Mining News: Northern Neighbors: Goldcorp now owns Kaminak, Coffee gold project

Goldcorp Inc. July 20 said it has completed the acquisition of Kaminak Gold Corp. in an all-shares deal valued at roughly C$401 million when you consider the value of the Goldcorp shares on the day of the closing. As a result of the purchase, Goldcorp now has full ownership of the Coffee Gold project in Yukon Territory. According to a feasibility study published by Kaminak at the beginning of the year, the mine proposed for Coffee is expected to produce 184,000 ounces of gold per year over an initial 10-year mine-life. At a gold price of US$1,150 per ounce and an exchange rate of C$1.00 to US78 cents, the Coffee base case estimate generates an after-tax net present value at a five percent discount rate of C$455 million and an internal rate of return of 37 percent. “The acquisition of Kaminak and its Coffee project in the Yukon is consistent with our strategy of populating our asset pipeline with opportunities that are accretive to net asset value per share,” said Goldcorp President and CEO David Garofalo. “With a large, geologically prospective land package in a mining friendly jurisdiction, the Coffee project has the potential to grow into a camp to deliver long-term significant sustainable value for our partners and stakeholders. Kaminak has done an excellent job engaging with First Nations throughout the initial exploration phases, which will serve as a solid foundation for us to build upon as the project enters the next phase of development.” Goldcorp acquired all of the issued and outstanding common shares of Kaminak by issuing 0.10896 of a Goldcorp share for each outstanding Kaminak share. As a result, Goldcorp issued 20,997,312 Goldcorp shares to former Kaminak shareholders, who now hold roughly 2.5 percent of the 853,398,240 Goldcorp shares issued and outstanding, on an undiluted basis.

-Shane Lasley