(RTTNews) - Xstrata Copper, a business unit of Switzerland-based mining company Xstrata Plc (XTA.L: News ), Monday, said its Chilean subsidiary has signed a deal with gold mining company Barrick Gold Corporation (ABX: News ,ABX.TO: News ), by which Xstrata will sell its 70% interest in El Morro SCM and associated rights and assets to Toronto, Ontario-based Barrick for a total cash consideration of US$465 million. The deal is expected to close prior to January 30, 2010.

El Morro SCM is the holder of El Morro copper-gold project located in north-central Chile. In August 2006, as a part of Xstrata Group's acquisition of Canadian miner Falconbridge, Xstrata Copper acquired El Morro project. Xstrata Copper and New Gold subsidiary Datawaves Sciences Inc. are the partners in El Morro SCM.

Brisbane, Australia-based Xstrata Copper's chief executive Charlie Sartain said the transaction to divest the company's interests in El Morro project represents the successful outcome of a competitive process.

Sartain also said, "While we have demonstrated through the feasibility study that El Morro has strong prospects, our agreement with Barrick is a recognition that it will create more value as part of Barrick's portfolio than Xstrata Copper's."

"The sale of our interest in the El Morro project will enable us to better direct our resources towards our other priority development projects, five of which are progressing to the final decision stage over the coming months," added Sartain.
Through its Lomas Bayas copper mine, Altonorte Metallurgical Complex, 44% interest in Collahuasi joint venture and Energía Austral hydropower plant project, Xstrata Copper noted it will continue to have an active presence in Chile.

XTA is currently trading at 969.50 pence per share, up 1.73%, on the London Stock Exchange.

ABX closed Friday's regular trading at $39.48 per share on the New York Stock Exchange.

ABX closed Friday's regular trading at C$41.25 per share, down 0.96%, on the Toronto Stock Exchange.

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by RTT Staff Writer

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