Goldcorp Inc. (GG) has agreed to buy 7,320,200 common shares of Probe Mines Ltd. and 2,347,951 warrants to acquire common shares of Probe from Agnico Eagle Mines Ltd. (AEM).
The deal values each Probe share at C$5.00 and C$2.90 per warrant for a total purchase price of around C$43 million. Each warrant is exercisable to buy a common share of Probe at a price of C$2.10 until May 28, 2015. The transaction is anticipated to be completed on or by Jan 28, 2015.
Currently, Goldcorp possesses 8.4 million of Probe shares, accounting for 9.3% of the basic shares outstanding. Following the addition of shares and warrants from Agnico Eagle, Goldcorp will own 15,720,200 Probe shares and 2,347,951 warrants. With this acquisition, Goldcorp will have beneficial ownership of 18,068,151 Probe shares or 19.9% ownership in Probe on a partially-diluted basis.
Goldcorp, which is among the prominent gold mining companies along with Barrick Gold (ABX) and Newmont (NEM), plans to vote all the acquired shares and any additional shares purchased on the exercise of the warrants in favor of a resolution clearing the Plan of Arrangement through which it proposes to buy all of Probe’s outstanding shares. Once this arrangement gets the approval of Probe shareholders and necessary court clearances, Goldcorp will gain 100% ownership in Probe.
As per the arrangement, each Probe share that is not owned by Goldcorp will be exchanged for 0.1755 common shares of the latter. In addition to the Goldcorp shares, shareholders of Probe will be entitled to an interest in a new exploration company called New Probe. This company will be the owner of Probe's mineral properties in the Ring of Fire in Northern Ontario.
Shareholders of Probe will also receive some other assets currently owned by Probe that would be capitalized with roughly $15 million in cash. Once the deal is closed, Goldcorp will own about 9.3% of New Probe and will support the company in the execution of its business plan.
The arrangement, which has received the approval from the Board of Directors of Goldcorp as well as Probe, is still subject to favorable votes of roughly 66.7% of Probe shares at a special shareholder meeting.
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