Post by Catdaddy on Feb 1, 2008 20:08:17 GMT -5
I just thought the timing of this merger was interesting.
Catdaddy
Goldcorp to Sell Its 48% Stake in Silver Wheaton (Update2)
By Stewart Bailey
Jan. 31 (Bloomberg) -- Goldcorp Inc., the world's second- largest gold producer by market value, will raise C$1.57 billion ($1.57 billion) by selling a stake in Silver Wheaton Corp. to fund the development of new mines.
The 108 million shares, representing a 48 percent stake in Silver Wheaton, will be sold for C$14.50 each, Goldcorp said today in a statement. That's a 6.3 percent discount to Silver Wheaton's stock price when trading was halted today on the Toronto Stock Exchange. Both companies are based in Vancouver.
``It was a strategic move that frees the balance sheet up to be more responsive to growth opportunities,'' Jeff Wilhoit, Goldcorp's vice president of investor relations, said in a telephone interview from Vancouver.
Goldcorp has budgeted $3.9 billion over the next five years to raise production by more than a third from new mines in Mexico, Canada, the U.S. and Guatemala. Silver Wheaton was formed by Goldcorp in 2004 to resell silver bought at a discount from mining companies including Glencore International AG and Lundin Mining Corp.
Silver Wheaton fell 69 cents, or 4.3 percent, to C$15.47 in Toronto at 4:10 p.m. The stock had gained 22 percent in the past year. Goldcorp fell C$1.13, or 2.9 percent, to C$37.34 at 4:19 p.m. in Toronto.
`Lot of Sense'
``It makes an awful lot of sense for Goldcorp,'' David Haughton, a Toronto-based mining analyst at BMO Capital Markets, said today in a telephone interview. The sale will increase Goldcorp's net asset value, said Haughton, who rates the company ``market perform.''
The stake will be sold to a group of banks, who will underwrite the purchase, Goldcorp said. The banks are led by Macquarie Group Ltd.'s Canadian unit, Genuity Capital Markets and GMP Securities LP.
The sale follows the C$1.2 billion initial public offering last month of Franco-Nevada Corp., the company formed to buy the royalty interests of Denver-based Newmont Mining Corp. That was Canada's biggest IPO since 2000.
Goldcorp is simplifying its structure. The company last year increased its share of the Musselwhite and Porcupine mines in Canada and sold its 50 percent stake in the La Coipa mine in Chile.
``The performance of the silver market factored heavily into our thinking to do it now,'' Wilhoit said. ``Everything seemed to line up -- it's a non-core holding and we wanted to get a good return.''
Precious Metals
Silver rose 15 percent last year and gold surged 31 percent, capping seven-year rallies for the metals, as investors sought to protect against a weakening dollar and inflation fueled by higher energy and food prices. The silver price soared 13 percent in January.
Goldcorp plans to produce the equivalent of 2.6 million ounces of gold this year at a cash cost of $250 an ounce. The company expects to increase production to 3.5 million ounces by 2011.
Barrick Gold Corp. is the world's biggest gold producer by market value.
To contact the reporter on this story: Stewart Bailey in New York at sbailey7@bloomberg.net .
Last Updated: January 31, 2008 19:09 EST
Catdaddy
Goldcorp to Sell Its 48% Stake in Silver Wheaton (Update2)
By Stewart Bailey
Jan. 31 (Bloomberg) -- Goldcorp Inc., the world's second- largest gold producer by market value, will raise C$1.57 billion ($1.57 billion) by selling a stake in Silver Wheaton Corp. to fund the development of new mines.
The 108 million shares, representing a 48 percent stake in Silver Wheaton, will be sold for C$14.50 each, Goldcorp said today in a statement. That's a 6.3 percent discount to Silver Wheaton's stock price when trading was halted today on the Toronto Stock Exchange. Both companies are based in Vancouver.
``It was a strategic move that frees the balance sheet up to be more responsive to growth opportunities,'' Jeff Wilhoit, Goldcorp's vice president of investor relations, said in a telephone interview from Vancouver.
Goldcorp has budgeted $3.9 billion over the next five years to raise production by more than a third from new mines in Mexico, Canada, the U.S. and Guatemala. Silver Wheaton was formed by Goldcorp in 2004 to resell silver bought at a discount from mining companies including Glencore International AG and Lundin Mining Corp.
Silver Wheaton fell 69 cents, or 4.3 percent, to C$15.47 in Toronto at 4:10 p.m. The stock had gained 22 percent in the past year. Goldcorp fell C$1.13, or 2.9 percent, to C$37.34 at 4:19 p.m. in Toronto.
`Lot of Sense'
``It makes an awful lot of sense for Goldcorp,'' David Haughton, a Toronto-based mining analyst at BMO Capital Markets, said today in a telephone interview. The sale will increase Goldcorp's net asset value, said Haughton, who rates the company ``market perform.''
The stake will be sold to a group of banks, who will underwrite the purchase, Goldcorp said. The banks are led by Macquarie Group Ltd.'s Canadian unit, Genuity Capital Markets and GMP Securities LP.
The sale follows the C$1.2 billion initial public offering last month of Franco-Nevada Corp., the company formed to buy the royalty interests of Denver-based Newmont Mining Corp. That was Canada's biggest IPO since 2000.
Goldcorp is simplifying its structure. The company last year increased its share of the Musselwhite and Porcupine mines in Canada and sold its 50 percent stake in the La Coipa mine in Chile.
``The performance of the silver market factored heavily into our thinking to do it now,'' Wilhoit said. ``Everything seemed to line up -- it's a non-core holding and we wanted to get a good return.''
Precious Metals
Silver rose 15 percent last year and gold surged 31 percent, capping seven-year rallies for the metals, as investors sought to protect against a weakening dollar and inflation fueled by higher energy and food prices. The silver price soared 13 percent in January.
Goldcorp plans to produce the equivalent of 2.6 million ounces of gold this year at a cash cost of $250 an ounce. The company expects to increase production to 3.5 million ounces by 2011.
Barrick Gold Corp. is the world's biggest gold producer by market value.
To contact the reporter on this story: Stewart Bailey in New York at sbailey7@bloomberg.net .
Last Updated: January 31, 2008 19:09 EST
