NEW YORK (The Deal) -- Canada's Silver Standard Resources (SSRI) said Tuesday it has agreed on a $275 million acquisition of the Marigold mine in Nevada from owners Goldcorp (GG) and Barrick Gold (ABX), taking advantage of depressed asset prices to expand its exposure to gold.
Goldcorp and Barrick, which own about two-thirds and one-third of the project respectively, invited bids late last year for the open-cut mine, which is expected to produce as much as 150,000 ounces of gold this year and has proven and probable reserves of 4.92 million ounces.
"The acquisition of Marigold accomplishes our strategic goal of adding an operating mine in a well-established, low-risk mining jurisdiction," Silver Standard president and CEO John Smith said in a statement.
A 25% fall in gold prices over 2013 led to sharp falls in the value of gold assets over the past year and a pause in dealmaking that appears to be coming to an end as companies put cash to work to boost reserves. Vancouver-based Goldcorp earlier this month made a hostile C$2.6 billion ($2.3 billion) bid for domestic rival Osisko Mining Corp., while Barrick Gold has taken advantage of the renewed activity to sell three small projects, excluding Marigold, in the past two months, raising $100 million.
Barrick, of Toronto, the world's largest gold producer, and Goldcorp, of Vancouver, which ranks about No. 5, said that the sale was part of their "ongoing" portfolio management. Large gold producers regularly sell mature mines, reallocating capital to new projects with higher yields to avoid the micromanagement needed to extend mine lives and improve efficiency.