Xstrata Copper announces that its subsidiary Xstrata Copper Chile SA has entered into a formal sale agreement with Barrick Gold Corporation for Xstrata's 70% interest in El Morro SCM, the holder of the El Morro copper-gold project, and associated rights and assets, for a total cash consideration of US$465 million. The transaction remains subject to several conditions before completion and is expected to close prior to 30 January 2010.
Xstrata Copper Chief Executive Charlie Sartain said "The agreement to divest our interests in the El Morro project represents the successful outcome of a competitive process. While we have demonstrated through the feasibility study that El Morro has strong prospects, our agreement with Barrick is a recognition that it will create more value as part of Barrick's portfolio than Xstrata Copper'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.
"Xstrata Copper continues to have a world class pipeline of copper greenfield and brownfield expansion projects providing us with significant optionality for future growth. The sale of our interest in the El Morro project will enable us to better direct our resources towards our other priority development projects, five of which are progressing to the final decision stage over the coming months," said Sartain.
Xstrata Copper will continue to have an active presence in Chile through its Lomas Bayas copper mine, Altonorte Metallurgical Complex, 44% interest in the Collahuasi joint venture and the Energía Austral hydropower plant project.
