Agnico Eagle Mines Limited (NYSE:AEM) (TSX:AEM) is pleased to announce that it has delivered a definitive offer to the board of directors of Alexandria Minerals Corporation pursuant to which Agnico Eagle would acquire 100% of Alexandria’s issued and outstanding common shares, including common shares issuable under outstanding options and warrants, by way of a plan of arrangement under the Canada Business Corporations Act. Total consideration required to effect the acquisition is expected to be approximately C$26 million (which has been calculated based on C$0.05 per issued and outstanding Alexandria Share). The Proposal is not subject to any financing or due diligence condition. Agnico Eagle has been informed that Alexandria’s board of directors has determined that the Proposal constitutes a “Superior Proposal” as defined in the arrangement agreement dated May 14, 2019 between Alexandria and Chantrell Ventures Corp.
Strategic Rationale for Agnico Eagle
The acquisition of Alexandria will allow Agnico Eagle to consolidate an additional 14,819 hectares of mining claims that cover approximately 35 kilometres of strike length along the Cadillac-Larder Lake break in the prospective Val d’Or gold camp. Three of Alexandria’s properties (Orenada, Akasaba and Sleepy) collectively contain historical inferred mineral resources of 526,702 ounces of gold (4.6 million tonnes at 3.53 grams per tonne gold) and indicated mineral resources of 448,654 ounces of gold (7.4 million tonnes at 1.88 grams per tonne gold), each as estimated by Alexandria.
“Agnico Eagle has a long history of involvement with Alexandria, both as an equity investor and through the purchase of the Akasaba West property in 2014”, said Alain Blackburn, Agnico Eagle’s Senior Vice President, Exploration. “We believe that the key Alexandria properties are highly prospective and underexplored and could potentially provide future sources of ore at our nearby Goldex mine”, added Mr. Blackburn.
Agnico Eagle’s Proposal
Under the Proposal, each shareholder of Alexandria would have the option to receive, for each Alexandria Share, either: (i) C$0.05, in cash; (ii) 0.000819355 common shares of Agnico Eagle (“Agnico Shares”) plus C$0.000001; or (iii) 0.000819355 Agnico Shares (the “Share Option”). Based on the Cash Option, the Proposal represents a premium of:
In addition, all unexercised options to purchase Alexandria Shares would be exchanged for options to purchase Agnico Shares and all unexercised warrants to purchase Alexandria Shares would remain outstanding and become exercisable for Agnico Shares, in each case, based on the exchange ratio between Alexandria Shares and Agnico Shares represented by the Share Option.
Agnico has been advised by Alexandria that it has provided notice of the Proposal to Chantrell as required by the Chantrell Agreement. Alexandria has also advised that, subject only to the expiry or waiver by Chantrell of Chantrell’s right to match during the right to match period under the Chantrell Agreement, Alexandria proposes to enter into the definitive agreement with Agnico Eagle in connection with the Proposal. To enter the definitive agreement, Alexandria would first terminate the Chantrell Agreement and pay the termination fee of C$875,000.
Agnico Eagle currently owns 28.8 million Alexandria Shares, representing 5.6% of the issued and outstanding shares of Alexandria.
Key Benefits to Alexandria Shareholders
In addition to the substantial premium to the current and historical trading price of Alexandria Shares and to the value of the Chantrell offer, as described above, the Proposal would offer the following key benefits to Alexandria shareholders:
About Agnico Eagle
Agnico Eagle is a senior Canadian gold mining company that has produced precious metals since 1957. Its operating 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.
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