July 31, 2008


    Publisher: Stockwatch
    Author: Mr. Kevin McArthur of Goldcorp

Mr. Kevin McArthur of Goldcorp reports


Goldcorp Inc. (TSX: G) and Gold Eagle Mines Ltd. (TSX: GEA) have signed an agreement whereby Goldcorp will acquire, through a friendly plan of arrangement, all outstanding shares of Gold Eagle.

Gold Eagle's principal asset is the world-class Bruce Channel gold discovery which is situated along the prolific Red Lake trend, adjacent to Goldcorp's Red Lake gold mine and immediately southwest of Goldcorp's past-producing Cochenour-Willans mine. This transaction will enable Goldcorp to capitalize on its extensive exploration and operations expertise in the Red Lake district and its considerable human resources and related infrastructure.

"This transaction secures for Goldcorp full control of eight kilometres of strike length in the heart of the world's richest high-grade gold district," said Kevin McArthur, Goldcorp's president and chief executive officer. "Nearly 200 drill holes have defined an impressive gold deposit at Bruce Channel, with potential for additional expansion over time. Development of this strategically important zone can now move forward with our adjoining assets as a single, comprehensive project, sharing mine infrastructure, ore processing facilities and human talent with Red Lake, thus minimizing capital and operating costs and maximizing long-term shareholder value. Red Lake mine has operated for over 50 years, and Goldcorp's continued district consolidation efforts are designed to sustain this world-class operation for decades into the future. We are the natural partner to develop the Bruce Channel project with the geographic footprint preferred by our community."

Under the plan of arrangement, each common share of Gold Eagle not owned by Goldcorp will be exchanged for (i) a cash payment in the amount of $6.80 and (ii) 0.146 common shares of Goldcorp, assuming full proration. Gold Eagle shareholders will have the option to elect to receive cash (on the basis of $13.60 per Gold Eagle share), shares (on the basis of 0.292 Goldcorp share and 0.01 cent per Gold Eagle share) or any combination of cash and shares, subject to proration, with a total maximum cash consideration of $691-million and a total maximum of 14.8 million common shares of Goldcorp subject to increase on a prorated basis if Gold Eagle warrants and options are exercised prior to the effective date of the arrangement. The total consideration for 100 per cent of the fully diluted shares of Gold Eagle would be approximately $1.5-billion.

Based on the July 30, 2008, closing price and 20-day volume weighted average price for Goldcorp's common shares on the Toronto Stock Exchange, and assuming full proration, the transaction values each Gold Eagle share at $12.62 and $13.39, respectively. On this basis, the consideration received by Gold Eagle shareholders represents a 19-per-cent premium to closing prices and a 36-per-cent premium to the 20-day volume-weighted average prices for each company. The transaction is expected to close in September, 2008.

The combination has been approved by the boards of directors of Goldcorp and Gold Eagle and will be subject, among other things, to the favourable vote of 66-2/3 per cent of the Gold Eagle common shares voted at a special meeting of shareholders called to approve the transaction. Officers, directors and certain shareholders of Gold Eagle representing approximately 10.5 per cent of Gold Eagle's outstanding shares have entered into lock-up and support arrangements with Goldcorp under which they have agreed to vote in favour of the transaction. Goldcorp currently owns 4.7 per cent of the outstanding shares of Gold Eagle. BMO Capital Markets, Gold Eagle's financial adviser, has provided an opinion to the Gold Eagle board of directors that the consideration offered is fair, from a financial point of view, to Gold Eagle's shareholders. In the event that the transaction is not completed, Gold Eagle has agreed to pay Goldcorp a termination fee equal to $44-million, under certain circumstances. Gold Eagle has also provided Goldcorp with certain other customary rights, including a right to match competing offers. Full details of the transaction will be included in the management information circular of Gold Eagle, to be mailed to Gold Eagle shareholders in due course.

"We believe that Bruce Channel ranks among the very highest quality gold discoveries," said Simon Lawrence, president and chief executive officer of Gold Eagle. "The success we have had is a testament to our Red Lake-based exploration team and their endeavours have helped deliver significant value to our shareholders. Goldcorp, with their considerable infrastructure and expertise in the area, are ideally positioned to advance the project in an expedient and capital efficient manner. For our shareholders this is a very attractive transaction."

Macquarie Capital Markets Canada Ltd. acted as financial adviser to Goldcorp Inc. and J.P. Morgan Securities Inc. acted as strategic adviser. Cassels Brock & Blackwell LLP acted as Goldcorp's legal counsel.

BMO Capital Markets acted as financial adviser to Gold Eagle and Fraser Milner Casgrain LLP acted as Gold Eagle's legal counsel.

Goldcorp will hold a conference call today at 10 a.m. (PDT) to discuss its second quarter financial results as well as the details of the Gold Eagle acquisition. Participants may join the call by dialling toll-free 1-866-226-1799 or 416-641-6129 for calls from outside Canada and the United States. A recorded playback of the call can be accessed after the event until Sept. 1, 2008, by dialling 1-800-408-3053 or 416-695-5800 for calls outside Canada and the U.S. The passcode is 3264804. A live and archived audio webcast will also be available at the company's website.

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