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Murphy''s ''Midas'' commentary for December 5 posted in the clear at GoldSeek.com
Goldcorp Agrees to Buy Wheaton River
From Reuters
Sunday, December 5, 2004
http://www.reuters.com/financeQuoteCompanyNewsArticle.jhtml?
duid=mtfh22368_2004-12-05_23-24-31_wen0725_newsml
NEW YORK -- Canadian mining company Goldcorp Inc.
plans to buy Wheaton River Minerals Ltd in an
all-share offer in which Goldcorp will offer one
share for every four Wheaton River shares, the
companies said in a statement.
Gold and silver miner Wheaton River had rejected a
$1.8 billion takeover bid by silver producer Coeur
d'Alene Mine Corp. and in September the company
backed off.
* * *
Goldcorp and Wheaton River to Create
World's Lowest-Cost, Million-Ounce Gold Producer
Joint Company Press Release
via Business Wire
Sunday, December 5, 2004
http://biz.yahoo.com/bw/041205/55028_1.html
TORONTO and VANCOUVER -- Goldcorp Inc. and Wheaton
River Minerals Ltd. announce that they have reached an
agreement in principle to combine to create the world's
lowest-cost, million-ounce gold producer. The combination
would be effected through a share exchange takeover bid
where Goldcorp would offer one common share of Goldcorp
for every four common shares of Wheaton River.
Highlights of the combined company would include:
* Production. 2005 gold production expected to be in
excess of 1.1 million ounces at a total cash cost of
less than US$60 per ounce.
* Growth. Production expected to grow to 1.5 million
ounces of gold by 2007.
* Balance sheet. Strong balance sheet with over
US$500 million in cash and gold bullion, with no debt.
* Reserves. Proven and probable reserves of 10.5
million ounces plus additional measured and indicated
resources of 9.5 million ounces as of December 31,
2003, all of which are unhedged.
* Liquidity. Combined daily average trading liquidity of
over US$60 million.
* Market capitalization. Expected to be approximately
US$5 billion.
Goldcorp's offer represents:
* A value of C$4.29 for each Wheaton River common
share based on the December 3, 2004, closing price
(C$17.15) of Goldcorp common shares on the Toronto
Stock Exchange.
* A premium of approximately 7 percent to Wheaton
River's average closing market price for the previous 30
days on the Toronto Stock Exchange.
The making of the offer is subject to board approval of a
definitive agreement between Goldcorp and Wheaton
River, the satisfactory completion of due diligence
investigations, and the receipt by Wheaton River of an
opinion from its financial advisor that the consideration
offered under the offer is fair, from a financial point of
view, to its shareholders.
Goldcorp and Wheaton River have agreed to negotiate
exclusively with each other for 21 days and to exchange
confidential information with a view to completing their
due diligence investigations and settling a definitive
agreement as soon as possible.
"This is a great combination! It achieves our strategic
goals for production growth, diversification, financial
strength, and senior management. I am confident that
the new Goldcorp will be uniquely positioned in the
gold industry to accelerate the growth of value for our
shareholders," said Robert R. McEwen, chairman
and chief executive officer of Goldcorp.
"Goldcorp owns one of the richest gold mines in the
world. The combination of Wheaton River and
Goldcorp doubles gold production, maintains the
lowest costs in the industry, and provides a strong
platform for future growth," said Ian W. Telfer,
chairman and chief executive officer of Wheaton
River.
Under the agreement in principle, Mr. McEwen
would remain the chairman of the board and Mr.
Telfer would become chief executive officer of the
combined company upon completion of the offer.
The board of directors would be comprised of 10
members, of whom five would be current directors
of Wheaton River.
If a definitive agreement is reached and the offer is
made, it would be conditional on Goldcorp acquiring
at least 66.67 percent of Wheaton River's common
shares calculated on an undiluted basis and other
customary conditions. In addition, Goldcorp would
be entitled to a termination fee of US$35 million
upon the occurrence of customary termination fee
events, including the termination of the definitive
agreement by Wheaton River in order to enter into
a superior proposal with a third party. Upon the
closing of the combination, Wheaton River's
outstanding warrants would become Goldcorp
warrants on the basis of the exchange ratio under
the offer.
Goldcorp has retained GMP Securities Ltd. to act
as Goldcorp's financial advisor and Fraser Milner
Casgrain LLP to act as Goldcorp's legal advisor.
Wheaton River's board of directors has established
a committee of independent directors to evaluate the
combination and make a recommendation to the
Wheaton River board of directors. Wheaton River's
special committee has retained Merrill Lynch to act
as Wheaton River's financial advisor and Davies Ward
Phillips & Vineberg LLP to act as Wheaton River's
legal advisor.
A conference call is scheduled for Monday, December
6, at 11 a.m. Eastern time. The call-in numbers are:
* Local and international: 416-695-9757.
* North American toll-free: 1-877-888-4210.
Goldcorp's Red Lake Mine is the richest gold mine in
the world. Goldcorp is in excellent financial condition:
has NO DEBT, a Large Treasury, and Strong Cash
Flow and Earnings. GOLDCORP is completely
UNHEDGED and pays a dividend 12 times a year.
Goldcorp's shares are listed on the New York and
Toronto Stock Exchanges under the trading symbols
of GG and G, respectively, and its options trade on
the American Stock Exchange (AMEX), the Chicago
Board of Options Exchange (CBOE) and the Pacific
Stock Exchange (PCX), in the United States and
on the Montreal Exchange (MX) in Canada. Gold is
better than money, and Goldcorp is Gold.
Wheaton River is a leading gold producer and expects
2006 production from all of its mines to increase to
approximately 800,000 ounces of gold at a total cash
cost of less that US$100 per ounce. Current production
exceeds 500,000 gold equivalent ounces (over 400,000
ounces of gold and 7 million ounces of silver) at a total
cash cost of less than US$50 per ounce.
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