Yahoo Finance Goldcorp Concludes Acquisition of Exeter Resource
- By Alberto Abaterusso
Goldcorp Inc. (GG) informed the market through a news release published June 21 on its Web site that the offer to acquire ordinary shares of Exeter Resource Corp. (XRA), a Canadian junior mining company engaged in the exploration and development of mineral properties in Chile, has expired.
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The intrinsic value of GG
The transaction - worth an estimated $185 million - with which one share of Exeter has been exchanged with 0.12 shares of Goldcorp is therefore successfully concluded.
Considering the volume of 2,435,950 shares that were asked by Exeter Resource's shareholders to be exchanged with Goldcorp's shares during the extended tender period's validity. Considering an additional volume of 645,448 shares - deposited as a guarantee - of the Canadian junior explorer that Goldcorp will acquire, Goldcorp will become owner of Exeter Resource for approximately 83.2%.
This percentage of ownership is equal to a volume of 78,074,284 shares of Exeter Resource.
In the previous announcement about this transaction, Goldcorp informed the market that it has the intention to acquire any of the remaining shares of Exeter that are still held by the Canadian junior explorer's shareholders, either through a successive acquisition deal or a compulsory procedure.
Goldcorp in collaboration with Barrick Gold Corp. (NYSE:ABX), according to a 50-50 joint venture, can now take action on the Caspiche project - Exeter's flagship - a property that is not so far from the Cerro Casale project.
The Caspiche project already holds a preliminary economic assessments (or PEA) that envisages three economically viable options for the development of the mineral deposit which together with some information about the ore body are explained in my previous article.
The completion of the transaction with Exeter Resources is not the only news that defined the day for Goldcorp's shareholders and traders. The Canadian gold producer also informed the market that it agreed with Orla Mining Ltd. (OLA.V) on the sale of its 100% interest stake in the Camino Rojo oxide project.
Orla Mining is another Canadian metallic explorer that holds a project in Panama, the Cerro Quema.
The Camino Rojo project is located in the Mexican province of Zacatecas and will be exchanged with Orla Mining's 19.9% ordinary shares, issued and outstanding. Goldcorp will also get a net smelter return (NSR) royalty of 2% that will be computed on the total revenue that will come from the metal produced at Camino Rojo. This agreement also gives Goldcorp the right to appoint a member to Orla Mining's board of directors if its percentage of ownership in the Canadian explorer stays above 10%.
The most interesting point about this agreement, which is expected to close sometime in the second half of the year, for Goldcorp's shareholders is that the Canadian gold producer "has the option to acquire up to a 70% interest in future sulphide projects," the company reports.
Orla Mining is currently engaged in the Cerro Quema - a gold development project in Panama - that is believed to be one of the most prolific ore deposits in the world. Concerning Cerro Quema, Orla has already obtained all the necessary permits to explore the area and those concerning the assessment of the environment are proceeding as planned. The location provides the company with all the utilities and communication services that the exploration team needs to undertake its activity on the site.
The project area is located approximately 190 kilometers southwest of Panama City by air and only 45 kilometers southwest of Chitre.
Goldcorp is trading at $13.39 per share with a price-sales (P/S) ratio of 3.27, a price-book (P/B) ratio of 0.84, a price-earnings (P/E) ratio of 45.86.
Disclosure: I have no positions in any stock mentioned in this article.
This article first appeared on GuruFocus.
Warning! GuruFocus has detected 2 Warning Sign with GG. Click here to check it out.
The intrinsic value of GG
