Goldcorp sells San Dimas mine

Goldcorp Inc. has agreed to sell its San Dimas gold and silver mine in Mexico to Mala Noche Resources Corp. for $500 million, it has been announced.  San Dimas, which is located about 150 kilometers west of the city of Durango in the state of Durango, will turn Vancouver-based Mala Noche into a metals producer. The mine will have an average annual production of 107,000 ounces of gold over the next five years, from proven and probable reserves of 860,000 ounces of gold. In 2009, San Dimas produced 113,000 ounces of gold and 5.1 million ounces of silver. Under the terms of the agreement, Vancouver-based Goldcorp will receive total consideration of $500 million, consisting of $275 million in cash, $175 million of Mala Noche common shares and a $50 million promissory note payable over five years, which will bear interest at a rate of six percent per annum. GoldcorpÔÇÖs ownership interest in Mala Noche is expected to be approximately 30 percent. Commenting on the sale, Chuck Jeannes, GoldcorpÔÇÖs president and chief executive officer, said: ÔÇ£This transaction is consistent with GoldcorpÔÇÖs ongoing strategy of creating value for shareholders while concentrating our focus on the cornerstone assets that will drive our industry leading production growth and future cash flow. ÔÇ£Like the recently announced sale of the Escobal silver deposit, the capital derived from monetizing this asset will be re-deployed into funding our growth without diluting our shareholders.ÔÇØ He concluded: ÔÇ£San Dimas has been an important contributor to GoldcorpÔÇÖs success over the years, with new discoveries enhancing the long term production profile at this historic mine.┬á We look forward to participating in the future success of Mala Noche and San Dimas through our significant ownership interest in the company.ÔÇØ Goldcorp currently sells all of the silver produced at San Dimas to Silver Wheaton Corp. for approximately $4 per ounce. Mala Noche will now deliver to Silver Wheaton a per-annum amount equal to the first 3.5 million ounces of payable silver produced at San Dimas and 50 percent of any excess during the next four years. Silver Wheaton will also receive an additional 1.5 million ounces of silver per annum to be delivered by Goldcorp for approximately $4.00 per ounce over the same timeframe. Beginning in the fifth year after closing, Mala Noche will deliver to Silver Wheaton a per-annum amount equal to the first six million ounces of payable silver produced at San Dimas and 50 percent of any excess. Goldcorp is North AmericaÔÇÖs fastest growing senior gold producer. Its assets include the Red Lake, Porcupine and Musselwhite gold mines in Canada; the Pe├▒asquito, Los Filos and El Sauzal gold/silver mines in Mexico; the Marlin mine in Guatemala; a 67 percent interest in the Marigold and Wharf mines in the US; and 37.5 percent of the Alumbrera mine in Argentina. The company predicts a 57 percent increase in its gold production over┬áthe next five years. In 2009, GoldcorpÔÇÖs revenue was $2.7 billion, with net earnings of $240 million, during which time it produced 2.4 billion ounces of gold and sold 2.3 billion ounces.