Newstrike Buys Goldcorp’s Stake In Morelos For $52M In Cash And Shares

An advanced-stage gold project in Mexico will soon be in the hands of two Canadian juniors.

Goldcorp (G-T, GG-N) has agreed to sell its 21.2% stake in the Morelos gold project in Guerrero state, Mexico, to Newstrike Capital (NES. H-V) for about $52 million in cash and shares.

Newstrike will pay Goldcorp $44.5 million in cash plus 15 million shares for the project, which consists of about 290 sq. km. Newstrike already holds 810 sq. km of exploration ground in the Guerrero gold belt.

In November, Gleichen Resources (GRL-V), the new operator at Morelos, bought its 78.8% interest in the project from Teck Resources(TCK. B-T, TCK-N) for US$150 million and a 4.9% stake in Gleichen.

The project has measured and indicated resources of 28 million tonnes grading 3.2 grams gold per tonne for 2.97 million oz. gold, plus another 900,000 inferred oz. at the same grade.

Gleichen plans to complete a feasibility study by early 2011, at which time it will make a production decision.

Morelos is located about 200 km southwest of Mexico City. Exploration dates back to 1998 in the general project area, and mineralization at the main deposits, El Limon and Los Guajes and Guajes West was discovered in 2000, 2001 and 2002, respectively.

Both open-pit and a combination of underground and open-pit methods have been considered, with ore processed through a conventional gold cyanidation plant.

On Dec. 2, when the Newstrike- Goldcorp deal was announced, Newstrike shares were down 4¢ to 43¢ apiece on a trading volume of 657,000 shares. The company has 62 million shares outstanding and a market cap of $26.7 million.

Gleichen shares were unchanged at $1.24 apiece on a trading volume of 404,000 shares. Gleichen has 29.8 million shares outstanding and a market cap of $36.9 million.