Goldcorp to Buy Ontario Mining Company Probe for $440 Million – by Judy McKinnon (Wall Street Journal – January 19, 2015)

Goldcorp Inc. said Monday it has agreed to buy junior mining company Probe Mines Ltd. in a friendly, all-stock deal valued at about 526 million Canadian dollars (US$440 million), expanding the Vancouver company’s presence in one of its core districts in Northern Ontario.

“This transaction is consistent with Goldcorp’s long-standing strategy of securing growth opportunities in and around our existing districts with a focus on low-cost, high-quality gold production,” Chuck Jeannes, Goldcorp’s chief executive, said in a statement.

Toronto-based Probe Mines’ key asset is the Borden Gold project, a deposit minable through conventional underground methods and located west of Goldcorp’s Porcupine mine in Timmins, Ontario.

In an interview last week, Goldcorp Chairman Ian Telfer said the company is constantly looking for mergers and acquisitions. Unlike many other industries, mining companies need to grow through acquisitions because their assets are constantly being depleted and gold mines in particular tend to have shorter lives than other types of mines.

Companies the size of Goldcorp can’t rely on exploration to replace all their assets; larger mining concerns have a patchy record with exploration.

Goldcorp is seen as being the most likely to buy assets among gold-mining majors, given a balance sheet that is comparatively debt free and a share price that has outperformed the sector. Mr. Telfer said last week the company would look for acquisitions outside North America, where 70% of its assets are. South Africa and Australia present opportunities, he said.

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