Goldcorp Inc. (TSE:G, Mkt cap 20.35B, P/E – , Div/yield 0.03/0.45, EPS -6.19, Shares 832.22M) is set to make its biggest acquisition in five years after agreeing to buy Canadian explorer Kaminak Gold Corp. in a $520-million share swap.
With gold prices surging 20 cent this year and Goldcorp announcing its first profit in three quarters, the move appears well timed, the Globe and Mail reports.
It’s understood that Goldcorp’s CEO, David Garofalo, has identified Kaminak’s Coffee project in the Canadian Arctic as a potential new source of output to help close the gap with more valuable rivals Barrick Gold Corp. and Newmont Mining Corp.
The world’s third-most valuable bullion producer is heading for its best year in the stock market since 2009, which helps explain why it has swooped to buy Kaminak. Pending approval, it will represent Goldcorp’s biggest buy since Andean Resources Ltd., which was completed in 2011 when gold soared above $1,900 an ounce.
“This acquisition is consistent with our strategy of partnering with junior exploration companies to identify and develop mining districts with significant exploration potential that is expected to grow our net asset value per share,” Garofalo said in a statement.
Each Kaminak share will be exchanged for 0.10896 Goldcorp shares in an arrangement that values Kaminak stock at $2.62, or 40 per cent more than the 20-day average. About 21.6 million Goldcorp shares will be issued for the deal.
Gold miners have announced $1.22 billion-worth of mergers and acquisitions so far this quarter, pushing it beyond the $1.12-billion in deals last quarter, although still less than half the levels of 12 months ago, according to data compiled by Bloomberg.
Goldcorp Inc. is a Vancouver based gold producer engaged in the operation, exploration, development and acquisition of precious metal properties in Canada, the United States, Mexico, and Central and South America. The Company is engaged in the sale of gold, silver, lead, zinc and copper. The Company’s segments include Red Lake Gold Mines Ontario Partnership (Red Lake), Goldcorp Canada Ltd./Goldcorp Inc. (Porcupine), Musselwhite, Les Mines Opinaca Ltee (Eleonore), Minera Penasquito S.A. de C.V. and Camino Rojo S.A. de C.V. (Penasquito), Desarrollos Mineros San Luis S.A. de C.V. (Los Filos), Montana Exploradora de Guatemala S.A. (Marlin), Oroplata S.A. (Cerro Negro), Corredor SpA (Project Corridor), Minera Alumbrera Limited (Alumbrera), El Morro and Pueblo Viejo Dominicana Corporation (Pueblo Viejo). More from Reuters »
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