Leagold Mining to acquire Los Filos Mine from Goldcorp

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Neil Woodyer, CEO, reports that Leagold Mining Corp. [LMC.H-TSXV] has agreed to acquire the Los Filos Gold Mine in Guerrero State, Mexico from Goldcorp Inc. [G-TSX; GG-NYSE] for US $350 million, of which US $279 million will be paid in cash and US $71 million in common shares of Leagold. Goldcorp will have the right to nominate a director to Leagold’s board upon completion of the acquisition.

The Los Filos operation consists of two open-pit mines, Los Filos and El Bermejal, an underground mine at Los Filos and the opportunity to develop an underground mine at El Bermejal. Gold is recovered from crushed and run-of-mine ore via a conventional, low-cost heap leach process.

A NI 43-101 independent Technical Report, that will include detailed information on Los Filos and the potential underground mine at El Bermejal, is being prepared by Stantec Consulting International LLC. This report is expected to be filed on SEDAR in late January 2017. This is a preliminary news release regarding this acquisition and Leagold will provide additional information in a comprehensive news release when contents of the 43-101 are available. Leagold advises that its common shares will remain halted from trading on the TSX Venture Exchange until further notice.

Neil Woodyer commented, “The Los Filos Gold Mine represents an exceptional opportunity to acquire a quality operation with scale that generates free cash flow and has an identified future growth project. Los Filos has near-term upside potential from optimizing the current operations under a focused management team and from the development of a new underground mine at El Bermejal. Additionally, there are several exploration opportunities within the area of current operations that could extend mine life. Leagold’s management team has significant experience successfully acquiring gold mines, increasing productivity, lowering costs and optimizing development projects. We look forward to working with the Los Filos team and the local communities to develop the long-term potential of the mine. We are also pleased to be partnering with Goldcorp with a shared vision of Leagold becoming a leading intermediate gold producer in Latin America with a ‘buy & build’ strategy that includes the acquisition of additional gold mines and developing advance-stage projects into operating mines.”

Frank Giustra, Chairman, said, “We are thrilled to have Goldcorp as a strategic partner as we launch Leagold with a tremendous asset. We have a highly-experienced management team that is strengthened by a well-connected Board of Directors giving us the mix of skills and relationships needed to achieve our strategic goals.”

Leagold will undertake debt and equity financings to fund the acquisition and related working capital. Leagold has engaged UBS Investment Bank to arrange the debt financing and BMO Capital Markets to arrange the equity financing. Completion of the acquisition is expected during Q1 2017 and is subject to standard conditions, including the completion of acquisition financing, receipt of Mexican anti-trust approvals, and the approval of the Venture Exchane. As this is an arms-length transaction and, pursuant to TSXV Policy 5.2, Leagold is not required to receive approval from its shareholders. Leagold intends to apply for a sponsorship waiver pursuant to TSX-V Policy 2.2.

The price of the common shares of Leagold to be provided to Goldcorp as part of the consideration for the Acquisition will be equal to the price at which Leagold issues shares under its equity financing and Goldcorp has agreed to hold these shares for a minimum of two years, subject to certain exceptions.

Leagold aims to build a new mid-tier gold producer with a focus on opportunities in Latin America.

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