McEwen Capital

McEwen Capital

October 19, 2006 08:00 ET

McEwen Capital-Goldcorp Director: No Vote Required or Even Desirable


TORONTO, ONTARIO--(CCNMatthews - Oct. 19, 2006) - ROB MCEWEN, GOLDCORP'S LARGEST INDIVIDUAL SHAREHOLDER, said today that he is extremely concerned that Goldcorp's Plan of Arrangement with Glamis Gold may be undermining the reputation and integrity of the Canadian securities market, foreign investor confidence, and most importantly shareholder rights.

The Ontario Superior Court will hold a hearing on October 20, 2006 to determine if Goldcorp must give its shareholders a vote as provided for under the Ontario Business Corporations Act (OBCA). The OBCA states that a Corporation in Ontario, such as Goldcorp, must get shareholder approval before completing a fundamental change, such as a Plan of Arrangement.


Peter Dey, director of Goldcorp, states in his affidavit of October 11th that:

"Goldcorp shareholder approval of the acquisition is not required, or even desirable, to protect shareholder interests." - Dey

It is a sad day for the Canadian markets when Mr. Dey, who is considered to be one of Canada's leading corporate governance experts, would claim that a vote is not "even desirable" when a company fundamentally changes itself by entering into an arrangement. Goldcorp will be issuing 67% of its stock that will result in a significant drop in earnings and cash flow, add the uncertainty of a new management team (including CEO), increase its political risk profile, and shift its acquisition strategy to add a large polymetallic deposit that is undeveloped, unpermitted, uncertain and will cost Goldcorp shareholders $1.2 billion to build.

As revealed in Peter Dey's affidavit, Goldcorp director, Michael Stein believes Goldcorp shareholders should have a vote on the proposed deal with Glamis.

"One of my reasons for not supporting the transaction at the time it was approved was my view that it should go to shareholders for approval given the magnitude of the dilution." - Stein Email to Goldcorp Directors, September 27, 2006

"What we have here is not only a difference of opinion, but a difference in how shareholders, the owners of the Company, should be respected. It is striking that two directors, one a corporate governance guru, and the other a successful businessman, can have such different views" said McEwen. "Mr. Stein's approach should be commended."


Goldcorp has refused to provide key documents referred to in Mr. Dey's Affidavit, though, according to Mr. Dey, the Goldcorp Board of Directors relied on these very same documents to make their decision to deny the Goldcorp shareholders a vote.

Today, October 19, 2006, at the Ontario Superior Court, Goldcorp will seek a confidentiality and sealing order that would require these relevant documents be kept secret from Goldcorp shareholders.

"I am very troubled that a public company like Goldcorp is seeking a confidentiality order on documents it is relying on to justify its denial of a shareholder vote," said Mr. McEwen. "I am also dismayed that Goldcorp seems to believe that things are best decided behind a cloak of secrecy, and without any say by the Goldcorp shareholders. I think this demonstrates yet again that Goldcorp's Board of Directors does not understand the level of transparency required in the 21st century."


On August 31, 2006, Goldcorp announced that they were offering $8.6 billion in shares for Glamis. In May 2006, Goldcorp paid $1.6 billion in cash for certain Placer Dome assets. The table below compares the Placer Dome assets with the assets Goldcorp will acquire through the acquisition of Glamis, excluding the Penasquito polymetallic deposit.

Based on the Reserve, Resources and Production numbers, these purchases appear very similar. This begs the question - If Goldcorp paid $1.6 billion for assets that appear similar to Glamis', excluding Penasquito, how much does Goldcorp's management team think Penasquito is worth? It would appear a lot more than the $1.0 billion Glamis paid in February 2006!

Placer Dome Glamis without
Assets Penasquito
Proven & Probable Reserves 10.3 MM oz. 5.7 MM oz.
Measured & Indicated Resources 4.2 MM oz. 9.7 MM oz.
Inferred Resources 4.9 MM oz. 5.2 MM oz.
---------- ----------
Total 19.4 MM oz. 20.6 MM oz.

Annual Gold Production 650,000 oz. 620,000 oz.
Cash Cost of Production $293 oz. $196 oz.
Purchase Price $1.6 Billion ?

Goldcorp is paying a high price for Glamis, and it is evident that Glamis feels the same way, as suggested by Charles A. Jeannes, Glamis' Executive Vice-President as stated in his affidavit filed on October 11, 2006.

"If the Agreement is terminated and the Glamis Board decides to seek another merger or business combination, there is no assurance that it will be able to find a party willing to pay an equivalent value or more than the value to be paid pursuant to the Transaction." - Jeannes


Two important public hearings are scheduled concerning Rob McEwen's application to Ontario Superior Court, Commercial List (File No. 06-CL-6669):

1. Goldcorp Confidentiality Motion, Thursday October 19th at 2:00pm

2. McEwen Compliance Order Hearing, Friday October 20th at 10:00am

Dates and times are subject to change and the location within Toronto has not been determined. For complete up-to-date information, please refer to


Rob McEwen is pleased to announce that he has received Support Forms from 1040 investors, equaling 26,019,126 shares, or approximately 6.2% of Goldcorp's outstanding shares. If your have not yet filled out a Support Form, please visit and Print, Complete, & Fax/Email/Mail it back to McEwen Capital.

Contact Information

  • McEwen Capital Corporation
    Robert R. McEwen, Ian J. Ball or Stefan M. Spears
    Toll Free: 1-866-441-0690 or (647) 258-0395
    (647) 258-0408 (FAX)