Toronto Stock Exchange: G Toronto Stock Exchange: GEA
New York Stock Exchange: GG
VANCOUVER, July 31 /CNW/ - Goldcorp Inc. ("Goldcorp") (NYSE:GG, TSX:G)
and Gold Eagle Mines Ltd. ("Gold Eagle") (TSX:GEA) today announced an
agreement whereby Goldcorp will acquire, through a friendly plan of
arrangement, all outstanding shares of Gold Eagle.
Gold Eagle's principal asset is the world class Bruce Channel gold
discovery which is situated along the prolific Red Lake Trend, adjacent to
Goldcorp's Red Lake gold mine and immediately southwest of Goldcorp's
past-producing Cochenour-Willans Mine. This transaction will enable Goldcorp
to capitalize on its extensive exploration and operations expertise in the Red
Lake district and its considerable human resources and related infrastructure.
"This transaction secures for Goldcorp full control of 8 kilometres of
strike length in the heart of the world's richest high grade gold district,"
said Kevin McArthur, Goldcorp's President and Chief Executive Officer. "Nearly
200 drill holes have defined an impressive gold deposit at Bruce Channel, with
potential for additional expansion over time. Development of this
strategically important zone can now move forward with our adjoining assets as
a single, comprehensive project, sharing mine infrastructure, ore processing
facilities and human talent with Red Lake, thus minimizing capital and
operating costs and maximizing long-term shareholder value. Red Lake mine has
operated for over 50 years, and Goldcorp's continued district consolidation
efforts are designed to sustain this world-class operation for decades into
the future. We are the natural partner to develop the Bruce Channel project
with the geographic footprint preferred by our community."
Under the plan of arrangement, each common share of Gold Eagle not owned
by Goldcorp will be exchanged for (i) a cash payment in the amount of C$6.80
and (ii) 0.146 common shares of Goldcorp, assuming full pro-ration. Gold Eagle
shareholders will have the option to elect to receive cash (on the basis of
$13.60 per Gold Eagle share), shares (on the basis of 0.292 Goldcorp shares
and $0.0001 per Gold Eagle share) or any combination of cash and shares,
subject to pro-ration, with an aggregate maximum cash consideration of $691
million and an aggregate maximum of 14.8 million common shares of Goldcorp
subject to increase on a prorated basis if Gold Eagle warrants and options are
exercised prior to the effective date of the arrangement. The total
consideration for 100% of the fully diluted shares of Gold Eagle would be
approximately $1.5 billion.
Based on the July 30, 2008 closing price and 20-day volume weighted
average price for Goldcorp's common shares on the TSX, and assuming full
pro-ration, the transaction values each Gold Eagle share at C$12.62 and
C$13.39, respectively.
