MINING NEWS: New gold firm hungry to expand

A new North American gold powerhouse is in the making following the merger of Goldcorp and Wheaten River Minerals, two mid-size Canadian producers, whose combined entity now ranks No. 5 on the continent.

With the champagne still flowing and the ink still drying on the deal, Ian Telfer, president and chief executive officer of the new Goldcorp, wasted no time talking about expansion. He said Goldcorp’s objective will be to double production and attain what he views as the benchmark 2 million ounce mark sometime in 2005.

He wouldn’t go beyond hinting at an imminent deal in North or South America, but analysts were buzzing about prospects of an acquisition in Mexico, Argentina, Venezuela, Brazil, Chile or Peru.

The C$2.3 billion stock swap beat out a hostile bid of C$3.3 billion from Glamis Gold. Over the past year, Wheaton failed to close a friendly C$2.6 billion merger with IAMGold, then fought off a hostile C$3 billion bid by Idaho-based Cour d’Alene Mines.

Against that turbulent background, 65 percent of Goldcorp shareholders approved the Wheaton transaction, well above the required 50 percent.

Goldcorp’s previous chief executive Robert McEwen, who will stay on as chairman of the new entity, believes there will be a wave of mergers and acquisitions now that one transaction has been successfully completed.

But Telfer doubts there will be another hostile campaign. “They have all failed miserably,” he told the Financial Post. “When you go hostile you have advisers and they have a sheet of dirty tricks they pull out. You just start getting mud thrown back and forth.”

The past year has been littered with failed bids, both hostile and friendly, in addition to Wheaton’s experiences. IAMGold rebuffed a C$1.1 billion stock swap offer from Colorado-based Golden Star Resources and later failed to close its own friendly US$2.1 billion attempt to buy South Africa’s Gold Fields

—Gary Park