Goldcorp Inc. said Friday that it has agreed to buy Andean Resources Ltd. for about 3.6 billion Canadian dollars ($3.42 billion) in a deal that would give it access to an Argentinian mining project said to contain a significant amount of gold and silver.
The Canadian gold producer was competing for Andean against rival Eldorado Gold Corp., which submitted a bid in August that was rejected by Andean's board.
Late Thursday, Eldorado said it had made a revised bid that offered Andean shareholders 0.31 shares of its stock for each Andean share, with the total bid valued at about $3.4 billion.
Eldorado said it has yet to hear back from Andean on its new offer.
The Goldcorp offer for Andean has been approved by the boards of both companies but still needs the approval of a majority of Andean's stockholders. The companies hope to complete the deal this year or in early 2011.
If the deal is completed, Goldcorp would get control of Andean's Cerro Negro gold project, which is said to have high-grade gold and silver. The project has indicated resources of 2.54 million ounces of gold and 23.56 million ounces of silver.
"This transaction adds another key asset to Goldcorp's peer-leading growth profile and low-cost gold production pipeline," its president and CEO, Chuck Jeannes, said in a statement.
Jeannes added that the project allows Goldcorp to increase its gold resources by expanding existing deposits and exploring more areas that may have additional deposits.
If the transaction doesn't close, Andean will pay Goldcorp a termination fee equal to 1 percent of the aggregrate total offer made by Goldcorp.
Under terms of the deal, each Andean common share will be exchanged for 0.14 Goldcorp shares or a cash payment in the amount of 6.50 Canadian dollars ($6.17) per share.
The maximum cash consideration will be 1 billion Canadian dollars ($948.6 million).
Shareholders can choose stock, cash or a combination of the two.
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