Chuck Jeannes

Goldcorp has signed an agreement to acquire all outstanding shares of Probe Mines in a transaction worth C$526m ($439m).

Probe wholly owns the Borden Gold project, which is located near Chapleau in Ontario, about 160km west of Goldcorp’s Porcupine mine.

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Consisting of 70km of contiguous claims in a core district for Goldcorp, the project has reported underground constrained indicated resources of 1.6 million ounces of gold and inferred resources of 0.4 million ounces of gold at a 2.5g/t gold cut-off grade.

Goldcorp president and CEO Chuck Jeannes said: "This transaction is consistent with Goldcorp’s long-standing strategy of securing growth opportunities in and around our existing districts with a focus on low-cost, high-quality gold production.

"Goldcorp is uniquely suited to add Borden to its asset portfolio due to its proximity to our Porcupine operation, which includes the large milling facility at the dome complex.

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"In combination with the recently announced sale of the Wharf mine, this strategic acquisition is the latest example of our commitment to upgrading the quality of Goldcorp’s overall asset portfolio."

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"This strategic acquisition is the latest example of our commitment to upgrading the quality of Goldcorp’s overall asset portfolio."

Under the arrangement, which has been approved by the boards of directors of Goldcorp and Probe, each common share of Probe not owned by Goldcorp will be exchanged for 0.1755 common shares of Goldcorp.

Probe shareholders will also receive an interest in a new exploration company containing Probe’s mineral properties in the Ring of Fire in Northern Ontario, as well as C$15m ($12m) in cash and certain other assets currently held by Probe.

Goldcorp will own around 9.3% in the new company following completion of the transaction, which is expected to close in late March 2015.

Probe has agreed to pay a termination fee equal to C$18.4m ($15m) to Goldcorp in the event that the transaction is not completed.

Image: Goldcorp president and CEO Chuck Jeannes. Photo: courtesy of Goldcorp.