TORONTO (miningweekly.com) – Gold miner Goldcorp and joint venture (JV) partner Barrick Gold have sold the Marigold mine, in Humboldt county, Nevada, to Silver Standard Resources for $275-million in cash, subject to certain closing adjustments.
Silver Standard, which has a collection of exploration and development properties throughout the Americas, said that the transaction accomplished its strategic goal of adding an operating mine to its portfolio.
Marigold is a JV operation between Goldcorp, which is the operator and 66.7% partner, and Barrick which is a 33.3% partner.
The transaction was result of a joint sale process whereby Goldcorp and Barrick invited multiple parties to conduct due diligence and put forth offers to purchase Marigold.
"Marigold has been an important contributor to the growth of Goldcorp and we are pleased that a company with the capabilities of Silver Standard will be taking on this operation. We will work closely with them to ensure a smooth transition," Goldcorp president and CEO Chuck Jeannes said on Tuesday.
The agreement is subject to certain closing conditions and was expected to close in April 2014.
The Vancouver-based Silver Standard’s immediate focus would be on ensuring a smooth transition in ownership upon closing of the transaction. It said it was working to implement and analyse projects to enhance the current operation and lower the cost structure, such as completing the integration of the new larger-scale and more efficient mining equipment; and to develop a new life-of-mine plan targeting a lower strip ratio and higher grade, with the potential to reduce mining costs.
A National Instrument (NI) 43-101-compliant technical report was also expected in the third quarter. A second NI 43-101-compliant technical report was expected in the fourth quarter, with an optimised mine plan for the current gold price environment.
Marigold is an openpit gold mine situated at the northern end of the Battle Mountain-Eureka trend. The mine had been in continuous production since 1988.
Ore is mined by conventional truck-and-shovel equipment and processed through a large 40 000 t/d run-of-mine heap leach operation.
Goldcorp last month reported that the mine produced 162 000 oz of gold in 2013 and it is expected to produce between 142 000 oz and 150 000 oz of gold in 2014.
Marigold had consistently produced over 140 000 oz/y of gold at gold recoveries of more than 70%. Production at Marigold is subject to various net smelter returns royalties.
In 2012 and 2013, significant investments were made to buy new, larger mining equipment, which was expected to improve the efficiency of future mining operations.
The mine currently employs 360 people.
Marigold currently has 294.5-million tonnes grading 0.52 g/t, for about 4.92-million ounces of gold in the compliant proven and probable reserves categories. The combined measured and indicated resource totals 45.5-million tonnes grading 0.42 g/t, for about 1.12-million ounces of gold.