As acquisitions in the mineral industry go, this one is small: a deal worth only $1.2 billion. That is what Vancouver’s GOLDCORP has offered to acquire all outstanding shares of Toronto-based GOLD EAGLE MINES. Gold Eagle’s chief asset is the Bruce Channel gold discovery adjacent to Goldcorp’s Red Lake gold mine and southwest of the former Cochenour-Willians mine.
The Bruce Channel project has reached the advanced underground exploration stage. Gold Eagle estimates that the program will cost $65 million, not an inconsiderable sum, but one that Goldcorp can more easily supply than the tiny junior. Gold Eagle has already traced the mineralized envelope over 1,450 metres vertically and approximately 800 metres northeast-southwest and 450 metres northwest-southeast. Drill results reported in July 2008 included 13.1 g/t over 4.5 metres and a whopping 225.0 g/t (or better than 6.5 opt!) over 0.3 metres.
Control of yet another high-grade gold deposit is a natural fit for the owner of the world’s richest gold mine. Goldcorp, which already owned the Red Lake mine, bought out BARRICK’s and Campbell mine in 2006 after the later company acquired PLACER DOME. Goldcorp wasted no time combining and optimizing the two operations into one. Goldcorp’s Red Lake operation produced over 700,000 oz of gold in 2007. Proven and probable reserves at the end of last year were estimated at approximately 6.9 million tonnes averaging more than 20.4 g/t Au or containing over 4.5 million oz.
Goldcorp president and CEO Kevin McArthur noted that his company will now have full ownership of an 8-km swath in the heart of the Red Lake Gold Camp, one of the world’s richest. Development can now move forward, he said in a press release, “as a single, comprehensive project, sharing mine infrastructure, ore processing facilities and human talent with Red Lake, thus minimizing capital and operating costs.”
That’s what Goldcorp does bestcombine and conquer.
Detailed information about the Red Lake operations is available at www.Goldcorp.com and about the Bruce Channel deposit at www.GoldEagleMines.com.