Goldcorp buying Yukon-focused Kaminak Gold in $520 million all-share deal

VANCOUVER – Goldcorp Inc. says it’s taking over junior explorer Kaminak Gold Corp. in a $520 million all-share deal.

The acquisition gives Goldcorp control of the Coffee gold project in Yukon, which hasprobable reserves of 2.2 million ounces of gold as well as exploration potential on 60,000 hectares of land holdings in the region.

Yukon attracted hundreds of millions of dollars in investment at the height of the recent commodity boom as investors saw potential for a second gold rush in the territory.

Those expectations faded along with the price of gold, but Goldcorp (TSX:G) chief executive David Garofalo said in a statement that the stable jurisdiction provides significant potential to add value to the company.

The Vancouver-based miner will be issuing 0.10896 of a Goldcorp share for each Kaminak share — a 40 per cent premium to Kaminak’s 20-day average price.

The deal comes as the price of gold has climbed about 20 per cent this year to close at US$1,275.50 on Wednesday, while Goldcorp swung to a US$80-million profit in the first quarter.