Xstrata sells Chilean copper-gold project stake to Barrick Gold for $465 million

Swiss mining group Xstrata's Chilean subsidiary is selling its 70-per cent stake in the El Morro copper-gold project to Canadian miner Barrick Gold Corporation for $465 million in cash.

Switzerland-based Xstrata said in a statement yesterday that it is selling its 70 per cent stake in its Chilean subsidiary El Morro SCM and associated rights and assets to Toronto-based Barrick for $465 million.

Xstrata is rumoured to be also planning to sell its Colombian coal operation, Cerrejón back to Glencore International for $2 billion, which it had acquired in March 2006 for $1.7 billion from Glencore, which holds a 36.02 per cent in Xstrata.

The remaining 30 per cent of the El Morro copper-gold project, which is owned by a subsidiary of New Gold Inc., holds the right of first refusal to acquire Xstrata's 70-per cent interest in El Morro and has unti11 January 2010, to do so.

El Morro, located in Northern Chile has 489 million metric tons of measured and indicated ore resources containing 0.59 per cent copper.

"The sale of our stake in the El Morro project will enable us to better direct resources toward other priority projects, of which five will be entering their final phase in the coming months," said Charlie Sartain director of Xstrata Copper, a subsidiary of Xstrata, which carried out the transaction.