Goldcorp will use its recently closed $500 million revolver for future acquisitions, said Philip Barnes, executive v.p. and cfo. The Vancouver, British Columbia-based company, which was formed through the $2.2 billion April merger of Goldcorp and Wheaton River Minerals, does not have any immediate takeovers in mind, Barnes noted. But he anticipates production to increase by about 40% over the next two years, with acquisitions fueling that growth.
The company has been built up through acquisitions, with Wheaton making one in 2002, three in 2003 and two in 2004. Those acquisitions helped Wheaton grow its EBITDA from $11 million in 2002 to $230 million in 2004.
Following the merger, the new company and lead banks opened discussions about a new credit facility that would provide better pricing and a larger lending capacity. The old facility was a $75 million revolver set to expire in 2007. The new facility, which closed Aug. 2, is a five-year, $500 million revolver. Pricing ranges from LIBOR plus 62.5 basis points to LIBOR plus 110 basis points, depending upon ratios. Barnes said he anticipates pricing to stay at LIBOR plus 62.5 basis points.
Goldcorp is a Canadian company, but it does all of its transactions in U.S. dollars. "We buy properties in U.S. dollars, we sell in U.S. dollars, a lot of our costs are in U.S. dollars," said Barnes. "For international contracts we sell products in U.S. dollars. That's what we live, think and breathe."
Scotia Capital, Bayerische Hypo-und Vereinsbank, Société Générale, Bank of Montreal and Royal Bank of Scotland are all in this syndicate. Bank of Montreal had not been in the previous deal. "We do a lot of business with them, they helped raise equity in the past," said Barnes, who had worked with the Bank of Montreal, but not in a loan capacity.