Gold is back in the news with Goldcorp (GG) adding another nice mine to its growing gold assets. They don’t get much more aggressive than Goldcorp. When it sees something it likes, it usually get it, as the below excerpt makes clear. From the Globe and Mail…
Goldcorp Inc. (G-T46.180.481.05%) has struck a deal to buy Australian miner Andean Resources Ltd. (AND-T4.810.051.05%) for $3.6-billion in cash and shares, trumping a $3.2 billion all-share approach made hours earlier by Eldorado Gold Corp. (ELD-T20.530.321.58%)
The two Vancouver companies were vying for Andean and its Cerro Negro gold project in Argentina, a contest that marks yet another battle by Goldcorp to gain control of a desired asset and a long pursuit by Eldorado.
Goldcorp, the world’s second-largest gold producer by market capitalization, said the Andean deal helps it achieve a goal of boosting production and finding companies in low-risk geographic areas.
“This transaction fits that strategy perfectly, as Goldcorp’s strong financial position, technical expertise and track record of building mines responsibly and efficiently positions us to rapidly advance this project and maximize value for both Goldcorp and Andean shareholders and other stakeholders.,” Goldcorp chief executive officer Chuck Jeannes said in a statement.
Goldcorp’s deal with Andean was announced overnight, hours after Eldorado said it has approached the Andean board with its offer. Goldcorp’s bid, which has been approved by the Andean board, values the company at $6.50 per share compared to the Eldorado offer valued at $6.36
Goldcorp’s offer is a 35 per cent premium to Andean Resources closing price on the Toronto exchange Thursday.
Goldcorp has underperformed the S&P 500 over the past 12 months. This is very odd and represents a buying opportunity for investors who like gold and gold miners. I think everybody should have both in their portfolio.
