New Gold Completes Purchase of El Morro

The El Morro project lies in the centre of a huge legal dispute, but New Gold Inc. went ahead and bought it anyway.

Yesterday, the Vancouverbased miner said it closed a transaction to buy 70% of El Morro, a copper-gold deposit in Chile, from Xstrata PLC for US$463-million. It then transferred that stake to Goldcorp Inc., which plans to team up with New Gold to develop the project.

New Gold and Xstrata went ahead and closed the transaction despite a lawsuit from Barrick Gold Corp., which claims it is the rightful owner of the 70% stake in El Morro and has no plans to give up the fight for it.

Barrick struck a deal to buy the stake from Xstrata last fall, but New Gold took it away by exercising its right of first refusal to purchase the interest. However, Barrick claims that New Gold violated Chilean law by immediately transferring it over to Goldcorp.

In its statement of claim, Barrick said it was seeking an injunction preventing New Gold and Goldcorp from buying the Xstrata interest. However, Xstrata still decided to go ahead and sell it, even with the lawsuit hanging over the transaction.

Randall Oliphant, executive chairman of New Gold, said he is confident that Barrick’s suit will be dismissed. “Our view has been absolutely consistent, that we have a right of first refusal and we’re going to work towards completing our transaction,” he said.

As part of the deal with Goldcorp, New Gold received US$50-million in cash, and Goldcorp agreed to pay for all of the development costs at El Morro.
Description: New Gold Completes Purchase of El Morro Rating: 5 Reviewer: Admin ItemReviewed: New Gold Completes Purchase of El Morro

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Thursday, April 22, 2010

Canada Stocks Fluctuate as Gold Mining Companies Slips, Energy Producer Rise

Canadian stocks swung between gains and losses as energy producers rose and gold mining companies fell as the precious metal back from the four-week high.

Canadian Natural Resources Ltd., Canada's second largest energy company by market value, advanced 0.8 percent after analyst Brian C. Dutton of Credit Suisse Group AG raised his rating on the stock to "exceed" from "neutral." Barrick Gold Corp., the world's largest gold producer, lost 1.4 percent as bullion falls below $ 1120 per ounce. Copper mining company First Quantum Minerals Ltd. rose 2 percent as producers of metals used in industry rose.

Standard & Poor's / TSX Composite Index slipped 9.17 points, or 0.1 percent, to 11,700.12 at 9:51 am in Toronto for what will be the first loss in nine sessions.

S & P / TSX gain 5.3 percent in the eight days through February 19 as a stronger-than-expected corporate earnings in North America over concerns over rising U.S. dollar impact on commodity prices. Since the time of reporting earnings season began on January 11, 63 percent of the S & P / TSX and 78 percent of the S & P 500 companies that have reported have exceeded analysts' estimates.
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Equinox Reaches Settlement with ZESCO

Equinox Minerals Limited and ZESCO Limited, the Zambian power authority, are pleased to announce that on March 17, 2010, a settlement agreement (the “Settlement Agreement”) was executed in relation to electrical power supply charges incurred during the construction phase of the Lumwana Copper Mine in Zambia.

The terms of the US$4 million Settlement Agreement affords Equinox full and final satisfaction and release from all claims and causes relating to the dispute that involved ZESCO electrical power off-take supplied to the Lumwana Copper Mine up to and including December, 2009.

The Settlement Agreement re-affirms the integrity and continuity of Equinox’s long term Lumwana Power Supply Agreement as announced by Equinox on February 16, 2006.

In a joint statement made subsequent to signing the Settlement Agreement, Mr Craig Williams (Equinox President and Chief Executive Officer) and Mr Ernest Mupwaya (ZESCO Acting Managing Director) commented, “We are very pleased that the dispute has been resolved in an amicable manner and we reiterate that this Settlement Agreement underscores our strong commitment to develop and grow a long term relationship and partnership.”

Lumwana is the first ‘greenfields’ copper investment in Zambia in a generation and has brought significant infrastructure development and employment to what was an economically depressed area of Zambia. Electrical supply to Lumwana represents a key extension of the interconnected power grid in Zambia, and apart from providing bulk power supply to the Lumwana mining operations, interconnected power has also been made available for the first time to the Lumwana region through domestic reticulation to residential housing in a town development constructed by the Company as part of its development agreements and construction commitments to the nation.

The line also makes it possible for ZESCO to connect the rest of the North western Province to the national grid.

Chemistry, Copper Mining, Equinox Minerals Limited, Lumwana Copper Mine, Zambia, ZAMBIA ELECTRICITY SUPPLY CORP, ZESCO Limited
Description: Equinox Reaches Settlement with ZESCO Rating: 5 Reviewer: Admin ItemReviewed: Equinox Reaches Settlement with ZESCO

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Saturday, April 10, 2010