The Goldcorp Deal - $205 per ounce....Goldcorp has agreed to buy fellow Canadian gold miner Gold EagleMines for about $1.5 billion to pick up the Bruce Channel golddiscovery, an exploration project adjacent to Goldcorp's flagship RedLake operation.
Goldcorp, Canada's No. 2 gold producer, alsoreported an unexpected second-quarter loss, cut its production outlookfor the year and boosted its 2008 cost estimates.
The Gold Eagletakeover comes as large gold producers have tried to boost theirpipelines by acquiring smaller players with early-stage properties.
This month, Kinross Gold bid $1 billion for Aurelian Resources for its Fruta del Norte discovery in Ecuador.
Underthe friendly deal with Goldcorp, Gold Eagle shareholders will receive$6.80 in cash and 0.146 shares of Goldcorp for each of their shares.Goldcorp already owns 4.7 per cent of Gold Eagle.
"This adds a number of high-grade gold ounces in our own backyard," Goldcorp CEO Kevin McArthur said.
The offer values each Gold Eagle share at $12.62, a 19-per-cent premium to Wednesday's close.
The deal follows a move by gold miner Agnico-Eagle last month to buy about five per cent of Gold Eagle.
"Clearly,Agnico-Eagle set off alarm bells and Goldcorp has responded veryaggressively," said Barry Allan, an analyst at Research Capital inToronto.
An Agnico-Eagle spokesman said the company was evaluating its options.
BruceChannel does not have an established resource, as the depth of thedeposit has made drilling difficult, but Allan estimated it was at least7.3 million ounces. Goldcorp will be able to access the deposit throughone of its own nearby shafts and will drill from there to establish aresource, although that likely won't be ready until the end of nextyear, the company said.
It will also have to sink a new production shaft.
The company gave a rough estimate of the all-in mine costs, including the cost of acquisition, at less than $650 an ounce