September 12, 2006 – www.rightsaction.org

MINING MERGERS and ACQUISITIONS; IMPUNITY & IMMUNITY FROM ACCOUNTABILITY

Below, you will find news articles about pending mergers and acquisitions in
the mining industry:

-1- Goldcorp is set to buy Glamis Gold [with open pit, cyanide operations
in Guatemala and Honduras ... and beyond]
-2- Various companies look to purchase Skye Resources [hoping to kick-start
nickel mining in Guatemala that was abandoned by INCO over 20 years ago]

RIGHTS ACTION COMMENTARY:

Over the past few years, Rights Action – with other North and Central
American organizations – has been supporting local communities resisting the
multiple harms (enviro-destruction; undermining of locally controlled
development; repression against people opposing mining; violations of the
rights to health, water and control over one’s property and resources; etc.)
caused by the mining operations of Glamis Gold and Skye Resources [formerly
and still partially INCO nickel company].

On request, we can provide documentation of the harms and violations caused
by Glamis Gold and Skye Resources.

Naturally, Rights Action has also supported political and legal efforts to
try and find some way to end the legal immunity from prosecution and
impunity with which these companies operate.

It is a sad and telling sign of how little progress we are making in our
work for global equality and justice, that in the news articles below
discussing the mergers and acquisitions, there is no mention whatsoever of
the well-documented enviro-harms and human rights violations associated with
these companies; for the media, companies, investors and shareholders, the
only issues worth commentary are financial.

CANADIAN ROUND-TABLE DISCUSSIONS ON MINING

It is a sad and telling sign of how little real progress we are making in
our work for global equality and justice, that a series of “roundtable”
discussions are taking place in Canada – with participation from the mining
industry, the Canadian government and civil society – concerning ‘if and
how’ to regulate the global mining industry, even as devastating harms and
violations caused by the mining industry are so widely documented.

For any person or country that claims to believe in democracy, the rule of
law and justice, it is shameful that in 2006 we are discussing ‘whether or
not’ to have a minimal set of enforceable civil and criminal legislation in
Canada [or the USA for that matter] to hold North American mining companies,
investors and shareholders, accountable for enviro-destruction and human
rights violations caused by their operations around the world.

At a bare minimum, Canada and the U.S. should enact strong civil and
criminal legislation so as to end the immunity from prosecution and impunity
with which North American companies operate.

THE EMPEROR HAS NO CLOTHES: THE GLOBAL “DEVELOPMENT” MODEL IS UNJUST AND
UNEQUAL BY DEFINITION

Beyond demanding minimal and binding legislation in these roundtable
discussions and any other forum dealing with the global mining industry, we
actually really need to admit to the inherent unjust and unequal nature of
the global economic model itself.

For any person or country that believes in human rights and development for
all, we should be working for a global development model based not on the
relentless expansion of northern-based global businesses responding to the
needs and whims of northern consumers and investors, but rather based on
local control, ownership and accountability.

While enforceable legislation is a bare-minimum short term demand, we have
to challenge and transform the global development model itself. For a
development model to be sustainable and fair to people and the environment,
it must be designed, owned and controlled at the local and regional levels,
not by distant owners and investors.

WHAT TO DO?

For more information about North American mining companies in Central
America, and to get involved in work for justice, equality and environmental
respect: info@rightsaction.org, www.rightsaction.org.

===

GOLDCORP, GLAMIS TO MERGE. PENASQUITO SILVER-GOLD DEPOSIT THE CROWN JEWEL,
By Stephen Stakiw, The Northern Miner, Monday, September 11, 2006

Vancouver -- The latest in a series of mega-mining mergers sees Goldcorp
(G-T, GG-N) looking to boost its ranking amongst the world's top gold
companies through an agreement to merge with mid-tier producer Glamis Gold
(GLG-T, GLG-N), creating a new US$20-billion company.

Shareholders of Reno, Nev.-based Glamis will receive 1.69 shares of Goldcorp
for each of their shares, giving a valuation of US$51.49 based on Goldcorp's
closing price on Aug. 30, a 32.7% premium on Glamis' TSX closing price on
that day. The proposed transaction, approved by both boards, is expected to
close in November, subject to regulatory approvals and the support of at
least two-thirds of Glamis shareholders.

The deal values Glamis at about US$8.6 billion given its 166.6 million
shares outstanding. Based on Glamis' proven and probable reserves of about
28.4 million gold-equivalent oz. (15.73 million oz. gold and 616.9 million
oz. silver), Goldcorp is buying "ounces in the ground" at about US$300
apiece. With a measured and indicated resource of more that 40 million
contained gold equivalent ounces, the acquisition cost comes in at about
US$213 per oz.

Earlier this year, Glamis acquired Vancouver-based Western Silver in a
US$1-billion merger to obtain the large Peñasquito silver-gold deposit in
central Mexico. Subsequent studies have boosted the project's reserves (gold
up 100% and silver up 85%) with the deposit now comprising about
three-quarters of Glamis' reserve base.

Under the merger agreement, Glamis agrees to pay a US$215-million break fee
to Goldcorp under certain circumstances, which also retains a right to match
any competing offers. Goldcorp and Glamis shareholders would hold 60% and
40% of the new Goldcorp, respectively, with the companies holding board
representation in the same proportion.

"From the Goldcorp side, the biggest driver for us was the value we saw in
Glamis; this transaction doubles our reserves and resources," said Goldcorp
president and CEO Ian Telfer.

Glamis produced just over 286,000 oz. gold in the first six months of this
year from El Sauzal in Mexico, Marlin in Guatemala, its 66.7%-interest in
Marigold in Nevada and the San Martin mine in Honduras, at a total cash cost
of US$196 per oz. On the development side, a revised feasibility study at
Peñasquito is evaluating doubling the proposed 50,000-tonne-per-day
throughput with full production expected by late 2009.

Glamis president and CEO Kevin McArthur reviewed the optimization potential
of the merger stating, "We believe synergies between the two companies will
eventually amount to about twenty-five million dollars per year, in addition
to management and people synergies."

In the first half of this year, Goldcorp produced almost 674,000 oz. gold
from its Red Lake, Porcupine (in which it owns 51%) and Musselwhite (68%)
mines in Canada; Alumbrera (37.5%) in Argentina; Luismin in Mexico; Amapari
in Brazil; Peak in Australia; Wharf in South Dakota; and its 50% of La Coipa
in Chile.

Total cash costs were negative US$108 per oz. due to the large copper
byproduct credit from Alumbrera. The company also holds a majority interest
in Silver Wheaton (SLW-T, SLW-N).

Goldcorp has barely finished digesting its recently closed $1.6-billion
acquisition of certain Placer Dome assets midway through its second quarter
under an agreement struck with Barrick Gold (ABX-T, ABX-N), which
successfully acquired Placer in a $10-billion takeover deal in March.

The combined company would become a significant low-cost and un-hedged gold
producer with pro forma annual bullion output approaching 3 million oz.
gold, plus proven and probable reserves of 41.1 million ounces. The new
Goldcorp would rank third amongst the senior gold producers, based on market
capitalization, after Barrick Gold and Newmont Mining (NMC-T, NEM-N).

The planned merger is the latest in a series of major transactions as metal
producers rush to replace reserves being mined at accelerated rates. The
growth strategy is increasing in popularity as companies weigh the costs and
benefits analysis of adding reserves through acquisition versus exploration.

Not being able to vote on the planned merger, many Goldcorp shareholders
were not enamoured with the deal, cited as being overly dilutive, and sold
off a good portion of their shares to push down the stock price by about 15%
to the $30 level on high TSX trading volume. Alternatively, Glamis shares
gained 18% to close up $7.68 at around $50.70 on TSX trading.

===

SKYE FALLING INTO VIEW OF GLOBAL MINERS -- CVRD, BHP BILLITON AND XSTRATA
SAID TO BE WEIGHING BID FOR VANCOUVER COMPANY, By Andy Hoffman and Andrew
Willis, Globe and Mail, September 11, 2006,
http://www.theglobeandmail.com/servlet/story/RTGAM.20060911.wxrskye11/BNStor
y/Business/?page=rss&id=RTGAM.20060911.wxrskye11

The same global mining giants at the centre of the high-stakes battle for
Inco Ltd. and Falconbridge Ltd. are moving downstream, turning their
acquisition sights to smaller Canadian base metal miners amid a shortage of
new nickel supplies.

Companhia Vale do Rio Doce (CVRD) of Brazil, BHP Billiton Ltd., the world's
biggest mining firm, and Xstrata PLC, which recently seized control of
Falconbridge, are all considering bids for Vancouver's Skye Resources Inc.,
according to industry sources familiar with the matter.

CVRD's interest in Skye is understood to be the most advanced, and the iron
ore giant is believed to be preparing a bid that could be in the range of
$20 a share, according to one source in the investment banking industry.
BHP, however, may have the upper hand. The company already has a
16.5-per-cent stake in Skye, which is developing the Fenix nickel project in
Eastern Guatemala. BHP has its own operations in the country close to the
Fenix project.

Skye shares jumped 50 cents to $16.20 Friday on the Toronto Stock Exchange
on speculation of a takeover bid. The stock has surged almost 450 per cent
this year.

Unlike CVRD's $19.4-billion all-cash bid for Inco or Xstrata's $18-billion
acquisition of Falconbridge, an offer for Skye would be a relatively small
purchase for the mining companies.

Skye's market capitalization is $477-million. The Vancouver firm expects to
produce up to 25 million pounds of nickel from the Fenix project a year
beginning in 2008, according to a recent feasibility study. The company says
Fenix could produce up to 50 million pounds of ferro-nickel a year
thereafter.

A Skye spokesman declined to comment on Friday. The company asked its
financial adviser TD Securities to explore the potential merger or sale of
Skye in late August.

Spurred by soaring demand for nickel, copper and other base metals from
China and India, the mining industry is undergoing rapid consolidation amid
soaring commodity prices.

A friendly merger between Inco and Falconbridge was recently scuttled by
hostile bids from larger foreign rivals. Inco attempted to fend off a
hostile offer from Vancouver's Teck Cominco Ltd. and preserve its merger
with Falconbridge by hooking up with Arizona copper giant Phelps Dodge Corp.
in a three-way $40-billion deal to create a North American mining
supermajor.

But Xstrata won control of Falconbridge with an all-cash bid that bested the
Inco and Phelps stock-and-cash offer. Similarly, CVRD appears set to take
over the storied Canadian nickel producer with its own all-cash bid of $86
an Inco share. Teck was forced to withdraw from the race after it failed to
close a massive stock sale to fund its bid. Inco terminated its merger
agreement with Phelps last week when it became clear the stock-and-cash
offer wouldn't survive an Inco shareholder vote. Phelps itself has now
become a possible takeover candidate.

Interestingly, Skye's Fenix project was once owned by Inco, but the mine and
an on-site processing plant was shut down in the early 1980s because of
soaring energy costs and low nickel prices. The price of nickel has more
than doubled this year, extending a three-year boom in base metals. Skye
acquired the rights to the Fenix project in 2004 and Inco owns approximately
12 per cent of the company's stock. A CVRD spokesman did not respond to
requests for comment.

Xstrata recently converted Falconbridge's nickel assets into a new division,
Xstrata Nickel. A spokeswoman for the Anglo-Swiss miner declined to comment
on the company's possible interest in Skye.

Skye is headed by Ian Austin, the former chief financial officer of Placer
Dome Inc., which was swallowed up by Barrick Gold Corp. last year for
$10.4-billion (U.S.). Mr. Austin was unavailable for comment on Friday.

===

WHAT TO DO?

For more information about North American mining companies in Central
America, and to get involved in work for justice, equality and environmental
respect: info@rightsaction.org, www.rightsaction.org.