Goldcorp (GG) to Buy Probe Mines

Shares of Goldcorp Inc. (GG) were up +0.62 or +2.60 percent to $24.43 per share in premarket trading this morning, after news that the company had made a bid on Probe Mines Ltd., a smaller gold miner. Goldcorp Inc. stock closed at $23.81 per share, up +1.12 or +4.94 percent in Friday's regular trading session.

Vancouver, British Columbia based Goldcorp is a Canadian gold mining company involved in the exploration for gold, as well as the extraction, reclamation and processing of the metal.
The company operates five mines in Canada and the United States, three mines in Mexico and two mines in South America, as well as interests in development projects in Argentina, Chile and the Dominican Republic.

Ontario, Canada based Probe Mines, which is traded on Canadian exchanges under the ticker PRB.V, is a gold mining and exploration company which is focused on the Borden Lake project. The Borden Lake project located in Chapleau, Ontario is a global resource of over 1.6 million ounces of gold with potential for alternative scenarios for development.

The deal disclosed yesterday, will have Goldcorp â?? which already owns 8.4 million shares or 9.3 percent of Probe Mines â?? exchange 0.1755 common shares of Goldcorp for each common share of Probe that it does not already own. The transaction will give Probe shareholders a 49 percent premium over Probe's Friday closing price, valuing each Probe share at $5 Canadian or $526 million Canadian dollars, approximately $440 million in U.S. dollars.

Goldcorp estimates that it will issue approximately 17 million shares based on issued and outstanding shares as of the date of the announcement, but will be subject to adjustments depending on the number of warrants and options exercised under the arrangement. The deal is expected to close by the end of March of 2015.

Chuck Jeannes, Goldcorp's President and CEO said in a statement that, "This transaction is consistent with Goldcorp's longstanding strategy of securing growth opportunities in and around our existing districts with a focus on low-cost, high-quality gold production. Borden is a high-quality deposit that is mineable through conventional underground mining methods. Goldcorp is uniquely suited to add Borden to its asset portfolio due to its proximity to our Porcupine operation, which includes the large milling facility at the Dome complex."

The transaction has been tentatively approved by the boards of both companies, but is still subject to a favorable vote of 66 and 2/3 percent of Probe common shareholders that will vote on the deal in a special meeting to approve the transaction. If the deal does not go through, Goldcorp has agreed to pay Probe a termination fee of $18.4 million Canadian dollars. Probe also agreed to provide Goldcorp with the right to match any competing offers should they arise.

Goldcorp and Probe stocks have already gained significantly in the past two weeks as a result of the more than +$100 per ounce rise in the price of gold. Goldcorp has already been recommended by a number of analysts, which could see the stock continue to appreciate. Probe Mines stock is already trading at the $5 CAD level of the transaction and could be the subject of a competing bid.

Other News About Goldcorp
One of its subsidiaries will sell 100 percent interest in Wharf Mine in SD to Coeur Mining Inc.
Goldcorp to release 2014 fourth quarter results and host conference call and webcast on February 19th
Company will release earnings before the market opening and hold a conference call at 10AM.

Other Stocks in the News
Halliburton results beat expectations
Company reports good numbers but gives a warning in the wake of their acquisition.
Morgan Stanley profit falls short of expectations
Company attributes lower than expected results on market swings in the last quarter.

Published on Jan 20, 2015
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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