Goldcorp and Glamis Agree to US$21.3 Billion Combination Creating the World’s
Premier Gold Mining Company
TORONTO, August 31, 2006 – Goldcorp Inc. (TSX: G, NYSE: GG) and Glamis Gold
Ltd. (TSX: GLG, NYSE: GLG) announced today that they have agreed to combine in a
US$21.3 billion transaction to create one of the world’s largest gold mining companies.
The new company will continue under the name Goldcorp Inc.
Under the terms of the transaction, which is structured as a Plan of Arrangement,
Glamis’ common shareholders will exchange each Glamis share for 1.69 common
shares of Goldcorp, representing a value of US$51.49 per share based upon the closing
price of Goldcorp on August 30, 2006. This represents a premium of 32.7% to the
closing price of Glamis’ shares on the TSX on August 30, 2006 and 34.8% to the 20 day
volume weighted average trading price of Glamis’ shares on the TSX.
The new Goldcorp will have the following attributes:
• Best production growth profile among major gold companies;
• Proven and probable reserves of approximately 41.1 million gold ounces;
• Resource base of approximately 14.0 million gold ounces of measured and
indicated resources plus inferred resources of approximately 30.9 million gold
ounces;
• Lowest cost senior producer;
• Focused operations and growth projects in the Americas with approximately 11,000
employees;
• Strong balance sheet and robust cash flow to finance growth; and
• All gold reserves and production unhedged.
Ian Telfer, President and Chief Executive Officer of Goldcorp, said “The combination of
Goldcorp and Glamis will create a world class low-cost gold producer in the Americas
with industry-leading growth from an exciting portfolio of development projects. We
believe that this transaction represents an excellent value proposition to our
shareholders.”
Kevin McArthur, President and Chief Executive Officer of Glamis, added “This
transaction merges the talents of the two top performing gold mining companies over
the past five years. We will leverage this talent to deliver on a very exciting mine-
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building and growth program for the company’s long-term future. This transaction
provides tremendous value to Glamis shareholders.”
Summary of the Transaction
The acquisition of Glamis by Goldcorp is expected to be completed by way of a court
approved Plan of Arrangement whereby each Glamis common share will be exchanged
for 1.69 Goldcorp common shares on a tax-deferred basis for both Canadian and U.S.
shareholders. After completion of the transaction, current Goldcorp shareholders will
own approximately 60% of Goldcorp and current Glamis shareholders will own
approximately 40%. It is expected that the transaction will close in November.
The combination has been approved by the boards of directors of Goldcorp and Glamis
and will be subject, among other things, to the favourable vote of 66 2/3% of the Glamis
common shares voted at a special meeting of shareholders called to approve the
transaction. The board of directors of Glamis has determined that the transaction is in
the best interest of Glamis and that the exchange ratio is fair to the Glamis shareholders
and unanimously recommends that holders of Glamis shares vote in favour of the
transaction. Each of Orion Securities Inc. and J.P. Morgan Securities Inc. have
provided opinions to the board of directors of Glamis that the share exchange ratio is
fair, from a financial point of view, to the holders of common shares of Glamis. Senior
officers and directors of Glamis have agreed to vote in favour of the transaction.
Glamis has agreed to pay a break fee to Goldcorp under certain circumstances of
US$215 million. Glamis has also provided Goldcorp with certain other customary rights,
including a right to match competing offers.
Management Team and Board of Directors
Ian Telfer, President and Chief Executive Officer of Goldcorp, will become Chairman of
the new Goldcorp. Kevin McArthur, President and Chief Executive Officer of Glamis,
will become President and Chief Executive Officer of the new Goldcorp. The new
Goldcorp will continue to be based in Vancouver, British Columbia.
The board of directors of the new Goldcorp will be comprised of 10 members, six from
the board of Goldcorp and four from the board of Glamis.
Advisors and Counsel
Goldcorp’s financial advisors are Merrill Lynch Canada Inc. and CIBC World Markets
Inc. and its strategic advisors are GMP Securities L.P., BMO Capital Markets Inc.,
Canaccord Capital Corporation and Genuity Capital Markets. Goldcorp’s counsel are
Cassels Brock & Blackwell LLP and Dorsey & Whitney LLP. Glamis’ financial advisors
are Orion Securities Inc. and J.P. Morgan Securities Inc. Glamis’ counsel are Osler,
Hoskin & Harcourt LLP, Lang Michener LLP and Neal, Gerber & Eisenberg LLP.
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About Goldcorp
Goldcorp is one of the world’s lowest-cost and fastest growing multi-million ounce gold
producers with operations throughout the Americas and Australia. Gold production in
2006 is expected to be approximately 1.8 million ounces on an annualized basis, at total
cash cost of less than US$100 an ounce. In the second half of 2006, production is
expected to be 950,000 ounces. The company does not hedge its gold production.
About Glamis
Glamis is the premier intermediate gold producer with low cost mines and development
projects in Nevada, Mexico and Central America. Plans call for growth to over 700,000
ounces of gold by 2007. The company remains 100 percent unhedged.
Conference Call
A conference call will be held on August 31, 2006 at 10:00 am (ET) to discuss this
transaction.
To listen to the conference call please dial: Local Access: 416-695-6622 or Toll-Free
Access: 1-877-888-3855. This call is also being webcast and can be accessed at
Goldcorp’s website at: www.goldcorp.com. Investors can also access the webcast at
www.InvestorCalendar.com.
The call will be recorded and can be played back by dialing: Local Access: 416-695-
5275 or Toll-Free Access: 1-888-509-0081 Passcode: 630333
The webcast will be available for replay.
Cautionary Note Regarding Forward-Looking Statements
This press release contains “forward-looking statements”, within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation, concerning the
business, operations and financial performance and condition of each of Goldcorp and Glamis. Forwardlooking
statements include, but are not limited to, statements with respect to the future price of gold, silver
and copper, the estimation of mineral reserves and resources, the realization of mineral reserve
estimates, the timing and amount of estimated future production, costs of production, capital
expenditures, costs and timing of the development of new deposits, success of exploration activities,
permitting time lines, hedging practices, currency exchange rate fluctuations, requirements for additional
capital, government regulation of mining operations, environmental risks, unanticipated reclamation
expenses, timing and possible outcome of pending litigation, title disputes or claims and limitations on
insurance coverage. Generally, these forward-looking statements can be identified by the use of forwardlooking
terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”,
“estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such
words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will
be taken”, “occur” or “be achieved”. Forward-looking statements are subject to known and unknown risks,
uncertainties and other factors that may cause the actual results, level of activity, performance or
achievements of Goldcorp and Glamis, respectively, to be materially different from those expressed or
implied by such forward-looking statements, including but not limited to: risks related to the integration of
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acquisitions; risks related to international operations; risks related to joint venture operations; actual
results of current exploration activities; actual results of current reclamation activities; conclusions of
economic evaluations; changes in project parameters as plans continue to be refined; future prices of
gold, silver and copper; possible variations in ore reserves, grade or recovery rates; failure of plant,
equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the
mining industry; delays in obtaining governmental approvals or financing or in the completion of
development or construction activities, as well as those factors discussed in the section entitled
“Description of the Business – Risk Factors” in Goldcorp’s Annual Information Form for the year ended
December 31, 2005, available on www.sedar.com, and Form 40-F for the year ended December 31, 2005
on file with the United States Securities and Exchange Commission in Washington, D.C., the section
entitled “The Narrative Description of the Business – Risk Factors” in Glamis’ Annual Information Form for
the year ended December 31, 2005, also available on www.sedar.com, and the section entitled “Risk
Factors” in Western Silver Corporation’s Annual Information Form for the year ended September 30,
2005, also available on www.sedar.com. Although Goldcorp and Glamis have attempted to identify
important factors that could cause actual results to differ materially from those contained in forwardlooking
statements, there may be other factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that such statements will prove to be accurate, as actual results
and future events could differ materially from those anticipated in such statements. Accordingly, readers
should not place undue reliance on forward-looking statements. Goldcorp and Glamis do not undertake
to update any forward-looking statements that are incorporated by reference herein, except in accordance
with applicable securities laws.
Cautionary Note Regarding Mineral Reserves and Mineral Resources
Mineral resources which are not mineral reserves do not have demonstrated economic viability. Readers
should refer to the respective annual information forms of Goldcorp and Glamis, each for the year ended
December 31, 2005, the annual information form of Western Silver Corporation for the year ended
September 30, 2005 and other continuous disclosure documents filed by each of Goldcorp and Glamis
since January 1, 2006 and by Western Silver Corporation since October 1, 2005 available at
www.sedar.com, for further information relating to the mineral resources and mineral reserves of
Goldcorp and Glamis, which are subject to the qualifications and notes set forth therein.
Cautionary Note to United States Investors Concerning Estimates of Measured, Indicated and
Inferred Resources
This news release uses the terms “Measured”, “Indicated” and “Inferred” Resources. United States
investors are advised that while such terms are recognized and required by Canadian regulations, the
United States Securities and Exchange Commission does not recognize them. “Inferred Mineral
Resources” have a great amount of uncertainty as to their existence, and as to their economic and legal
feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be
upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not
form the basis of feasibility or other economic studies. United States investors are cautioned not to
assume that all or any part of Measured or Indicated Mineral Resources will ever be converted into
Mineral Reserves. United States investors are also cautioned not to assume that all or any part of
an Inferred Mineral Resource exists, or is economically or legally mineable.
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For further information, please contact:
Melanie Pilon
Director, Investor Relations
Goldcorp Inc.
3400-666 Burrard Street
Vancouver, British Columbia, V6C 2X8
Telephone: 604-696-3024
Fax: (604) 696-3001
E-mail: info@goldcorp.com
website: www.goldcorp.com
Jeff Wilhoit
Director, Investor Relations
Glamis Gold Ltd.
5190 Neil Road, Suite 310
Reno, Nevada
89502
Telephone: 775-827-4600x3102
Fax: 775-827-6992
E-mail: jeffw@glamis.com
Website: www.glamis.com
glamis.com |
