Goldcorp packs on financial muscle

Mid-tier gold producer Goldcorp (G-T) has nearly doubled its cash reserves by selling US$144 million worth of units to a syndicate of underwriters.

The bought deal, led by Griffiths McBurney & Partners, comprises 8 million units priced at US$18 apiece. A unit consists of a share and half a warrant, with a full warrant entitling the holder to buy an additional share within five years of the deal’s closing, at US$25.

The deal is expected to close in late April.

All units will be adjusted to a 2-for-1 stock split, which is awaiting regulatory approval.

The financing boosts Goldcorp’s cash reserves to US$225 million. The company also has US$15 million worth of gold bullion.

Goldcorp operates Canada’s highest-grade gold mine, Red Lake, in northwestern Ontario, as well as the much smaller Warf heap-leach mine in South Dakota. Combined, the two are expected to crank out 570,000 oz. in 2002 at an average cash cost of US$100 per oz.

Goldcorp has 82.5 million shares outstanding, or just shy of 90 million on a fully diluted basis. The shares are trading at around $26.22, but over the past year they have varied between $11.85 and $29.65.