Viacom Inc. VIAB

Goldcorp to buy Eleonore

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Goldcorp to buy Eleonore project from Virginia Gold Goldcorp Inc (2) (:G) Shares Issued 359,500,000 Last Close 12/2/2005 $23.78 Monday December 05 2005 - News Release Also Virginia Gold Mines Inc (2) (TSX:VIA) News Release Ms. Julia Hasiwar of Goldcorp reports GOLDCORP TO ACQUIRE ELEONORE GOLD PROJECT FROM VIRGINIA GOLD Goldcorp Inc. has entered into an agreement with Virginia Gold Mines Inc. to acquire Virginia's Eleonore gold project pursuant to a plan of arrangement involving Virginia. The transaction will combine Goldcorp's operational and financial strength with Virginia's world-class exploration asset, the Eleonore gold project in James Bay, Que. "Eleonore is a unique and significant property located in the core of what Goldcorp believes is one of the most promising new gold districts in North America," said Ian Telfer, president and chief executive officer of Goldcorp. "The incredible success that Virginia has had in the short time since discovery in late 2004, when combined with accessible infrastructure and a mining-friendly regulatory environment, reinforce the quality of this asset. Of the 212 drill holes completed to date on the entire property, over 70 per cent have reported assays greater than 10 grams of gold per tonne, and the principal Roberto deposit remains open in both strike and depth. Goldcorp plans to continue aggressive exploration and development on Eleonore, with resource and scoping studies to be initiated early in 2006." "All of us at Virginia wanted to see Eleonore developed by a qualified and experienced mine development team and Goldcorp with their Canadian expertise is without any doubt one of the best in the industry," said Andre Gaumond, president of Virginia. Based on the 10-day weighted average trading price for Goldcorp's common shares on the Toronto Stock Exchange of $24.70, the transaction values the Eleonore gold project at approximately $420-million (U.S.). Goldcorp will issue 19.6 million common shares pursuant to the transaction, representing approximately 5 per cent of the 359.5 million common shares outstanding after giving effect to this transaction. Completion of the transaction is subject to entering into definitive agreements, approval by Virginia shareholders and the receipt of regulatory approvals, including the approval of the Toronto Stock Exchange. Goldcorp expects that the transaction will close in the first quarter of 2006. The boards of directors of each company have unanimously approved the transaction. The board of directors of Virginia has received an opinion from Orion Securities Inc. that the transaction is fair, from a financial point of view, to Virginia shareholders. Officers and directors of Virginia have entered into lock-up and support arrangements with Goldcorp under which they have agreed to vote in favour of the transaction. Virginia has agreed to pay Goldcorp a break fee equal to 4 per cent of Virginia's market capitalization, calculated on a fully diluted basis, in the event that the transaction is not completed in certain circumstances. Under the agreement, shareholders of Virginia will receive 0.4 of a Goldcorp common share and 0.5 of a share in a new public exploration company (New Virginia) for each issued and outstanding Virginia share. Virginia will be acquired by Goldcorp and will retain the Eleonore project. New Virginia will hold all other assets of Virginia, including net working capital, cash to be received prior to closing from the exercise of Virginia options and warrants, its non-Eleonore exploration assets and a sliding-scale 2-per-cent net smelter return royalty on the Eleonore project. In addition, the holders of Virginia warrants will receive warrants of Goldcorp and New Virginia, based on applicable exchange ratios, in exchange for such Virginia warrants, and all stock options or other rights to subscribe for unissued securities of Virginia will either be exercised or terminated. In connection with this transaction, Goldcorp also has the right to subscribe for up to 5 per cent of New Virginia's common shares with warrants to enable Goldcorp to acquire up to an additional 2 per cent. Pricing of the shares and the warrants will be determined in the context of the market. © 2005 Canjex Publishing Ltd.