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Goldcorp CEO Chuck Jeannes

Tibor Kolley

Goldcorp Inc. has signed a deal to sell its Escobal silver deposit in Guatemala to a private company headed by former president and chief executive Kevin McArthur for $505-million (U.S.) in stock and cash.

Under the deal Goldcorp will receive a 40 per cent stake in Mr. McArthur's Tahoe Resources Inc. following its initial public offering and the balance in cash, totalling at least $230-million.

"This transaction enables our shareholders to realize full value for a grass roots Goldcorp discovery that has grown into a world-class silver deposit," Goldcorp president and chief executive Chuck Jeannes said in a statement.

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"With Kevin McArthur leading a highly talented and experienced team in developing Escobal, Goldcorp looks forward to participating in the future success of this project through its ownership interest in Tahoe."

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Goldcorp will be entitled to appoint three of Tahoe's directors and maintain its stake in the company as long as it remains above 20 per cent

The Escobal silver project is in southern Guatemala, approximately 120 kilometres east of Goldcorp's Marlin mine.

Goldcorp said the project includes high-grade silver deposits including an indicated resource of 130.1 million ounces, with a further 187.5 million ounces of inferred resource. In addition to silver, Escobal contains some gold as well as moderate grades of lead and zinc, the company said.

Mr. McArthur said called the deal the first step in building a leading silver company.

"Over the past five months we have brought together a team of seasoned mining professionals and a board of directors with extensive experience in Latin America, and in Guatemala in particular," he said.

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"This focused management team, together with the Escobal project, should enable Tahoe to deliver shareholder value."

Mr. McArthur, who headed Glamis Gold before it was acquired by Goldcorp, retired from the senior gold producer at the end of 2008.

The deal is expected to close June 8.

Goldcorp lost $52.7-million or seven cents per diluted share in its first quarter, weighed down by a $212.2-million charge related to foreign exchange. The loss compared with a profit of $291.2 million or 40 cents a year ago when the company recorded a $116.7-million gain on foreign exchange.

Revenue totalled $750.3-million, up from $624.8-million.

Goldcorp said excluding the foreign exchange charges its adjusted earnings in the quarter totalled $163.1-million or 22 cents per share, compared with $169.3-million or 23 cents in the first quarter of 2009.

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