Goldcorp announces offer to acquire Osisko for C$5.95 per share in cash and shares

Goldcorp Inc. today announced it is pursuing a bid to acquire all of the outstanding common shares of Osisko Mining Corporation for approximately C$2.6 billion in cash and shares.

 The $2.6-billion hostile bid by Goldcorp for rival Osisko Mining Corp would boost Goldcorp’s reserves and give it control of one of the biggest gold mines in Canada. The Globe and Mail reported that the bid sent shares of Osisko up 20 per cent to $6.23, higher than Goldcorp’s offer of $5.95 a share, while Goldcorp’s shares dropped 2.5 per cent to $24.62.

Under the terms of the 0ffer, Osisko shareholders will be entitled to receive 0.146 of a Goldcorp common share plus C$2.26 in cash for each Osisko common share. Based on Goldcorp's TSX closing share price of C$25.29 on January 10, 2014, the total consideration offered to Osisko shareholders is C$5.95 per Osisko common share representing a premium of 28% over the 20-day volume-weighted average share price of Osisko from all trading on Canadian exchanges for the period ending January 10, 2014 and a premium of 15% over Osisko's TSX closing share price on January 10, 2014.

"From a financial and strategic perspective, this offer represents a compelling transaction that is consistent with our strategy of improving the overall quality of our portfolio," said Chuck Jeannes, Goldcorp President and Chief Executive Officer.  "Goldcorp shareholders will benefit from a long-lived, high-quality gold mine with low all-in sustaining costs capable of generating long-term free cash flows

The bid to take over Osisko is consistent with Goldcorp’s strategy of disciplined portfolio enhancement, which stresses investment in gold mining in low political risk jurisdictions.  One of the aspects Osisko that interested Goldcorp is Osisko’s large 10 million ounce gold reserve which combined with Goldcorp's financial and technical resources would support a long mine life and low all-in sustaining costs.

The takeover also would provide Goldcorp with immediate free cash flow as it completes the construction and ramp-up of its key growth projects at Cerro Negro, Éléonore and Cochenour over the next eighteen months.

The purchase of Osisko would also Leverage Goldcorp's existing investments in Québec and Ontario with opportunity for corporate and regional synergies.

“We are particularly pleased to be making a further substantial investment in the Province of Québec, one of the best mining jurisdictions in the world,” Jeannes added. “With our world-class Éléonore project in Northern Québec due to commence production later this year, Goldcorp will be the largest gold producer in the province with the resources to continue building collaborative, long-term relationships while leveraging corporate and regional synergies."

The proposed Goldcorp takeover would also be beneficial to Osisko shareholders as it offers a premium of 28 % over the 20-day volume weighted average share price of Osisko and also a premium of 15% over Osisko’s January 10, 2014 closing price.

Osisko shareholders would also be able to own Goldcorp shares and participate in a stake in one of the lowest-cost, highest-growth senior gold producers, and allows Osisko shareholders to participate in Goldcorp's monthly dividend.

According to Goldcorp's announcement its experienced and proven management team will help ensure optimum performance of Canadian Malartic for the benefit of all stakeholders.

 Osisko shareholders will benefit from synergies with Goldcorp's existing investments in Québec and Ontario. Osisko shareholders will benefit from exposure to Goldcorp's diversified portfolio and financial strength.

"This combination offers excellent strategic value as Canadian Malartic and its talented operating team will benefit from Goldcorp's strong financial position, technical expertise and commitments to safety and sustainability," added Mr. Jeannes. "Our clear preference remains to engage with Osisko, as we strongly believe in the compelling strategic and financial merits of this transaction to the mutual benefit of both companies` shareholders."

Goldcorp’s offer will be on the table until 5:00 p.m. EST on February 19, 2014, unless extended or withdrawn.  The Offer will be subject to customary conditions, including the acceptance by Osisko shareholders owning not less than 66 2/3% of Osisko shares outstanding on a fully-diluted basis, confirmation to the satisfaction of Goldcorp that the Osisko shareholder rights plan will not adversely affect the Offer, no material adverse change in Osisko and receipt of all necessary regulatory approvals. The Offer will not require the approval of Goldcorp's shareholders and Goldcorp has obtained a $1.25 billion non-revolving term credit facility from Scotiabank which, together with cash on hand of approximately $620 million and an undrawn $2 billion credit facility, will be sufficient to fund the cash portion of the Offer.

The full details of the Offer will be set out in the takeover bid circular and accompanying documents, which will be filed by Goldcorp with the Canadian provincial securities regulators and will be available for review on Goldcorp's website at www.goldcorp.com and on SEDAR at www.sedar.com.

Goldcorp is one of the world's fastest growing senior gold producers. Its low-cost gold production is located in safe jurisdictions in the Americas and remains 100% unhedged.

Note: Osisko's total proven and probable mineral reserves are as at January 1, 2013 and are estimated at 310.6 million tonnes at 1.01 g Au/t for 10.1 million ounces.  Source: Osisko press release dated February 19, 2013 "Osisko Updates Reserves at Canadian Malartic", available under Osisko's profile at www.sedar.com.