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GOLD AMALGAMATION – Goldcorp, Glamis to create low-cost gold giant

TORONTO - Vancouver-based GOLDCORP and GLAMIS GOLD of Reno, Nevada, have agreed to combine in a US$21.3-billion tra...


TORONTO – Vancouver-based GOLDCORP and GLAMIS GOLD of Reno, Nevada, have agreed to combine in a US$21.3-billion transaction. The move will create one of the world’s largest gold mining companies, continuing business under the Goldcorp name. Glamis shareholders will receive 1.69 common shares of Goldcorp for each of their Glamis shares, which works out to a value of approximately US$51.49 per Glamis share.

Glamis has agreed to pay a break fee to Goldcorp under certain circumstances of US$215 million, and to provide Goldcorp with a right to match competing offers.

The Goldcorp-Glamis combination will create a 2.5-million-oz/year gold producer with among the world’s lowest costs. In 2006, Goldcorp estimates it will produce 1.8 million oz of gold at total cash costs of less than US$100/oz. Glamis plans to pour more than 700,000 oz of gold by 2007. Both companies enjoy unhedged production and reserves.

The total production figure is well ahead of the 1.6 million oz of gold that KINROSS GOLD produced in 2005, but lags behind the 5.5 million oz produced by BARRICK GOLD, the 6.2 million oz produced by Anglogold Ashanti and the 8.6 million oz sold by NEWMONT in 2005.

Together Goldcorp and Glamis post some other excellent numbers. They will have proven and probable reserves of approximately 41.1 million oz of gold. Their measured and indicated resources will be 14.0 million oz, and their inferred resources will contain 30.9 million oz.

Goldcorp president and CEO Ian Telfer will become chairman of the new Goldcorp. Kevin McArthur, who is now president and CEO of Glamis, will retain those titles at the merged company. Interestingly, the executive changes echo those made in 2005 when Goldcorp took over WHEATON RIVER. At that time, Goldcorp founder and president/CEO Rob McEwen stepped up to the chairmanship and Wheaton CEO Telfer became president and CEO of the new enterprise.

The directors and senior officers of both Goldcorp and Glamis have approved the merger, which is expected to be complete in November 2006.

Information about each company’s worldwide operations can be found at their websites, www.Goldcorp.com and www.Glamis.com.


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