Goldcorp Inc. (GG) announced that it has concluded the purchase of 7,320,200 common shares of Probe Mines Ltd. and 2,347,951 warrants to buy common shares of Probe from Agnico Eagle Mines Ltd. (AEM).
The deal valued 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.
After purchasing the shares and warrants, Goldcorp now owns 15,720,200 Probe shares and 2,347,951 warrants. With this acquisition, Goldcorp possesses beneficial ownership of 18,068,151 Probe shares, or 19.4% 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 own 100% of Probe shares.
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 19.4% of New Probe and will support the company in the execution of its business plan.
The arrangement, which has been approved by both Goldcorp and Probe’s board of directors, is still subject to favorable vote of roughly 66.7% of Probe shares at a special shareholder meeting.
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