Goldcorp to acquire Kaminak Gold for $520-million
2016-05-12 09:09 ET - News Release
See News Release (C-G) Goldcorp Inc (2)
Mr. David Garofalo of Goldcorp reports
GOLDCORP ANNOUNCES ACQUISITION OF KAMINAK GOLD CORPORATION
Goldcorp Inc. and Kaminak Gold Corp. have entered into a definitive arrangement agreement, pursuant to which Goldcorp has agreed to acquire, by way of a plan of arrangement, all of the outstanding shares of Kaminak. The total consideration offered for all of the outstanding shares of Kaminak is approximately $520-million.
Under the arrangement, each common share of Kaminak will be exchanged for 0.10896 common share 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 $2.62. The consideration received by Kaminak shareholders represents a 40-per-cent 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 per cent 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.
Kaminak's key asset is the 100-per-cent-owned Coffee gold project, 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 three million ounces (63.7 million tonnes at 1.45 grams per tonne), inclusive of total probable gold mineral reserves of 2.2 million ounces (46.4 million tonnes at 1.45 grams per tonne) and total inferred gold mineral resources of 2.2 million ounces (52.4 million tonnes at 1.31 grams per tonne).
"This acquisition is consistent with our strategy of partnering with junior exploration companies to identify and develop mining districts with significant exploration potential that is expected to grow our net asset value per share," said David Garofalo, Goldcorp president and chief executive officer. "Coffee is located within a politically stable jurisdiction and provides us with an opportunity to add high-quality ounces to our development pipeline at low all-in sustaining costs. With our strong financial position and mine construction expertise, we see significant potential to deliver value for all partners and stakeholders. We are committed to responsible, sustainable mining and will ensure this project is built to create lasting positive benefits for local first nations and communities."
The arrangement has been unanimously approved by the boards of directors of Goldcorp and Kaminak and will be subject to, among other things, the favourable vote of 66-2/3rds per cent of the holders of Kaminak shares and Kaminak options, voting as a single class, at a special meeting of Kaminak shareholders and option holders to be held no later than July 14, 2016; receipt of all necessary regulatory and court approvals; and the satisfaction of certain other closing conditions customary for a transaction of this nature.
The arrangement agreement includes customary deal protection provisions. Kaminak has agreed not to solicit any alternative transactions and, in certain circumstances, to pay Goldcorp a termination fee equal to $20.3-million in the event that the arrangement is not completed. Kaminak has also provided Goldcorp with certain other customary rights, including a right to match competing offers. Closing of the transaction is expected to occur no later than Aug. 15, 2016.
Directors, officers and certain shareholders of Kaminak representing approximately 27.5 per cent of Kaminak's outstanding shares have entered into voting support arrangements with Goldcorp, under which they have agreed to vote in favour of the transaction. BMO Capital Markets has provided an opinion to the Kaminak board of directors that the consideration offered under the arrangement is fair, from a financial point of view, to Kaminak's shareholders.
Advisers and counsel
Goldcorp's financial advisers are RBC Capital Markets and Fort Capital Partners, and its legal adviser is Cassels Brock & Blackwell LLP in Canada.
Kaminak shareholders and other interested parties are advised to read the materials relating to the proposed transaction that will be filed by Kaminak with securities regulatory authorities in Canada when they become available because they will contain important information. Anyone may obtain copies of these documents when available free of charge at the Canadian Securities Administrators' website on SEDAR. This announcement is for informational purposes only and does not constitute an offer to purchase, a solicitation of an offer to sell the shares or a solicitation of a proxy.
The scientific and technical information contained in this news release has been reviewed and approved by Gil Lawson, PEng, vice-president of geology and mine planning, Goldcorp, who is a qualified person under National Instrument 43-101.
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