Goldcorp Inc. has agreed to buy Andean Resources Ltd. for $3.5 billion. The second largest Canadian gold producer exceeded a rival offer made five hours earlier to gain control of an Argentinean mine. The shares in Andean Resources also rose to Canadian $6.98 on the Toronto stock exchange before a trading halt was announced.
The price rise started on Friday with the bid for Andean Resources being made by another Canadian gold mining company Eldorado Gold. The president and chief executive for Eldorado Gold, Paul Wright said that the company was still keeping its options open.
Eldorado Gold had first put its proposal to Andean Resources on August 18, 2010 but it was informally rejected on August 30, 2010. As per Mr Wright the analysts who were briefing the company believed that the proposal was highly compelling to Andean.
The mine which is causing all this interest in the company is the Cerro Negro project in Argentina. As per Goldcorp CEO Chuck Jeannes the Cerro Negro project is likely to generate significant gold production at a relatively low operating cost. As Andean is not yet a gold producer, it will need help from more experienced miners.