Goldcorp Inc. GG has announced the closing of secondary offering of the shares in Tahoe Resources Inc. The company has closed secondary offering of 58,051,692 common shares of Tahoe, on a bought-deal basis, at a price of C$17.20 per share for gross proceeds of roughly C$1 billion. Tahoe did not receive any of the proceeds from the offering.
With this offering, Goldcorp has sold its entire stake in Tahoe that owns and operates the Escobal silver project in Guatemala. This move is in sync with Goldcorp’s strategy of disposing non-strategic assets and maintaining a sound financial position. The company is expected to witness improvement in free cash flow and obtain financial flexibility.
Goldcorp’s shares closed roughly 1% lower at $16.20 on Tuesday.
Recently, Goldcorp announced that it has raised its credit facility to $3 billion from $2 billion. The term for the facility has also been extended to Jun 10, 2020, under current terms and conditions. The company plans to use the facility for liquidity and general corporate purposes.
The facility bears interest at LIBOR plus 120 points when drawn, based on Goldcorp's existing BBB+ rating. BMO Capital Markets served as co-lead arranger, joint bookrunner and administrative agent, while Canadian Imperial Bank of Commerce and The Bank of Nova Scotia were co-lead arrangers, joint bookrunners and syndication agents.
Goldcorp, which is among the prominent gold mining companies along with Barrick Gold Corp. ABX, Newmont NEM and Kinross KGC, is progressing well with its development projects and remains on track to attain its production targets. It is alo focused on reducing costs. However, the company faces risks associated with weak gold prices and geopolitical challenges.
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