August 31, 2006

Goldcorp to buy Glamis in $8.6 bln deal

By Mark McSherry

NEW YORK (Reuters) - Vancouver-based Goldcorp Inc. agreed
on Thursday to acquire Glamis Gold Ltd. for about $8.6 billion
in stock to create one of the world's largest gold mining

Glamis's shareholders will receive 1.69 shares of Goldcorp
for each share of Glamis, representing a value of $51.49 per
share based on the closing price of Goldcorp on August 30.

The companies said the merger was "a $21.3 billion
transaction," but according to Reuters data, Glamis has about
166.6 million shares outstanding, giving the proposed deal a
price of about $8.6 billion. Goldcorp was not available to
explain the $21.3 billion figure.

The companies said this represents a premium of 32.7
percent to Glamis's closing share price on August 30.

Goldcorp, North America's number three gold producer before
Thursday's deal, and Glamis, a Reno, Nevada-based mid-tier gold
miner, said the new Goldcorp will have proven and probable
reserves of 41.1 million ounces of gold.

"The combination of Goldcorp and Glamis will create a world
class, low-cost gold producer in the Americas with
industry-leading growth from an exciting portfolio of
development projects," Ian Telfer, president and chief
executive officer of Goldcorp, said in a statement.

Goldcorp has operations throughout the Americas and
Australia. Glamis has gold mines and development projects in
Nevada, Mexico and Central America.


The new company will continue under the name Goldcorp.

After the transaction, expected to close in November,
current Goldcorp shareholders will own 60 percent of the new
Goldcorp and current Glamis shareholders will own 40 percent.

The deal has been approved by the boards of Goldcorp and
Glamis but is subject to approval by 66.6 percent of Glamis
shares voted at a special meeting called to approve the deal.

Glamis has agreed to pay a break fee to Goldcorp under
certain circumstances of $215 million. Glamis has also given
Goldcorp a right to match any competing offers.

Goldcorp CEO Ian Telfer will become chairman of the new
Goldcorp. Kevin McArthur, president and chief executive officer
of Glamis, will become president and CEO of the new Goldcorp.

The board of the new Goldcorp will have 10 members; six
from the board of Goldcorp and four from the board of Glamis.

Goldcorp's financial advisers are Merrill Lynch Canada Inc.
and CIBC World Markets Inc. Glamis's financial advisers are
Orion Securities Inc. and J.P. Morgan Securities Inc.