the anticipated timing of
closing of the Transaction and the New Gold Transaction, Goldcorp
and Teck have provided them in reliance on certain assumptions that
they believe reasonable at this time, including assumptions as to
conditions to closing of the Transaction and the New Gold
Transaction being satisfied in a timely manner. Certain
important factors that could cause actual results, performances or
achievements to differ materially from those in the forward-looking
statements include, among others, the Transaction or the New Gold
Transaction not closing when planned, commodity price volatility,
discrepancies between actual and estimated production, mineral
reserves and resources and metallurgical recoveries, mining
operational and development risks, litigation risks, regulatory
restrictions (including environmental regulatory restrictions and
liability), activities by governmental authorities (including
changes in taxation), currency fluctuations, the speculative nature
of mineral exploration, the global economic climate, dilution,
share price volatility, competition, loss of key employees,
additional funding requirements and defective title to mineral
claims or property. Although Goldcorp and Teck have attempted
to identify important factors that could cause actual actions,
events or results to differ materially from those described in
forward-looking statements, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or
intended.
Forward-looking statements are subject to known
and unknown risks, uncertainties and other important factors that
may cause the actual results, level of activity, performance or
achievements of Goldcorp or Teck to be materially different from
those expressed or implied by such forward-looking statements,
including but not limited to: the risk that the Transaction or the
New Gold Transaction will not close when planned, risks related to
the uncertainty associated with preliminary economic assessments,
which do not purport to establish the legal or commercial viability
of mineral deposits; risks related to the integration of
acquisitions; risks related to international operations, including
economic and political instability in foreign jurisdictions in
which Goldcorp and Teck operate; risks related to current global
financial conditions; risks related to joint venture operations;
actual results of current exploration activities; environmental
risks; future prices of gold, silver, copper, molybdenum, lead,
zinc and other metals; possible variations in ore reserves, grade
or recovery rates; mine development and operating risks; accidents,
labour disputes and other risks of the mining industry; delays in
obtaining governmental approvals or financing or in the completion
of development or construction activities; risks related to
indebtedness and the service of such indebtedness, as well as those
factors discussed in the section entitled "Description of the
Business – Risk Factors" in Goldcorp's annual information form for
the year ended December 31, 2014
available at www.sedar.com and in the section entitled "Description
of the Business – Risk Factors" in Teck's annual information form
for the year ended December 31, 2014
available at www.sedar.com. Although Goldcorp and Teck have
attempted to identify important factors that could cause actual
results to differ materially from those contained in
forward-looking statements, there may be other factors that cause
results not to be as anticipated, estimated or intended.
There can be no assurance that such statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on
forward-looking statements. Forward-looking statements are
made as of the date hereof and accordingly are subject to change
after such date. Except as otherwise indicated by Goldcorp and
Teck, these statements do not reflect the potential impact of any
non-recurring or other special items or of any dispositions,
monetizations, mergers, acquisitions, other business combinations
or other transactions that may be announced or that may occur after
the date hereof. Forward-looking statements are provided for
the purpose of providing information about management's current
expectations and plans and allowing investors and others to get a
better understanding of our operating environment. Goldcorp and
Teck do not undertake to update any forward-looking statements that
are included or incorporated by reference in this document, except
in accordance with applicable securities laws.
Appendix A: Reserve and Resource
Disclosure
The following mineral reserve and resource information is as at
December 31, 2014. All mineral
resources disclosed below are reported exclusive of mineral
reserves.
El Morro — Reserves (100% basis) (1)(3)(5)
|
Grade
|
Contained
Metal
|
Category
|
Tonnes
(millions)
|
Gold (g/t)
|
Copper (%)
|
Gold (millions
of ounces)
|
Copper
(millions of
pounds)
|
Proven
|
321.81
|
0.56
|
0.55
|
5.82
|
3,876.59
|
Probable
|
277.24
|
0.35
|
0.43
|
3.10
|
2,626.36
|
Proven +
Probable
|
599.05
|
0.46
|
0.49
|
8.92
|
6,502.95
|
El Morro — Resources (100%
basis)(1)(2)(4)(5)
|
Grade
|
Contained
Metal
|
Category
|
Tonnes
(millions)
|
Gold (g/t)
|
Copper (%)
|
Gold (millions
of ounces)
|
Copper (millions
of pounds)
|
Measured
|
19.79
|
0.53
|
0.51
|
0.34
|
223.33
|
Indicated
|
72.56
|
0.38
|
0.39
|
0.88
|
630.00
|
Inferred
|
678.07
|
0.30
|
0.35
|
6.45
|
5,190.00
|
Notes:
|
|
|
|
(1)
|
All Mineral Reserves
and Mineral Resources have been estimated in accordance with the
CIM Definition Standards.
|
|
|
(2)
|
Mineral Resources
which are not Mineral Reserves do not have demonstrated economic
viability.
|
|
|
(3)
|
Goldcorp has
estimated El Morro mineral reserves assuming commodity prices of
US$1,300 per ounce of gold and US$3.00 per pound of
copper.
|
|
|
(4)
|
El Morro's mineral
resources are estimated using commodity prices of US$1,500 per
ounce of gold and US$3.50 per pound of copper.
|
|
|
(5)
|
The mineral reserves
and mineral resources are reported at a 0.2% Copper equivalent
cut-off grade, with 67.3% gold recovery and 86.6% copper
recovery.
|
Relincho — Reserves (1)(2)(3)
|
Grade
|
Contained
Metal
|
Category
|
Tonnes
(millions)
|
Copper (%)
|
Molybdenum
(%)
|
Copper
(millions of
pounds)
|
Molybdenum
(millions of pounds)
|
Proven
|
435.30
|
0.38
|
0.016
|
3,646.75
|
153.55
|
Probable
|
803.80
|
0.37
|
0.018
|
6,556.70
|
318.97
|
Proven +
Probable
|
1,239.10
|
0.37
|
0.017
|
10,106.65
|
464.36
|
Relincho — Resources (1)(2)(3)(4)(5)
|
Grade
|
Contained
Metal
|
Category
|
Tonnes
(millions)
|
Copper (%)
|
Molybdenum
(%)
|
Copper
(millions of
pounds)
|
Molybdenum
(millions of pounds)
|
Measured
|
79.90
|
0.27
|
0.009
|
475.60
|
15.85
|
Indicated
|
317.10
|
0.34
|
0.012
|
2,376.89
|
83.89
|
Inferred
|
610.80
|
0.38
|
0.013
|
5,117.02
|
175.06
|
Notes:
|
|
|
|
(1)
|
All Mineral Reserves
and Mineral Resources have been estimated in accordance with the
CIM Definition Standards.
|
|
|
(2)
|
Mineral Resources
which are not Mineral Reserves do not have demonstrated economic
viability.
|
|
|
(3)
|
Teck has estimated
Relincho mineral reserves and resources assuming commodity prices
of US$2.80 per pound of copper and US$13.70 per pound of
molybdenum.
|
|
|
(4)
|
Mineral resources are
reported separately from, and do not include that portion of the
mineral resources reported as reserves.
|
|
|
(5)
|
Mineral Resources are
contained within a conceptual ultimate pit shell defined with
Measured, Indicated and Inferred blocks using the same economic and
technical parameters as used for mineral reserves and are reported
considering a variable cut-off grade based on a marginal value of
US$5.59/t.
|
These tables use the terms "Measured",
"Indicated" and "Inferred" Resources. United States investors are advised that while
such terms are recognized and required by Canadian regulations, the
United States Securities and Exchange Commission does not recognize
them. "Inferred Mineral Resources" have a great amount of
uncertainty as to their existence, and as to their economic and
legal feasibility. A significant amount of exploration must be
complete in order to determine whether an Inferred Mineral Resource
may be upgraded to a higher category. Under Canadian rules,
estimates of Inferred Mineral Resources may not form the basis of
feasibility or other economic studies. United States investors are cautioned not to
assume that all or any part of Measured or Indicated Mineral
Resources will ever be converted into Mineral Reserves.
United States investors are also
cautioned not to assume that all or any part of an Inferred Mineral
Resource exists, or is economically or legally mineable.
The projected mine life of the combined project
from the PEA is based on mineral reserves only and does not include
other mineral resources. The projected mine life of the
combined project and other results of the PEA disclosed in this
news release have been reviewed and approved by Gil Lawson, P.Eng., Vice President of Geology
and Mine Planning, Goldcorp and Rodrigo
Marinho, P.Geo., Technical Director, Reserve Evaluation,
Teck, each of whom is a qualified person as defined under NI
43-101.
SOURCE Goldcorp Inc.