Agnico Eagle to Purchase the Exploration Assets of Canadian Malartic Corporation; Including the Kirkland Lake and Hammond Reef Gold Projects
TORONTO, Dec. 21, 2017 /CNW/ - Agnico Eagle Mines Limited (NYSE: AEM, TSX:AEM) ("Agnico Eagle" or the "Company") today announced that it has agreed to acquire all of the Canadian exploration assets of Canadian Malartic Corporation ("CMC"), including the Kirkland Lake and Hammond Reef Gold projects (the "Transaction"). CMC is a corporation 50-50 owned and operated by Agnico Eagle and Yamana Gold Inc. ("Yamana").
The Transaction is being structured as an asset deal, whereby Agnico Eagle will acquire all of Yamana's indirect 50% interest in the Canadian exploration assets of CMC, giving Agnico Eagle 100% ownership of CMC's interest in the assets on closing of the Transaction. The effective purchase price after the distribution of the sale proceeds by CMC to its shareholders will be US$162.5 million in cash. The Transaction will not affect the Canadian Malartic mine and related assets including Odyssey, East Malartic, Midway, and East Amphi, which will continue to be jointly owned and operated by the Company and Yamana through CMC and the Canadian Malartic General Partnership ("Canadian Malartic GP").
"The purchase of the CMC asset portfolio enhances our longer-term development pipeline, and provides us with potential production growth post our current mine buildout in Nunavut," said Sean Boyd, Agnico Eagle's Chief Executive Officer. "The Kirkland Lake property package enhances our current mineral reserves and offers near-term exploration upside, while the Hammond Reef project provides good optionality to a potential rise in the gold price," added Mr. Boyd.
Under the proposed Transaction, Agnico Eagle will acquire 100% of CMC's Canadian exploration assets located in Ontario and Quebec, other than CMC's interests in Canadian Malartic GP and the Canadian Malartic mine. CMC's principal Canadian exploration assets include the Kirkland Lake and the Hammond Reef Gold projects, as well as additional mining claims and assets located in Ontario and Quebec. The Kirkland Lake project covers approximately 27,291 hectares in northeastern Ontario and mineral reserves and mineral resources have been outlined on several properties. Key deposits in the Kirkland Lake area include: Upper Beaver, Anoki and McBean, Amalgamated Kirkland (AK) and Upper Canada. Hammond Reef is an advanced stage gold project covering approximately 31,145 hectares in northwestern Ontario. The project contains well defined mineral resources.
Additional details on the mineral reserves and mineral resources being acquired by Agnico Eagle are presented in the table at the end of the news release.
In connection with the proposed Transaction, Agnico Eagle, CMC and Yamana have entered into an asset purchase agreement (the "Agreement"). The parties have agreed to work expeditiously towards closing of the Transaction, which is anticipated to occur by March 31, 2018 in respect of those assets which CMC can then convey with subsequent closings thereafter as CMC obtains the requisite consents to transfer. The Transaction is subject to notification under the Competition Act (Canada) and the receipt of government, First Nations and other third party consents. Under the Agreement, if Agnico Eagle sells any of the Kirkland Lake and Hammond Reef properties during the 24 month period from the date of the Agreement, Yamana will participate in any increase in net proceeds received by Agnico Eagle in the sale.
About Agnico Eagle
Agnico Eagle is a senior Canadian gold mining company that has produced precious metals since 1957. Its eight mines are located in Canada, Finland and Mexico, with exploration and development activities in each of these countries as well as in the United States and Sweden. Agnico Eagle and its shareholders have full exposure to gold prices due to its long-standing policy of no forward gold sales. Agnico Eagle has declared a cash dividend every year since 1983.