Goldcorp sells silver asset to Tahoe Resources

Goldcorp Inc., the worldÔÇÖs second-largest producer of gold by market value, plans to sell its Guatemalan silver mine for $505 million to CanadaÔÇÖs Tahoe Resources Inc.  Goldcorp will receive at least $230 million in cash and a 40 percent stake in Vancouver-based Tahoe as part of the sale of its Escobal silver project, following TahoeÔÇÖs proposed initial public share sale. Tahoe, which is run by former Goldcorp CEO Kevin McArthur, is selling shares to raise the cash portion of the transaction and to fund continued development of the Escobal project. A recent discovery by Goldcorp, Escobal is located in southern Guatemala, about 120 kilometers east of Goldcorp's Marlin gold mine. The deposit holds high-grade silver deposits with indicated resources of 130.1 million ounces and inferred resources of 187.5 million ounces. In addition to silver, Escobal contains some gold as well as moderate grades of lead and zinc. Tahoe has said it plans to continue the ongoing exploration drilling program at Escobal and will conduct metallurgical and engineering studies to evaluate potential development scenarios for the project. In a statement, the company said: ÔÇ£Tahoe's principal objective is to develop Escobal into a profitable silver operation.ÔÇØ Commenting on the deal, Kevin McArthur, Tahoe's CEO, said: "We are very excited to take this first step in building a leading silver company. Escobal is a great asset with outstanding potential for resource expansion. ÔÇ£Over the past five months we have brought together a team of seasoned mining professionals and a board of directors with extensive experience in Latin America, and in Guatemala in particular.┬áThis focused management team, together with the Escobal Project, should enable Tahoe to deliver shareholder value.ÔÇØ Chuck Jeannes, GoldcorpÔÇÖs president and CEO, added: ÔÇ£This transaction enables our shareholders to realize full value for a grass roots Goldcorp discovery that has grown into a world-class silver deposit. ÔÇ£With Kevin McArthur leading a highly talented and experienced team in developing Escobal, Goldcorp looks forward to participating in the future success of this project through its ownership interest in Tahoe.ÔÇØ He continued: ÔÇ£GoldcorpÔÇÖs continued focus on simplifying and strengthening our gold portfolio through the sale of non-core assets has allowed us to fund our peer-leading suite of growth projects without dilution to our shareholders. The sale of Escobal is the latest example of that strategy.ÔÇØ The transaction is expected to be completed in early June. Goldcorp will be entitled to appoint three of Tahoe's directors and to maintain its stake in the company as long as it remains above 20 percent. Tahoe is a start-up company that intends to acquire, explore and develop precious metals resource properties in the Americas. In a statement, it said its overall strategy is to position itself as ÔÇ£a leading silver producer with high quality assets in the Americas with low silver production costs, significant silver resources, a strong growth profile and no precious metals hedging.ÔÇØ Goldcorp is also headquartered in Vancouver and employs more than 10,000 people worldwide.