TORONTO - Two of Canada's biggest gold companies are creating a new joint venture to advance several mining projects clustered in northern Chile.

The joint venture will be owned equally by Toronto-based Barrick Gold Corp. (TSX:ABX) and Vancouver-based Goldcorp. (TSX:G), which is making several acquisitions as part of the plan.

The two gold giants say they plan to find ways to reduce the cost of developing the Cerro Casale project, which has been majority-owned by Barrick with Kinross Gold Corp. (TSX:K) holding a smaller stake.

Under the deal, Goldcorp will buy Kinross's 25 per cent stake in Cerro Casale and other assets in deal that includes US$260 million cash.

It has also agreed to pay the first US$260 million of Barrick's costs towards developing Cerro Casale as part of an agreement for an additional 25 per cent stake.

Goldcorp will also contribute the nearby Caspiche project, which it will acquire by purchasing Exeter Resource Corp. (TSX:XRC) in a separate transaction valued at C$247 million. Half of the acquisition price of Caspiche will be credited toward the US$260 million in Barrick's costs that Goldcorp has agreed to pay.

"We are pleased to welcome Goldcorp as our new joint venture partner at Cerro Casale, and look forward to the fresh perspective they can bring to the project, in addition to the potential for synergies in the district," Barrick president Kelvin Dushnisky said in the announcement.

Cerro Casale has an estimated 23 million ounces of gold reserves and 5.8 billion pounds of copper, but Barrick has yet to begin construction. It has cited unfavourable economics for several years but said in a March 23 regulatory filing that it would look for alternative ways to develop the project.

"The joint venture with Barrick has the potential to allow us to consolidate infrastructure to reduce capital and operating costs, reduce the environmental footprint and provide increased returns compared to two standalone projects," David Garofalo, Goldcorp's president and chief executive, said Tuesday.

Goldcorp shares closed down C$1.48 or nearly seven per cent at $19.98. Barrick shares lost 65 cents or about 2.5 per cent at C$25.55. Kinross shares fell 12 cents or about 2.6 per cent at $4.53 per share.

Shares of Exeter closed up 87 cents or 56 per cent at $2.41 on the Toronto Stock Exchange.