A combined GOLDCORP-WHEATON RIVER company will look to make an acquisition in the “very near future” that will raise its production by 500,000 oz of gold a year, Wheaton chairman and CEO Ian Telfer told a conference call organized by the two companies.
A combination of Toronto-based Goldcorp and Vancouver-based Wheaton River would have production of 1.5 million oz of gold per year and would look to increase this very quickly, Telfer added. “You’ll likely see us make an acquisition to get us up to the 2-million-oz level in the very near future.”
The new acquisition would most likely be in the Americas, where the combined company would have practically all of its operations, Telfer added.
Goldcorp chairman and CEO Rob McEwen, who has a personal investment in Goldcorp of about US$100 million, told the conference call that he strongly favours his company’s proposed takeover of Wheaton River rather than Reno-based GLAMIS GOLD’s hostile takeover bid for Goldcorp.
Glamis is making the “classic mistake” of attempting to grow to become bigger and not to become better, while the deal would not to lead to growth in earnings, McEwen said. He added that Glamis is proposing to issue 175 million shares as part of its takeover offer for Goldcorp, representing 135% of their outstanding shares, and said this will “trip” the company’s progress. Glamis is also an overvalued company, while its net income and gold production are much smaller than Wheaton’s, he insisted.
Goldcorp is offering one common share of Goldcorp for every four common shares of Wheaton River in a deal estimated to be worth approximately US$2 billion, while Glamis has offered 0.89 of a Glamis common share for each Goldcorp common share in a bid estimated at US$3.4 billion.