Goldcorp Inc agreed to sell its Los Filos mine in Mexico to Leagold Mining Corp in a deal valued at US$438 million on Thursday, as the world's No. 3 gold miner by market value focuses more squarely on core assets.
Goldcorp, which put Los Filos on the block last year under a push to prioritize its biggest and best mines, said the transaction will help it grow net asset value per share and is expected to close in the first quarter of 2017.
Under the transaction, Vancouver-based Goldcorp will get US$279 million in cash, US$71 million in Leagold shares and tax receivables worth about US$88 million.
Shares of Goldcorp, which separately announced the US$18 million cash sale of its Cerro Blanco project in Guatemala to Bluestone Resources on Wednesday, nudged about 1 percent higher on Toronto and New York exchanges at mid-session Thursday.
RBC Capital Markets analyst Stephen Walker said the sale price broadly matched his net asset value estimate of US$462 million in a note to clients.
Los Filos has just a little over two years of reserves left, but Leagold appears to be interested in its underground mining potential, said Desjardins Securities analyst Michael Parkin.
Leagold said its executives, who developed Endeavour Mining into a west African bullion producer, want to replicate that buy and build strategy in Latin America.
Leagold Chief Executive Officer Neil Woodyer was Endeavour's founder and company chairman, Frank Giustra, is an established Canadian mining financier. They hold about 20.4 percent and 9.2 percent of Leagold shares respectively.
Last February, Goldcorp cut Los Filos' gold reserves by 78 percent, or 5.3 million ounces, because production had become unprofitable at lower gold prices.
It operated Los Filos with a smaller pit, lower stripping costs and shorter mine life plan in 2016 and, in the third quarter, began shifting mining from open pits to underground operations.
As of June 30, 2016, Los Filos had 1.43 million ounces of gold and 7.8 million ounces of silver in proven and probable reserves.
Goldcorp hired the Bank of Nova Scotia to sell Los Filos and its Camino Rojo gold and silver project in Mexico.
The company is also considering options for its 100 percent-owned Marlin mine in Guatemala and 37.5 percent stake in Argentina's Alumbrera mine, Chief Executive David Garofalo told Reuters in July.
Goldcorp granted Bluestone the right of first refusal for certain Marlin assets and equipment on Wednesday.
