Both gold and its mining namesake began this week by
strutting their stuff.">
Gold rocketed to yet another all-time high (nominal) price above
$1,140 per ounce Monday, while the U.S. dollar flirted dangerously
beneath the 75-handle on the U.S. Dollar Index (USDX).
Meanwhile, the aptly named Goldcorp (NYSE: GG)
continues to frame a future that is far more certain than that of the
besieged and fundamentally impaired dollar. For starters, Goldcorp
announced Monday an all-stock offer for junior exploration company
Canplats Resources. The roughly $225 million transaction targets the
explorer's Camino Rojo project in the vicinity of Goldcorp's world class Penasquito mine.
Goldcorp CEO Chuck Jeannes places the addition of this acreage -- with
3.4 million ounces of measured and indicated gold -- within a broader
vision for the Penasquito district: "Along with the steady advancement
of our Noche Buena project located north of Penasquito, we can envision
a potential network of low-cost satellite operations that would
contribute significantly to Penasquito production over the long term."
As Jeannes points out, focusing pipeline development efforts in
proximity to existing operations can offer important synergies to
miners, and an operation of Penasquito's scale accrues no shortage of
equipment, local expertise, and skilled workers that can significantly
enhance the efficiency of development efforts. Fools will recall that Barrick Gold (NYSE: ABX) is pursuing a 70% stake in the El Morro project near its huge Pascua Lama development project, and will recognize the pattern in Kinross Gold's (NYSE: KGC) offer for a stake in exploration property adjacent to its Fort Knox mine in Alaska. Pan American Silver (Nasdaq: PAAS), for its part, is leveraging its experience in Argentina by targeting Aquiline Resources' sizeable Navidad project.
Sweetening the 41% premium offered to Canplats shareholders,
Goldcorp will also toss 10 million Canadian dollars and some additional
Canplats properties into a new exploration company that it will spin
off from the deal. The progenitor of Silver Wheaton (NYSE: SLW) is hardly a stranger to successful spinoffs, and Goldcorp will keep a 10% slice in case the explorer finds gold.
Finally, Goldcorp moved one step closer to the 22.4 million ounces
of gold buried beneath its Pueblo Viejo joint venture with Barrick
Gold, as the president of the Dominican Republic issued a resounding
statement of support for the project. Although "peak gold" strains the growth prospects for major miners as a group, prompting Foolish interest in the new Market Vectors Junior Gold Miners ETF (NYSE: GDXJ), I believe that Goldcorp possesses the necessary riches to reward shareholders handomely.
© 2009 UCLICK, L.L.C.
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