PERTH (miningweekly.com) – Canada's Goldcorp has agreed to buy ASX- and TSX-listed Andean Resources, the firm said on Friday morning, trumping a bid from smaller rival Eldorado Gold, made public just hours earlier.

Eldorado announced overnight it was taking its C$3,4-billion all-share offer to Andean's shareholders after receiving no response from Andean.

But a short while later, Goldcorp and Andean revealed they had agreed on a friendly transaction, worth C$3,6-billion, made up of cash and shares.

The news sent Andean shares up 44,7%, to C$6,96 apiece by around midday in Toronto. The stock traded as high as C$7,08 earlier in the day.

Goldcorp shares were down 3,33%, at C$44,64 apiece. Eldorado fell 4%, to C$19,70 a share.

Both companies are after Andean's flagship Cerro Negro project gold/silver project in Argentina, which the firm has said will start production in 2012.

Goldcorp's offer has the backing of Andean's board and the company has also got the support of the Australian company's biggest shareholder.

The deal is expected to close late this year or early in 2011, depending on shareholder and regulatory approvals, Goldcorp CEO Chuck Jeannes said on a conference call.

Vancouver-based Goldcorp, the world's second-biggest gold-miner by market value, has been following Andean for about two years, he said.

The company decided to make the offer after Andean recently announced its Mariana Central discovery at Cerro Negro.

Before that, "it just wasn't big enough to interest us", Jeannes said.

But TSX-listed rival Goldcorp was offering Andean shareholders C$3,6-billion in deal that is said had been unanimously approved by the boards at both Goldcorp and Andean, but was still subject to shareholder and regulatory approvals.

Under the terms of Eldorado’s proposed transaction, 0,310 of an Eldorado share would be offered for very Andean ordinary share held – a 61,9% premium to Andean’s 20-day volume weighted average price on the TSX, and valued its shares at around C$6,36 a share.

The transaction, which was subject to shareholder and regulatory approval, would reportedly result in Andean shareholders owning around 24% of the combined entity.

Goldcorp, by contrast, was offering Andean shareholders the option of exchanging their shares for 0,14 common shares, or a cash payment of C$6,50 a share, subject to an aggregate maximum cash consideration of C$1-billion.

Eldorado president and CEO Paul Wright argued that the combination was “compelling”, as it would deliver a low-cost, high-growth company that was “fully exposed” to higher gold prices through unhedged production.

It also represented a “unique” opportunity for Andean to deliver both immediate and long-term value to its shareholders, particularly in the current gold environment.

Jeannes said that the takeover of Andean would add another key asset to the company’s peer-leading growth profile, and low-cost production pipeline.

Jeannes added that this transaction fitted in with Goldcorp’s strategy, its strong financial position, technical expertise and track record of building mines.

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