Barrick Gold Drags Xstrata Into Legal Battle
NEW YORK (
) --
Barrick Gold
(ABX)
is seeking to add Swiss miner
Xstrata
as a defendant in a law suit against
New Gold
(NGD) - Get Report
and
GoldCorp.
(GG)
, as the feud over a prized gold-copper project in Chile intensifies,
Bloomberg
reports.
Back in October,
struck an agreement with Xstrata to buy a 70% stake in the latter's prized El Morro
pictured above project in Chile for $465 million.
But then, to Barrick's dismay, El Morro minority stakeholder New Gold exercised its right of first refusal and agreed to sell that stake to Goldcorp, disheveling Barrick's plans. Even though Goldcorp says that it entered its agreement with New Gold "in good faith and is confident that it has acted lawfully," Barrick questioned the legality of the transaction and sued both parties on Jan. 13 in an effort to prevent New Gold from selling the El Morro stake to Goldcorp.
In January, Goldcorp said it would advance $463 million to New Gold to fund the exercise of the right of first refusal by a New Gold subsidiary, and that following the acquisition of the 70% interest by the New Gold subsidiary, Goldcorp would acquire that subsidiary from New Gold; Goldcorp said it would pay New Gold $50 million in cash upon closing of the subsidiary acquisition.
Barrick Gold is now approaching a judge in Ontario for the go-ahead to include Xstrata as a defendant in the lawsuit, maintaining that Xstrata reneged on an agreement to sell the stake to Barrick, and that Xstrata "interfered unlawfully with Barrick's economic interests" and "conspired to injure Barrick," according to
Bloomberg
.
Situated in north-central Chile, El Morro contains proven and probable reserves of 6.7 million ounces of gold and 5.7 billion pounds of copper, with an additional 2.2 million ounces of gold and 1 billion pounds of copper in the measured and indicated resource categories, according to Goldcorp's website.
-- Reported by Andrea Tse in New York
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