Hey, maybe we'll get a bidding war between IAG and CDE for our little 'ole WHT.
Still not much of a premium IMO, almost an insult.
And I'd still rather go it alone. Either one of them as a parent company would be a drag on profits, IMO.
(PR NEWSWIRE) Coeur Proposes to Acquire Wheaton River in a Stock and Cash Transaction Valued a
US$3.28 (C$4.50) Per Share
Total Transaction Value of Approximately US$1.8 (C$2.5) Billion
Transaction Creates 4th Largest North American Precious Metals Company
World's Largest Primary Silver Producer Increases Silver Production by 45%
Creates Top 10 Global Gold Producer
COEUR D'ALENE, Idaho, May 27 /PRNewswire-FirstCall/ -- Coeur d'Alene Mines
Corporation (NYSE: CDE) today announced that it has proposed to acquire
Wheaton River Minerals Ltd. (TSX: WRM; Amex: WHT) in a stock and cash
transaction valued at US$3.28 (C$4.50) per Wheaton River share, or a total
transaction value of approximately US$1.8 (C$2.5) billion (including US$1.9
(C$2.6) billion in equity and US$133 (C$182) million in assumed debt less
US$174 (C$238) million of cash), based upon Coeur's closing stock price on May
27, 2004. The proposal was made in a letter sent today by Dennis E. Wheeler,
Chairman and Chief Executive Officer of Coeur, to Ian Telfer, Chairman and
Chief Executive Officer of Wheaton River. Coeur's proposal represents a
premium of 14% to Wheaton River's closing stock price on May 27, 2004, and a
premium of 25% over Wheaton River's 20-day average.
The transaction is subject to lawful termination of the existing agreement
between Wheaton River and IAMGOLD Corporation (TSX: IMG; Amex: IAG).
Dennis E. Wheeler, Chairman and Chief Executive Officer of Coeur, said,
"The combination of Coeur and Wheaton River is truly compelling and provides
superior value to both Wheaton River and Coeur shareholders. Our combination
creates the fourth largest North American precious metals company, increases
Coeur's primary silver production by 45%, and creates a top 10 global gold
producer with among the lowest cash costs of production in the industry. The
combined company, a totally unhedged precious metals producer, will have
superior financial strength and flexibility and will provide shareholders with
leading market liquidity. This transaction would be accretive for Coeur on
all key metrics including net asset value, cash flow and earnings per share
without any consideration of synergies.
"We have the greatest respect for Ian Telfer and his management team and
we are impressed with what Wheaton River has created in a very short time. We
think Wheaton River's assets are an excellent fit with ours and should lead to
significant synergies. We look forward to combining Wheaton River's assets,
including its strong South American and Luismin Mexican silver operations,
with Coeur's valuable operations. The combined company would have a
fully-funded, superior, organic development project pipeline. Coeur's
management team, with combined operating experience of 300 years, looks
forward to working closely with Wheaton River's management team to achieve a
transaction that is in the best interests of both companies' shareholders,"
concluded Mr. Wheeler.
Attached is the complete text of the May 27, 2004 letter from Mr. Wheeler
to Mr. Telfer:
"May 27, 2004
Mr. Ian Telfer
Chairman & CEO
Wheaton River Minerals Ltd.
200 Burrard Street, Suite 1560
Vancouver, BC
V6C 3L6, Canada
Dear Ian:
On behalf of Coeur d'Alene Mines Corporation, I am pleased to submit a
firm offer for the combination of Wheaton River Minerals and Coeur. In
the combination, holders of Wheaton River common shares will receive for
each Wheaton River share, total consideration of C$4.50 per share.
Wheaton River shareholders will have the opportunity to elect among:
-- C$4.50 per Wheaton River share in cash, subject to a maximum; or
-- Coeur common shares or exchangeable shares of a Canadian subsidiary
of Coeur (with value equivalent to Coeur common stock) at the
exchange ratio ("Exchange Ratio") of 0.649 Coeur common shares per
Wheaton River common share with a value of C$4.50 per Wheaton River
share based on closing share prices as at May 27, 2004.
The maximum cash consideration will be C$205 million, or C$0.50 per
Wheaton River share if all Wheaton River shareholders elect the cash
option. Under the offer, warrant and option holders of Wheaton River will
receive an equivalent value of Coeur warrants and options based on the
Exchange Ratio.
Coeur is prepared to enter into an arrangement agreement setting forth the
detailed terms and provisions of the transaction, in form and substance
substantially the same as the existing Amended and Restated Arrangement
Agreement between Wheaton River and IAMGOLD Corporation dated as of April
23, 2004. Our offer is not conditional on obtaining financing or
additional due diligence. Neither is it conditioned, in any way, on the
outcome of Golden Star's recent proposal to acquire IAMGOLD.
I believe the offer made hereby is clearly superior to the previously
announced IAMGOLD transaction. Based on stock closing prices on May 27,
2004, the Coeur offer will provide Wheaton River stockholders a total
value, per Wheaton River share, of C$4.50, a C$0.45 premium over the value
of the IAMGOLD transaction. The Coeur offer is superior based on key
measures of comparison in addition to price, as shown by the following:
Coeur Offer IAMGOLD Offer Superior
Proposal
0.649 Exchange + Cash 0.55 Exchange
1. Value of Offer
May 27, 2004 C$4.50 C$4.06 Coeur
March 30, 2004 C$5.86 C$5.14 Coeur
2. Cash in Offer per Share C$0.50 (C$205mm) Nil Coeur
3. Operating Expertise 70 years Nil Coeur
4. Trading & Liquidity
Liquidity $75 mm/day $45 mm/day Coeur
Pro-Forma Exchange NYSE/TSX TSX/AMEX Coeur
5. Growth Projects
Projects
Contributed 2 Projects + 2 Expansion 1 Expansion - 19% Coeur
- Wholly Owned minority interest
6. Profile
Silver Production World's Largest Primary 6.5 mm ozs Coeur
Silver Co.
Gold Production Top 10 Gold Producer Top 10 Gold Producer -
Cash Costs Cash Costs Below $125/oz Cash Costs Below -
$125/oz
7. Reserves & Resources
Reserves 9 mm ozs 9 mm ozs -
Reserves + Resources 21 mm ozs 24 mm ozs -
I would point out, in addition, that based on stock values at March 30,
2004 - the comparison standard for determining a "Superior Offer", as
defined in the Wheaton River-IAMGOLD agreement, the value of Coeur's offer
was C$5.86 per Wheaton River share, more than 9% above the C$5.40
threshold set forth in the agreement.
We are confident that the transaction will be welcomed by Coeur
shareholders as well. A combination with Wheaton River will maintain
Coeur's strong balance sheet, maintain the combined company as the world's
largest primary silver producer, and build value for shareholders as a
strong, low cost, international mining entity. The combination will
provide financial strength and flexibility, as well as significant market
liquidity. The combined company will be North America's fourth largest
precious metals company by market capitalization, generating approximately
$200 million annually in cash flow and nearly $100 million annually in
earnings. The combined company will produce over 22 million ounces of
silver, have nearly 9 million ounces of gold equivalent reserves, and 21
million ounces of total resources - a leading position among our peers.
I want to be very clear that this is a friendly offer. We would welcome
the participation of Wheaton directors on the board of the combined
company. Coeur understands that Wheaton River has certain obligations
under the Wheaton River-IAMGOLD agreement. At the same time, your
directors' fiduciary obligations provide ample authority to inform your
shareholders of our offer in order that they may receive the benefit of a
clearly superior transaction. Coeur understands that a break fee may be
payable if Coeur combines with Wheaton River. If that occurs, Coeur
expects that Wheaton River will pay the break fee. Also, if both the
Coeur-Wheaton River combination and the Golden Star-IAMGOLD combination
occurs, there may be mutual break fees payable. For your information,
Coeur and Golden Star have agreed that the net amount of the two break
fees will be paid. As soon as you are in a position to do so, we are
fully prepared to respond to any questions you may have and we are
prepared to execute a legally binding arrangement agreement for the Coeur
transaction.
We are separately sending a complete form of agreement which we are
prepared to enter into with Wheaton River.
Ian, we hope and expect that our proposal will move forward expeditiously
in a constructive manner that will serve the interests of all
stockholders. I look forward to your prompt response.
Very truly yours,
/s/ Dennis E. Wheeler
Dennis E. Wheeler
Chairman and Chief Executive Officer
Coeur d'Alene Mines Corporation"
Coeur's offer is also not conditional upon obtaining financing or due
diligence. Consummation of this proposed transaction will be subject to
entering into of a definitive agreement satisfactory to Coeur in a form
substantially similar to the existing arrangement agreement between Wheaton
River and IAMGOLD, and customary closing conditions including the absence of
any material adverse change and receipt of all applicable regulatory,
shareholder and court approvals.
The Company noted that it understands that simultaneous with its offer for
Wheaton River, Golden Star Resources Ltd. (TSX: GSC; Amex: GSS) has announced
that it has proposed a business combination with IAMGOLD Corporation. The
Company noted that its offer for Wheaton River is not conditional upon Golden
Star's transaction with IAMGOLD.
CIBC World Markets Inc. is acting as financial advisor to Coeur. Gibson,
Dunn & Crutcher LLP and Stikeman Elliott LLP are acting as legal counsel to
Coeur.
Figures presented in this release are based upon approximate current
exchange rates for US and Canadian currency. The exchange rates may vary
before consummation of a transaction.
Coeur d'Alene Mines Corporation is the world's largest primary silver
producer, as well as a significant, low-cost producer of gold. The Company has
mining interests in Nevada, Idaho, Alaska, Argentina, Chile and Bolivia.
Cautionary Statement
The United States Securities and Exchange Commission permits mining
companies, in their filings with the SEC, to disclose only those mineral
deposits that a company can economically and legally extract or produce. We
use the term "resource" in this press release which the SEC guidelines
strictly prohibit us from including in our filings with the SEC. Investors are
urged to consider closely the disclosure in our Form 10-K for the year ended
December 31, 2003 and Form 10-Q for the quarter ended March 31, 2004. You can
review and obtain copies of that filing from the SEC website at
sec.gov.
This document contains numerous forward-looking statements relating to the
Company's silver and gold mining business. The United States Private
Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain
forward-looking statements. Such forward-looking statements include the
statements above as to the impact of the proposed acquisition on both the
combined entity and the Company's shareholders. Such statements are subject
to numerous assumptions and uncertainties, many of which are outside the
Company's control. These include negotiation and completion of a formal
transaction agreement, governmental regulatory processes, the Company's
ability to successfully integrate the operations of Wheaton River, assumptions
with respect to future revenues, expected mining program performance and cash
flows and the outcome of contingencies. Operating, exploration and financial
data, and other statements in this document are based on information the
company believes reasonable, but involve significant uncertainties as to
future gold and silver prices, costs, ore grades, estimation of gold and
silver reserves, mining and processing conditions, the completion and/or
updating of mining feasibility studies, changes that could result from the
Company's future acquisition of new mining properties or businesses, the risks
and hazards inherent in the mining business (including environmental hazards,
industrial accidents, weather or geologically related conditions), regulatory
and permitting matters, risks inherent in the ownership and operation of, or
investment in, mining properties or businesses in foreign countries, as well
as other uncertainties and risk factors set out in the Company's filings from
time to time with the SEC, including, without limitation, the Company's
reports on Form 10-K and Form 10-Q. Actual results and timetables could vary
significantly from the estimates presented. Readers are cautioned not to put
undue reliance on forward-looking statements. The Company disclaims any intent
or obligation to update publicly these forward-looking statements, whether as
a result of new information, future events or otherwise.
This communication is neither an offer to purchase nor a solicitation of
an offer to sell shares of Wheaton River or Coeur. This communication is not
a solicitation of a proxy from any security holder of Coeur d'Alene Mines
Corporation or Wheaton River Minerals Ltd. If a transaction is agreed upon or
an offer commenced, Coeur will file a proxy statement/prospectus and any other
relevant documents concerning the proposed transaction with Wheaton River with
the SEC and the securities commissions or equivalent regulatory authorities in
Canada. YOU ARE URGED TO READ ANY SUCH PROXY STATEMENT/PROSPECTUS IF AND WHEN
IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS IF AND WHEN FILED WITH
THE SEC AND THE SECURITIES COMMISSIONS OR EQUIVALENT REGULATORY AUTHORITIES IN
CANADA BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. You will be able to
obtain any such proxy statement/prospectus (if and when it becomes available)
and any other documents filed with the SEC free of charge at the SEC's
website, sec.gov. In addition, you may obtain the proxy
statement/prospectus (if and when it becomes available) and the other
documents filed by Coeur with the SEC by requesting them in writing from, 400
Coeur d'Alene Mines Building, 505 Front Avenue, Coeur d'Alene, Idaho 83814,
Attn: Investor Relations, tel: (208) 667-3511.
Public Teleconference:
Coeur will hold a conference call tomorrow, May 28, 2004 at 9:15 a.m. EDT
to discuss its proposal for Wheaton River. To access the conference call,
listeners calling from within North America should dial (888) 796-2701 at
least 10 minutes prior to the start of the conference. Those wishing to
access the call from outside North America should dial (706) 679-5633.
A slide presentation and webcast of the conference call will be available
at coeur.com .
Contacts: James A. Sabala
Chief Financial Officer
208-769-8152
Mitchell J. Krebs
Vice President Of Corporate Development
773-388-2902
Joele Frank / Jennifer Felber
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449
SOURCE Coeur d'Alene Mines Corporation
-0- 05/27/2004
/CONTACT: James A. Sabala, Chief Financial Officer, +1-208-769-8152, or
Mitchell J. Krebs, Vice President of Corporate Development, +1-773-388-2902,
both of Coeur d'Alene Mines Corporation; or Joele Frank or Jennifer Felber,
both of Joele Frank, Wilkinson Brimmer Katcher, +1-212-355-4449, for Coeur
d'Alene Mines Corporation /
/Web site: coeur.com /
(CDE WHT IAG GSS WRM. IMG. GSC.)
CO: Coeur d'Alene Mines Corporation
ST: Idaho
IN: MNG
SU: TNM CCA
*** end of story ***
IAG/WHT agreement reference post
Message 20062535 |
