Amalgamation of Dickenson, Goldcorp before shareholders

Shareholders will vote March 16 on a plan to amalgamate Dickenson Mines (TSE), Goldcorp (TSE) and CSA Management (TSE).

The boards of directors of the three related companies have approved a proposed reorganization which will combine the principal assets of Goldcorp and Dickenson, together with CSA’s Goldcorp-related assets. (The new company has been nicknamed “Amalco;” no new corporate name has been revealed.) Dickenson’s major asset is the producing White gold mine at Red Lake, Ont. An initial plan of amalgamation proposed last year was sidelined by the Securities and Exchange Commission in the U.S.

The reorganization will consolidate the exploration interests of Goldcorp and CSA into a new public company, Lexam Explorations.

Also, CSA shareholders will exchange their shares for shares of a newly formed company (“new CSA”), which will hold all of CSA’s assets and liabilities other than its shares of Goldcorp and the management agreement between CSA and Goldcorp (which will be extinguished after the amalgamation). The proposed share exchanges and dividends are:

* 1 Goldcorp A for 1.4 Amalco A and receive 0.5 Lexam common as a dividend from Goldcorp;

* 1 Dickenson A for 1 Amalco A; 1 Dickenson B for 1 Amalco B; * 1 CSA A for 1 “new CSA” A; and 1 CSA B for 1 “new CSA” B.

The A subordinate-voting shares of Amalco will be entitled to one vote per share and the B multiple-voting shares of Amalco will be entitled to 10 votes per share. (The Dickenson A shares are subordinate-voting, and the Goldcorp A shares and the CSA A shares are non-voting. The “new CSA” A shares will be non-voting.)

CSA owns 18.3% of the A shares and all the common shares of Goldcorp (representing 18.3% of the equity and all the votes of Goldcorp). Goldcorp owns 61.1% of the A shares and 89.2% of the B shares of Dickenson (representing 69.3% of the equity and 83.8% of the votes of Dickenson). After the amalgamation, the ownership will be as follows:

* “New CSA” will own 15.2% of the A shares and 66.9% of the B shares of Amalco (representing, on an undiluted basis, 18% of the equity and 34% of the votes). In addition, “new CSA” will hold warrants to buy 1.12 million B shares of Amalco at an exercise price of $8.07 per share.

* The shareholders of Goldcorp, other than CSA, will own 67.8% of the A shares of Amalco (representing, on an undiluted basis, 64.1% of the equity and 43.2% of the votes).

* The shareholders of Dickenson, other than Goldcorp, will own 17% of the A shares and 33.1% of the B shares of Amalco (representing, on an undiluted basis, 17.9% of the equity and 22.8% of the votes).

Goldcorp and Dickenson own 14.6% and 35.7%, respectively, of the common shares of Wharf Resources (TSE). After the amalgamation, Amalco will own 50.3% of the common shares of Wharf, a heap-leach gold producer in South Dakota.

It is also proposed that Goldquest Exploration (CDN), in which Dickenson has a 62% interest, be amalgamated with a wholly owned subsidiary of Dickenson. Goldquest shareholders would receive one subordinate-voting A share of Dickenson for each 20 Goldquest common shares. Goldquest owns exploration properties in the Red Lake area.