UPDATE 3-Goldcorp to buy Gold Eagle, reports surprise loss

(Adds details from conference call. In U.S. dollars unless noted)

By Cameron French

TORONTO, July 31 (Reuters) - Goldcorp (G.TO) has agreed to buy fellow Canadian gold miner Gold Eagle Mines GEA.TO for about C$1.5 billion ($1.47 billion) to pick up the Bruce Channel gold discovery, an exploration project adjacent to Goldcorp's flagship Red Lake operation.

Goldcorp, Canada's No. 2 gold producer, also reported an unexpected second-quarter loss, cut its production outlook for the year and boosted its 2008 cost estimates.

The Gold Eagle takeover comes as large gold producers have tried to boost their pipelines by acquiring smaller players with early-stage properties.

Earlier this month, Kinross Gold (K.TO) bid C$1 billion for Aurelian Resources ARU.TO for its Fruta del Norte discovery in Ecuador, while in March Barrick Gold (ABX.TO) bought out Rio Tinto's (RIO.L) 40 percent stake in the Cortez joint venture in Nevada.

Under the friendly deal with Goldcorp, Gold Eagle shareholders will receive C$6.80 in cash and 0.146 shares of Goldcorp for each of their shares. Goldcorp already owns 4.7 percent of Gold Eagle.

"This adds a number of high-grade gold ounces in our own backyard," Goldcorp Chief Executive Kevin McArthur said on a conference call.

The offer values each Gold Eagle share at C$12.62, a 19 percent premium to Wednesday's closing price.

Gold Eagle's shares were up C$1.71, or 16.2 percent, at C$12.28 on the Toronto Stock Exchange on Thursday afternoon.

Goldcorp's stock fell C$1.50, or 3.8 percent, to C$38.35.

The deal follows a move by gold miner Agnico-Eagle (AEM.TO) last month to buy about 5 percent of Gold Eagle.

"Clearly Agnico-Eagle set off alarm bells and Goldcorp has responded very aggressively," said Barry Allan, an analyst at Research Capital in Toronto.

An Agnico-Eagle spokesman said the company was evaluating its options.

Bruce Channel does not have an established resource, as the depth of the deposit has made drilling difficult, but Allan estimated it was at least 7.3 million ounces.

Goldcorp will be able to access the deposit through one of its own nearby shafts and will drill from there to establish a resource, although that likely won't be ready until the end of next year, the company said.

It will also have to sink a new production shaft.

The company gave a rough estimate of the all-in mine costs, including the cost of acquisition, at less than $650 an ounce.

"The price paid is a very handsome premium, and it speaks to the necessity of these big majors to, if they want to continue on this treadmill, they have to go out and find gold," said John Ing, president of investment dealer Maison Placements in Toronto.

UNEXPECTED LOSS

Goldcorp, which has operations in Canada and throughout Latin America, lost $9.2 million, or 1 cent a share, in the quarter ended June 30. That compares with a profit of $2.9 million, or nil a share, in the year-before period.

Adjusted earnings were 12 cents a share, while analysts had expected a profit of 22 cents a share.

Quarterly revenue climbed 19 percent to $631.7 million.

Production was about 552,000 ounces, up from 526,000 ounces, but falling short of company expectations largely due to issues at three mines.

At the Marlin mine in Guatemala, output was hurt by tampering with a power line that caused a temporary disruption, while a ground movement at Los Filos in Mexico and mine sequencing issues at Red Lake in Ontario also hurt.

Because of this, Goldcorp lowered its 2008 output forecast to a range of 2.3 million to 2.4 million ounces, down from its previous expectation of 2.6 million ounces.

Cash costs were $308 an ounce, up from $166, with copper and silver production counted against the costs, in part due to higher costs for energy, labor and other inputs.

These cost pressures, combined with lower gold output, prompted the company to raise its 2008 per-ounce cost estimate to under $300 from $250.

($1=$1.02 Canadian) (Reporting by Cameron French; editing by Rob Wilson)