In a move it says is aimed at bolstering its balance sheet and strengthening its competitiveness, Goldcorp (G-T) has agreed to sell 5 million units to a syndicate of underwriters led by Griffiths McBurney & Partners.
Each unit, which comprises one share plus half a share purchase warrant, is priced at $18. One purchase warrant allows the holder to buy one share for US$25 for up to 5 years after closing. Adjustments will be made to reflect the 2-for-1 stock split recently approved by the company’s shareholders.
Goldcorp has also granted the underwriters an option to acquire up to another 3 million units under the same terms. The option is good until the end of the offering, which is slated for the end of April.
On completion of the bought deal, Goldcorp will have US$170 million in cash, without considering the underwriter’s option. Bullion inventories tally to US$15 million.
Shareholders representing about 60% of the Goldcorp’s outstanding shares recently voted 99.7% in favour of the company’s plan to double its number of outstanding shares to just over 165 million.
The mid-tier gold producer operates the Red Lake and Wharf mines in northern Ontario and South Dakota, respectively. Red Lake is the Canada’s highest-grade gold mine.
In its first full year of production in 2001, Red Lake mine poured 503,385 oz. of the yellow metal at a cash cost of US$59 per oz. The mine was officially reopened in October 2000.
For 2002, the company expects to produce about 570,000 oz. at less than US$100 per oz. The decrease from 2001 reflects the decision to curtail development at Red Lake in favour of exploration.
Goldcorp has listings on the Toronto, New York, American and Chicago Board of Options exchanges.
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