Just when it seemed that gold could not get any shinier in the eyes of investors big and small, prices for the shiny yellow metal continued its upward journey to even higher heights, past $1,130 U.S. an ounce. The competition for at least a piece of this very lucrative gold pie took a decidedly different turn in the middle week of November, with the announcement that Vancouver-based Canplats Resources Inc. (TSX-Venture:
CPQ) was taken over by mining giant Goldcorp Inc. (TSX:
G), the latter company harboring ambitions to enhance its presence in the Mexican gold field. It appears the adage, "if you can't beat ‘em, join ‘em", prevailed in this case.
Goldcorp is trying to establish a network of satellite mines around its Penasquito gold project in Mexico. To that end, G bought up shares in CPQ for about $238 million, planning ultimately to acquire all the outstanding shares of Canplats and then spin off all of Canplats' assets, other than its Camino Rojo project, into a new gold-exploration company. Each Canplats share would be exchanged for 0.074 of a common share of Goldcorp and an interest in a new exploration company notionally valued at 18 Canadian cents a share.
Camino Rojo is located about 50 kilometers southeast of Penasquito, which is expected to reach commercial production next year. Analysts had speculated that Canplats was likely to be an acquisition target for Goldcorp, or another big gold miner, given the promising results from Camino Rojo.
Leading up to the announcement on November 16, Canplats had drilled more than 38,000 metres at Camino Rojo, outlining 3.44 million ounces gold and 60.7 million ounces silver in measured and indicated resources with additional inferred resources of 0.55 million ounces gold and 7.6 million ounces silver at the Represa deposit, which remains open along strike and to depth.
What made CPQ particularly attractive – besides its proximity to some of Goldcorp's prize strikes – is its rich variety of projects elsewhere in Mexico. The 100%-interest El Rincon gold prospect is located in Durango, approximately 120 kilometres north of Durango City, on the same northeast-trending corridor that hosts Morgain Minerals Inc.'s El Cairo gold project. Nearby is the Rodeo project, in the central Mexican silver belt that has produced more than 5.8 million ounces of gold and 3.3 billion ounces of silver. Also near Durango is the Yerbabuena prospect, comprised of four mineral claims totaling 10,930.63 hectares. The Maijoma and El Alamo prospects are located in rich areas near Chihuahua, not far from CPQ's Mecatona project.
Canplats shares rose 37% to $3.51 in trading on the TSX Venture Exchange, smashing its previous 52-week high of $2.65 established in September, and far above its gulch for the year of $1.03 early in December 2008. Shares of Goldcorp were up 0.9% at $46.65 on the Toronto Stock Exchange.
Disclosure:
The author has not been compensated nor does he have a position in the above mentioned Companies.
