GOLDCORP INC. and Exeter Resource Corporation are pleased to announce that they have entered into a definitive arrangement agreement pursuant to which Goldcorp has agreed to acquire, by way of a plan of arrangement , all of the issued and outstanding shares of Exeter.
The total consideration offered for all of the outstanding shares of Exeter is approximately $247 million (on a fully diluted basis).
Under the Arrangement, each common share of Exeter will be exchanged for 0.12 of a common share of Goldcorp. Based on the closing price of Goldcorp's common shares on the Toronto Stock Exchange on March 27, 2017, the Arrangement values each Exeter share at $2.58. The consideration received by Exeter shareholders represents a premium of 67% based on Goldcorp's and Exeter's closing prices on the Toronto Stock Exchange on March 27, 2017 and a premium of 60% based on Goldcorp's and Exeter's 20-day volume-weighted average share prices on the Toronto Stock Exchange for the period ending March 27, 2017.
The number of Goldcorp shares to be issued under the Arrangement will be approximately 10.6 million based on the issued and outstanding shares of Exeter as of the announcement date, but will be subject to adjustment depending on the number of Exeter options that may be exercised prior to the completion of the Arrangement. As part of the Arrangement, all Exeter stock options that are outstanding will be exercisable for Goldcorp shares based on the share exchange ratio for the remainder of their original term.
Exeter's primary asset is the 100%-owned Caspiche project ("Caspiche") located in the Maricunga mineral belt in Chile, approximately 10 kilometers to the north of the Cerro Casale project. Caspiche is a gold-copper porphyry system with an oxide gold zone on surface and a high-grade gold-copper core, which has the potential to be developed as a high tonnage, long life mining operation. Caspiche has the following mineral resources1:
"The Caspiche project is located in the heart of Chile's northern mining district," said David Garofalo, President and Chief Executive Officer. "With the acquisition of Caspiche and 50% of Cerro Casale, we envisage the two deposits being jointly advanced with Barrick, similar to our existing arrangement with Teck Resources at NuevaUnión. This joint venture structure with Barrick has the potential to allow us to consolidate infrastructure to reduce costs, reduce the environmental footprint and provide increased returns compared to two standalone projects. With our combined technical and financial strength, we see significant potential to increase net asset value per share and deliver value for all partners and stakeholders."
The Arrangement has been unanimously approved by the boards of directors of Goldcorp and Exeter and will be subject to, among other things, the favourable vote of 66 2/3% of the holders of Exeter shares at a special meeting of Exeter shareholders to be held no later than May 31, 2017, receipt of all necessary regulatory and court approvals and the satisfaction of certain other closing conditions customary for a transaction of this nature. The Exeter and Cerro Casale transactions are not conditional on the completion of the other.
The Arrangement Agreement includes customary deal protection provisions. Exeter has agreed not to solicit any alternative transactions and, in certain circumstances, to pay Goldcorp a termination fee equal to $8.65 million in the event that the Arrangement is not completed. Exeter has also provided Goldcorp with certain other customary rights, including a right to match competing offers. Closing of the transaction is expected to occur no later than June 30, 2017.
All of the directors and officers of Exeter, representing approximately 8.4% of Exeter's outstanding shares have entered into voting support arrangements with Goldcorp under which they have agreed to vote in favour of the Arrangement. Scotiabank and Paradigm Capital Inc., have provided opinions to the Exeter Board of Directors and the special committee of independent directors of Exeter, respectively, that as of the date of such opinions and subject to the assumptions, limitations, and qualifications stated in such opinions, the consideration to be received by the Exeter shareholders under the transaction is fair, from a financial point of view, to the Exeter shareholders (other than Goldcorp and its affiliates).
Advisors and Counsel
Goldcorp's financial advisor is TD Securities and its legal advisors are Cassels Brock & Blackwell LLP in Canada, Neal, Gerber & Eisenberg LLP in the United States and Cariola Díez Pérez-Cotapos in Chile.
Exeter shareholders and other interested parties are advised to read the materials relating to the proposed transaction that will be filed by Exeter with securities regulatory authorities in Canada when they become available because they will contain important information. Anyone may obtain copies of these documents when available free of charge at the Canadian Securities Administrators' website at www.sedar.com and on EDGAR at www.sec.gov. This announcement is for informational purposes only and does not constitute an offer to purchase, a solicitation of an offer to sell the shares or a solicitation of a proxy.
None of the securities to be issued pursuant to the Arrangement Agreement have been or will be registered under the United State Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and any securities issued in the Arrangement are anticipated to be issued in reliance upon available exemptions from such registration requirements pursuant to Section 3(a)(10) of the U.S. Securities Act and applicable exemptions under state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.
The scientific and technical information contained in this news release has been reviewed and approved by Gil Lawson, P.Eng., Vice President of Geology and Mine Planning, Goldcorp, who is a qualified person under National Instrument 43-101 ("NI 43-101").
Goldcorp is a senior gold producer focused on responsible mining practices with safe, low-cost production from a high-quality portfolio of mines.
1 The mineral resource estimate for Caspiche has been derived from Exeter's technical report entitled "Amended NI 43-101 Technical Report on the Caspiche Project" dated December 19, 2014, a copy of which is available on Exeter's website at (figures have been rounded):