Goldcorp: 20% Acquisition Stake In Independence Gold

| About: Goldcorp Inc. (GG)
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Summary

Goldcorp Inc. agreed to acquire 20% stake in Independence Gold Corp.

Independence Gold Corp. is a mineral exploration company listed on the TSX Venture Exchange that holds interests in an exploration project in central British Columbia and various projects in Yukon.

As of today any estimate can be made on what this transaction may add to Goldcorp asset base in terms of gold production in the coming years.

"VANCOUVER, June 20, 2016 /CNW/ - GOLDCORP INC.(TSE:G, NYSE:GG) announces that it has entered into an agreement to acquire 10,884,880 common shares ("Shares") of Independence Gold Corp. ("Independence Gold") at a price of C$0.1333 per share for an aggregate purchase price of C$1,450,954.50 (the "Private Placement").

The 10,884,880 Shares represent approximately 19.9% of the current issued and outstanding Shares of Independence Gold."( HERE).

Independence Gold Corp. (OTC:IEGCF) is a mineral exploration company listed on the TSX Venture Exchange. The company has a market capitalization of $CAN 9.10M, about $CAN 1.84 millions in cash & equivalents, total asset of $CAN 17.63M, equity of $CAN 17.33M and 43.81M of total common shares outstanding, as of Q1 2016. The exploration company closed the first quarter of 2016 releasing negative results of net income before extraordinary items and cash flow from operating activities being respectively of $CAN 0.28M and $CAN 0.18M. Capex of 2015 was $CAN 0.05M and Capex of Q1 2016 was negative, $CAN 0.15M.

The company holds interests in an exploration project in central British Columbia and various projects in the Yukon Territory.

BC properties:

BC properties include 3Ts Project (the Tommy and Ted-Mint veins, and the Ringer Target area), located in the Nechako Plateau region of central British Columbia, approximately 120 km southwest of Vanderhoof and 20 km south of the Blackwater Gold Project (New Gold Inc.). It consists of six properties, which are made up of 14 mineral claims covering approximately 4,900 hectares.

The NI 43-101 document estimates inferred resource being 5,452,000 tonnes grading 2.52 grams per tonne (g/t) gold and 71.5 g/t silver, at a cutoff grade of 1 g/t gold, containing 441,000 ounces of gold and 12,540,000 ounces of silver.

Source

Yukon properties:

Boulevard Project, located in the Whitehorse Mining District, approximately 135 kilometers south of Dawson City (Yukon), 35 km south of the Golden Saddle Project (Kinross Gold Corp.) and neighbouring the Coffee Project (Kaminak Gold Corporation). It consists of four properties, which are made up of 888 mineral claims covering approximately 18,500 hectares.

Several explorations activities have been carried on the properties by Independence Gold Corp. from 1969 to 2012, but any estimates have been made on resources.

Rosebute, located in the White Gold Area, Dawson Range, Yukon, approximately 58 km south of Dawson, 29 km north of Kinross Gold's Golden Saddle Deposit (Kinross Gold Corp.), contiguous to the Company's Henderson Project. It consists of a property which is made up of 694 mineral claims covering approximately 14,300 hectares. Multiple drill-ready targets have been defined on the project and will be evaluated during the 2016 exploration season. Henderson property, located in t he White Gold Area, Dawson Range, Yukon, approximately 60 km south of Dawson City, 25 km northeast of the Golden Saddle Deposit (Kinross Gold Corporation). It consists of one property which is made up of 742 mineral claims covering approximately 15,515 hectares.

The White Gold Area Properties:

Source

Keno, a 19 mining leases property that covers 283 hectares and is located in The Keno Hill Silver District, north-central Yukon.

Conclusion: On June 20, 2016 Goldcorp Inc. agreed to acquire 20% stake in Independence Gold Corp., an exploration company that holds interests in an exploration project in central British Columbia and various projects in the Yukon Territory.

Concerning the 3Ts Project, the NI 43-101 document estimates inferred resource being 5,452,000 tonnes grading 2.52 grams per tonne (g/t) gold and 71.5 g/t silver. Be aware that the author did not do sufficient work to classify the historical NI 43-101 compliant estimates as current mineral resources. There are no mineral reserves estimated for the Property at this time.

Bear in mind that a geological or mineral resource is not an economically proven ore body. It has to move up to the reserve category to be considered economically viable. Mineralized rock can only be considered to be ore if it can be mined at profit.

Concerning the other projects, several exploration activities have been carried out, but no resources have been estimated yet, otherwise I would have found NI 43-101 documents on the website of the explorer. Furthermore at Keno the historical resource estimate cannot be relied upon because this was not compiled within the definitions and standards outlined in National Instrument 43-101. Therefore the results cannot be considered as current mineral resources.

Something that is worthy of attention for the average investor is that Independence Gold has identified multiple gold-in-soil anomalies on the Boulevard project.

As of today any estimate can be made on what this transaction may add to Goldcorp Inc. (NYSE:GG) asset base in terms of gold production in the coming years.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.