Barrick and Xstrata had announced on October 10, 2009, an agreement whereby Barrick, subject to New Gold’s right of first refusal, would purchase Xstrata’s 70% share of El Morro for $465 million (E&MJ, November 2009, p. 16). New Gold’s right of first refusal was scheduled to expire on January 11, 2010.

Barrick’s court claim charges that the New Gold-Goldcorp agreement is illegal, is in breach of the El Morro shareholders agreement, and is unlawful and improper as a matter of Chilean law.

In separate statements issued on January 13, 2010, New Gold and Barrick acknowledged receipt of the Statement of Claim filed by Barrick in the Ontario court. New Gold stated that it was unaware of any fact or circumstance that would support Barrick’s allegations, that it believes that the claim is completely without merit, and that it intends to defend the action using all available legal avenues. Goldcorp said that it had acted in good faith and was confident that it acted lawfully and appropriately in all aspects of the transaction and that it intends to vigorously defend itself against Barrick’s claim.

El Morro is an advanced gold-copper exploration project, with measured and indicated mineral resources totaling 489 million mt, grading 0.59% copper and 0.52 g/mt gold, using a 0.3% copper cutoff grade. Contained gold totals about 8.3 million oz, and contained copper totals about 6.3 billion lb. El Morro is located 70 km north of Barrick’s 100%-owned Pascua- Lama project, which is entering construction, and 110 km south of Barrick’s 50%- owned Cerro Casale project. The El Morro project includes about 800 km2 of exploration ground that would extend Barrick’s land position immediately to the north of its 2,600-km2 exploration area that surrounds the Pascua-Lama project.