Business

Wheaton River proposes $2.9 billion merger with Iamgold

Wheaton River Minerals merging with Iamgold Corp in $2.9 billion deal

Shares of Wheaton River Mineral (TSX:WRM)were up more than 8 per cent on Wednesday after the company announced plans to merge with Iamgold Corp (TSX:IMG).

Wheaton River shares were up 36 cents at $4.48 on the TSX, while shares of Iamgold fell 77 cents to $8.58.

The companies said late Thursday their $2.9-billion all-stock deal merger will create a global top-ten gold producer.

Wheaton River shareholders will wind up with 68 per cent of the merged company, which is yet to be named. Iamgold shareholders will own the remainder.

Under the terms of the deal, each Wheaton River share will be exchanged for 0.55 of an Iamgold share.

The new firm will be Canada's number-four gold producer, behind Barrick Gold, Placer Dome and Kinross.

The company will hold interests in seven gold mines in Mali, Ghana, Australia, Mexico, Argentina and Brazil, and have proven and probable reserves of 9 million ounces of gold.

"We believe that the gold industry is about to enter a period of considerable consolidation," Ian Telfer, the chairman and CEO of Wheaton River , said in a release.

"To be the first company out of the blocks, with a strong balance sheet and considerable cash on hand will place our combined company in a pre-eminent position to take advantage of new opportunities," he said.

Shareholders of both companies must still approve the deal at separate meetings expected to be held in June.