Goldcorp completes Mezcala/Bermejal purchase

Friday, April 1, 2005

Mexico's mining-metals group Industrias Peñoles has reported the completion of the sale of the Mezcala gold project, a JV with US miner Newmont (NYSE: NEM), to Canada's Goldcorp (TSX: G, NYSE: GG) for US$70mn in cash.

Peñoles and Newmont held a 56% and 44% stake respectively in Mezcala, also known as Bermejal after Minera El Bermejal, the JV Peñoles-Newmont subsidiary that held it.

Peñoles said it decided to sell Mezcala, which has indicated resources of 2.37Moz of gold, as the future growth of the project was limited by the fact that Goldcorp owns the surrounding Los Filos and Nukay gold projects.

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In a separate statement, Goldcorp said the acquisition increased the company current measured and indicated mineral resources in the Guerrero gold belt to nearly 6Moz gold.

The company, in the process of completing a takeover of Canada's Wheaton River Minerals that holds the Mexican properties, said the combined Los Filos-Bermejal operation should result in Los Filos becoming the largest gold operation in Mexico, with average annual production of 300,000oz/y.

Goldcorp is expected to complete a feasibility study at Los Filos, 2km from Bermejal, in April. Production is earmarked to start in the third quarter next year after the company completes a subsequent study on a joint operation.

Peñoles is the world's largest producer of refined silver, metal bismuth and sodium sulfate. Newmont is the world's largest gold miner.