Gold mining giant Goldcorp Inc. (GG) has announced that one of its subsidiaries has inked an agreement for selling its 100% interest in Wharf Mine at Lead, SD, to Coeur Mining, Inc. (CDE). Goldcorp will receive $105 million in cash from the sale, subject to specific closing adjustments.
Shares of Goldcorp fell roughly 5% yesterday following the announcement to close the day at $20.35.
The divestiture will provide additional value to the shareholders of Goldcorp and help the company to focus only on core assets. The deal, which is anticipated to close by the end of the first quarter of 2015, still awaits U.S. antitrust approval and related closing conditions.
The Wharf mine is situated in the Black Hills mining district in Lead, SD. Expected production capacity for the mine in 2015 is 85,000–90,000 ounces of gold at an all-in sustaining cost ranging between $800 and $875 per gold ounce. The mine is expected to reduce the consolidated unit costs of Coeur and add a consistent source of production to its portfolio.
Thus, the divestiture is beneficial for both the companies. It boosts Goldcorp’s financial profile, adding to its liquidity and, on the other hand, it helps Coeur to achieve its production stability.
Goldcorp is one of the rapidly growing low-cost gold producers in the Americas with 100% of its output unhedged.
Goldcorp currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the gold mining space include Golden Star Resources, Ltd. (GSS) and Rubicon Minerals Corp. (RBY), both carrying a Zacks Rank #2 (Buy).
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