Barrick Gold Corporation the world’s largest producer of the metal can’t block Goldcorp Inc.’s 2010 acquisition of a majority stake in the El Morro copper and gold project in Chile.
Ontario Court Justice Herman Wilton-Siegel dismissed Barrick’s claims that the purchase was unlawful and ineffective, Goldcorp said in a statement. Barrick is reviewing the ruling and may consider an appeal, the Toronto-based company said in a release.
“We are pleased that the court has confirmed our position that our acquisition of El Morro was completely proper and consistent with the relevant agreements and Chilean law and that Goldcorp’s 70% ownership share of the project has now been clarified for our shareholders,” Goldcorp Chief Executive Officer Chuck Jeannes said in the statement.
Barrick started the action against Vancouver-based Goldcorp in 2010 to overturn the company’s purchase of 70% of El Morro.
Goldcorp advanced New Gold Inc 463 million dollars so that it could exercise a right of first refusal to buy the 70% stake from Xstrata Plc. Goldcorp then paid another 50 million to acquire the shareholding from New Gold, which already owned 30% of El Morro. Xstrata and New Gold were also named in the complaint.
Barrick, which had an earlier agreement to buy the 70% stake from Xstrata, argued that the El Morro shareholders’ agreement prohibited the transfer of rights to a third party, which it said made the Goldcorp deal illegal.
El Morro, in north-central Chile has reserves of 8.4 million ounces of gold and 6.1 billion pounds of copper, Goldcorp said Jan. 9. Reserves are mineral resources that studies have shown can be viably mined. The mine may cost 3.9 billion dollars with the start up of production expected in 2017, the company said.
Goldcorp stopped work at El Morro after Chile’s Supreme Court suspended approval of an environmental permit, it said April 30. The Chilean court said April 27 that the permit would be suspended until “deficiencies” identified by an Antofagasta appeal court decision in February had been corrected.
Goldcorp, the second-largest gold producer by market capitalization, is working with Chilean authorities and local communities to correct those deficiencies, it said in its statement in Toronto.