Goldcorp sells off 26% stake in Tahoe to raise cash
Canadian gold giant Goldcorp (TSX:G) (NYSE:GG) has sold its 26% stake in Tahoe Resources (TSX:THO) (NYSE:TAHO) for just under $1 billion as the miner continues to try increasing cash flow amid weak bullion prices.
The Vancouver-based miner, the world’s largest gold producer by market value, offered 58.1 million common shares of Tahoe for Cdn$17.20 each in a secondary share sale, according to a company statement. Tahoe won’t receive any of the proceeds from the offering, Goldcorp added.
A group of banks led by GMP Securities and Bank of Montreal bought Tahoe shares and will resell them to investors. The transaction is expected to close by June 30.
The news came on the same day Royal Bank of Canada downgraded Goldcorp’s stock to “sector perform” from “outperform,” citing missed guidance and concerns over the miner’s ability to continue paying its monthly dividend.
Reno, Nevada-based Tahoe operates the Escobal silver mine in Guatemala, which it acquired in 2010 from Goldcorp in return for shares and cash, and La Arena gold mine in Peru.