According to their estimates it would have 41

Canadian gold mine Goldcorp announced Wednesday its intention to acquire his compatriot Glamis Gold, which actively supports the project, for an amount of US $ 8.6 billion.

It is the second largest transaction in the gold sector since the purchase of Placer Dome by Barrick Gold for 10.4 billion in February. If successful, Goldcorp would become the fifth largest producer of yellow metal, thereby overtaking the US Freeport McMoRan.

The two leading teams negotiated the distribution of seats on the Board of Directors, reserving the Presidency to the current pattern of Goldcorp, Ian Telfer, and the Executive of Glamis, Kevin McArthur.

This is not the first time that a reconciliation of the two mining groups is envisaged. There is now a little more than a year, it was Glamis issued a hostile offer on Goldcorp for an amount of $ 2.43 billion.

The relationship between the two companies are more friendly since this last episode. Speaking with one voice yesterday, Kevin McArthur and Ian Telfer said that reconciliation was the result of the attractiveness of the project to increase the production capacity of the new company. According to their estimates, it would have 41.1 million ounces of gold reserves ascertained and probable.

Increase of reserves

The prospects of the new Goldcorp extraction receive in part to the increase in reserves in certain mines held by Glamis like Peñasquito, the Mexico, which has seen estimates of geologists double, from 9,98 million ounces of gold in June. In addition, leaders argue cost cash per ounce of gold extracted knockdown: $ 120 when the two leaders of the sector, Barrick Gold and Newmont Mining, plan costs two times higher in the second quarter.

The reconciliation proposal consists in an exchange of shares: the shareholder of Glamis will receive 1.69 action Goldcorp for each traded title values Glamis 51,49 dollars, or a premium of 32.7 Glamis at the Wednesday close. For its part, Goldcorp will have to seek the support of two thirds of its shareholders at an extraordinary general meeting to ensure the legality of the agreement. Shareholders hold 60 of the capital of the new entity once the operation concluded, what should be done as early as November.

After the last merger project revealed this week between Russian Rusal aluminum giant and Sual, proposals for Goldcorp are in addition to a long list of operations in the mining sector.

All metals combined, the market is particularly promising. In four years, gold prices have doubled, reaching a peak at $ 722,55 an ounce in may he exchanged yesterday to 623,79 dollars. Previously sealed by their production costs, the major gold mines have all announced profits soaring in the first half of 2006, to identify suitable acquisitions "cash". On an annual basis, Glamis profits for the period were tripled while those of Goldcorp increased more than 40.

At the Toronto Stock Exchange, the operators have responded mixed for the merger of two Canadian mines. Goldcorp title dropped more than 9 in session while the Glamis practical 19. Investors fear that Goldcorp among the higher costs of production 2.6 times of Glamis (331 dollars an ounce, against 123 dollars estimated by Goldcorp second quarter).