Barrick buys El Morro for $465 million

The copper division of mining giant Xstrata has agreed to sell its 70 percent interest in El Morro SCM, the holder of Chilean copper-gold project El Morro, to Canadian mining firm Barrick Gold Corp.┬á  El Morro has been sold for $465 million.  Zug, Switzerland-based Xstrata has said it is seeking to better direct its resources towards other development projects, five of which will reach final decision stage within the next few months.  It will, however, continue to have an active presence in Chile through its Lomas Bayas copper mine, its 44 percent stake in the Collahuasi joint venture copper mine, the Altonorte metallurgical complex in northern Chile and the Energia Austral hydropower plant project in the south of the country.  The El Morro deal is expected to close by the end of January next year.  Xstrata Copper CEO Charlie Sartain said of the sale: ÔÇ£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 BarrickÔÇÖs portfolio than Xstrata CopperÔÇÖs.  ÔÇ£This is in view of the potential synergies with BarrickÔÇÖs existing interests in the region and Xstrata CopperÔÇÖs significant pipeline of organic growth projects in a number of countries, including the north of Chile,ÔÇØ he continued.┬á  "Xstrata Copper continues to have a world class pipeline of copper greenfield and brownfield expansion projects providing us with significant optionality for future growth.ÔÇØ  Xstrata acquired El Morro, which is situated in northern-central Chile, in 2006, when it bought Toronto, Canada-based mining company Falconbridge, which then became Xstrata Nickel.  The mine, which is currently awaiting the outcome of environmental and social impact assessments by Chilean authorities, is located 4,000 metres above sea level.  Toronto-based Barrick is the worldÔÇÖs biggest producer of gold and employs around 20,000 people worldwide. It has four other regional business units in Australia, Africa, North America and South America.  It has been reported this week that Xstrata is likely to walk away from its hostile merger approach for UK-based mining rival Anglo American, after takeover authorities set a deadline for the company to submit a final bid or walk away.  * ┬á┬á┬á┬á┬á┬á┬á*┬á┬á┬á┬á┬á┬á *┬á