Today’s news is about Goldcorp and their recent acquisition of Kaminak Gold. The two companies have entered into an agreement offered by Goldcorp to acquire all of the outstanding shares of Kaminak Gold at a total of approximately C$520 million or US$405 million.
“Under the Arrangement, each common share of Kaminak will be exchanged for 0.10896 common shares of Goldcorp. Based on the closing price of Goldcorp’s common shares on the Toronto Stock Exchange on May 11, 2016, the transaction values each Kaminak share at C$2.62. The consideration received by Kaminak shareholders represents a 40% premium over the 20-day volume-weighted average share price of Kaminak from all trading on Canadian exchanges for the period ending May 11, 2016 and a premium of 33% over Kaminak’s closing share price on the TSX Venture Exchange on May 11, 2016. The number of Goldcorp shares to be issued under the Arrangement will be approximately 21.6 million based on the issued and outstanding shares of Kaminak as of the announcement date, but will be subject to adjustment depending on the number of Kaminak options that may be exercised prior to the completion of the Arrangement.”
Goldcorp CEO and President, David Garofalo, is very optimistic about Kaminak’s flagship project, Coffee Gold. It is a structurally hosted hydrothermal gold deposit located approximately 130 kilometres south of the City of Dawson, Yukon. Coffee is a high-grade, open pit, heap leach mining project located in a top tier mining jurisdiction. The Coffee land package, comprising over 60,000 hectares, demonstrates significant potential for near-mine discoveries, with mineralization remaining open along strike and at depth. Coffee currently has total indicated gold mineral resources of 3.0 million ounces (63.7Mt at 1.45g/t) inclusive of total probable gold mineral reserves1 of 2.2 million ounces (46.4Mt at 1.45g/t), and total inferred gold mineral resources of 2.2 million ounces (52.4Mt at 1.31g/t).
We were excited to hear about this smart acquisition because it means that Goldcorp has the opportunity to close the gap between it’s third largest gold producer position and the second and first position of Newmont Gold and Barrick Gold, respectively. We feel priviledged to have done business with Goldcorp as they looked for earthmoving equipment in the past and are looking forward to a continued relationship as they continue to succeed in all their endeavours.
*All information for this story was taken from goldcorp.com.