Leading gold producer Barrick Gold Corporation announced recently that they have agreed to purchase a majority stake in Xstrata PLC, a copper and gold project based in Chile. The company has agreed to pay a sum of $465 million for the stake.

Based on the agreement, Barrick will purchase 70% of the El Morro project for the aforementioned amount. The El Morro project is located near the boundary between Argentina and Chile. The deal is scheduled to be completed by January next year. The deal also involves an 800 square kilometer area where a resource feasibility study will be conducted.

According to estimates from Zug researchers, El Morro has about 6.3 billion pounds of copper resources and 8.3 million ounces of gold resources. The Pascua-Lama mine will start production in the year 2013 and Barrick estimates that the mine should yield 35 million ounces of silver and around 750,000 to 800,000 ounces of gold in the first five years of production.

The remaining 30% of El Morro is owned by New Gold. New Gold the right of first refusal to purchase the Xstrata stake and they have until January 11, 2009 to exercise that right. When the right of first refusal expires or is waived, Barrick will have to opportunity to complete the purchase.

About: Barrick Gold Corporation: Barrick Gold Corporation is a company specializing in the development, exploration, production and selling of gold to customers around the world. The company began operations in the year 1963 and is headquartered in Toronto, Canada.