DOING DOME DIGGING – Goldcorp unloading Placer Dome properties

Almost as quickly as it could get its hands on some of Placer Dome's former assets, Vancouver-based GOLDCORP began ...
Almost as quickly as it could get its hands on some of Placer Dome's former assets, Vancouver-based GOLDCORP began unloading them. Not all of them, but some of the smaller bits and pieces that were part of its US$1.5-billion purchase.

Goldcorp agreed to acquire Placer Dome's interest in the Campbell gold mine, Porcupine joint venture (the Dome and Hoyle Pond gold mines) and the Musselwhite gold mine in Ontario. It also picked up a 50% interest in the La Coipa gold-silver mine in Chile and a 40% interest in the Pueblo Viego development project in the Dominican Republic. The deal with Goldcorp was part of BARRICK GOLD's larger, US$10.4-billion takeover of Vancouver-based PLACER DOME.

Vancouver's ATLAS CROMWELL has agreed to purchase 100% interest in the Mount Milligan gold-copper deposit, 51% interest in the Berg copper-molybdenum-silver deposit, and an option to earn a minimum 51% interest in certain gold properties in the Toodoggone area (all in British Columbia). In Nunavut Atlas Cromwell is picking up 100% of the Maze Lake gold project, and in the Yukon it will acquire a residual interest in the Howards Pass zinc-lead-silver projects. The company also has a right of first offer on three additional gold properties owned by Goldcorp in Ontario and Quebec.

For these assets, Atlas Cromwell is issuing convertible, preferred shares worth Cdn$120 million to Goldcorp. If Goldcorp converts the preferred shares to common shares, it will own roughly 80% of the company, to be renamed TERRANE METALS CORP.

Goldcorp has is also selling three gold properties near Red Lake, Ont., to Vancouver's HALO RESOURCES ( Halo is picking up Goldcorp's 100% interest in the Middle and Pipestone properties and a 50% interest in the Biron Bay property. The cost of the total transaction was not revealed, but Halo can earn a 60% interest and become the operator of the Biron Bay project if it invests Cdn$3.0 million over three years.

Not surprisingly, Goldcorp is holding onto the Campbell gold mine adjacent to its flagship Red Lake gold mine. Both are very high-grade, extremely profitable operations.

Goldcorp may have several reasons for selling the properties described above. Perhaps they are not a good fit with Goldcorp's corporate vision. Perhaps Goldcorp is looking to recoup some of the money it paid out to Barrick, but this seems unlikely as the company treasury was well-enough stocked to pay cash for the former Placer Dome assets. Perhaps Goldcorp has already taken a look at the properties and decided they have nothing of economic interest.

For Halo and Atlas Cromwell, the purchases may provide the stepping stones to becoming successful producers. Similar strategies have worked before.

In recent years, FNX MINING and partner DYNATEC picked up several former producing properties that had belonged to INCO near Sudbury. FNX has since become a successful nickel miner by reopening the McCreedy West mine; the old Levack mine, Podolsky property and PM deposit may be next. Dynatec sold its share to FNX and used the knowledge gained to advance the large-tonnage Ambatovy nickel laterite project in Madagascar. In the meantime, it is producing coalbed methane- in West Virginia.

Both Halo and Atlas (soon-to-be Terrane) are juniors, and like so many others should be able to raise exploration and development money in these times of high commodity prices. We wish them success.


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