Canada's second-biggest gold-miner, Goldcorp, has sold its 48% stake in silver reseller Silver Wheaton for about C$1,56-billion, providing the company with much-improved financial leg-room as it prepares to build new mines, including the $1,49-billion Penasquito project, in Mexico.

The announcement follows a week of speculation, during which Silver Wheaton shares fell from a close of C$16,89 a share on Monday to C$15,47 a share when they were halted on Thursday afternoon, after Canada's Financial Post reported on Tuesday that Goldcorp was planning to offload its shares.

Silver Wheaton's stock was down a further 3,1% on Friday morning, after trade resumed, at C$14,99 a share, by 9:39 in Toronto.

Goldcorp has appointed a syndicate of underwriters, led by Macquarie Capital Markets Canada, Genuity Capital Markets and GMP Securities, who have agreed to buy 108-million Silver Wheaton shares, at C$14,50 a share.

The gold-miner will raise C$1,56-billion in the sale.

Goldcorp shares rose 2,49% in early Toronto trade on Friday, to C$38,27 a share by 9:52 EST.

FUNDING GROWTH

The company said that the sale was in line with a strategy to simplify its corporate structure and strengthen its balance sheet.

"The proceeds from the transaction provide Goldcorp with the financial flexibility to fund an expected 50% growth in gold production over the next five-year period and will provide financial flexibility for future growth opportunities," the company said.

Goldcorp will spend more than $3,9-billion on new and existing mines over the next five years, not including possible construction of the Pueblo Viejo project in the Dominican Republic (jointly-owned with Barrick Gold) which is still being studied.

The company has mines in Canada, the US, Mexico, Guatamala, Honduras, the Dominican Republic, Argentina and Chile, but more than 50% of the company's production in 2008 will come from Canada, where it is expanding output at its Red Lake mine.

The group's total capital expenditure for this year is estimated at $1,2-billion.

As part of its efforts to simplify its operations, Goldcorp said in December that it had concluded an asset swap with fellow Canadian gold-miner Kinross Gold, in which it received Kinross's 49% share of the Porcupine gold mines, in north-eastern Ontario, and its 32% share of the Musselwhite gold mine, in north-western Ontario.

In exchange, Kinross got Goldcorp's 50% stake in the La Coipa silver/gold mine in Chile and $200-million in cash.

The company said in December that it had increased the planned output of its Penasquito project, in Mexico, by 30 000 t/d of ore, or 30%, but that the expected capital outlay for the mine's construction had leapt by 69%.

Goldcorp now expects to produce the first gold ounces at Penasquito from heap leaching of oxides in 2008, followed by the mill start-up in 2009.

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