Agnico Eagle Increases Ownership in Maple Gold Mines

Agnico Eagle Mines Limited AEM recently acquired 33,821,842 Maple Gold Mines Ltd. MGMLF common shares for 8.5 cents per share, amounting to roughly C$2.87 million. These shares were purchased from various sellers who obtained them through a flow-through Common Shares offering by Maple.

Prior to this transaction, Agnico Eagle held 40,852,415 common shares, representing approximately 11.97% of Maple’s issued and outstanding shares on a non-diluted basis. Following the purchase, Agnico Eagle’s ownership soared to 74,674,257 common shares, now accounting for about 19.9% of Maple’s issued and outstanding shares on a non-diluted basis.

Agnico Eagle and Maple sealed an investor rights agreement in October 2020, entitling Agnico Eagle to certain rights as long as it maintains specific ownership thresholds in Maple. These rights include the ability to participate in equity financings to uphold its pro rata ownership in Maple, or to acquire up to a 19.9% ownership interest. Additionally, Agnico Eagle has the privilege to nominate one person to Maple’s board of directors or two if the board size expands to eight or more directors.

The acquisition of common shares by Agnico Eagle is for investment purposes. Depending on market conditions and other factors, Agnico Eagle may procure additional common shares or other securities of Maple, or choose to divest some or all of its holdings.

Agnico Eagle and Maple also entered into a conveyance and option agreement in June 2024. This agreement, subject to certain conditions, involves the termination of an existing joint venture agreement dating back to February 2021. Maple will gain a 100% ownership interest in the Douay Gold Project and Joutel Gold Project, while granting Agnico Eagle a 1% net smelter return royalty on the Projects. Agnico Eagle will retain certain options to acquire a 50% ownership interest in the Projects.

Agnico Eagle’s shares have surged by 33.5% over the past year, outstripping a 10.7% increase in the industry.

For 2024, the company anticipates producing 3.35-3.55 million ounces of gold, with projected total cash costs per ounce falling in the range of $875-$925, and all-in sustaining costs (AISC) ranging between $1,200 and $1,250 per ounce. Capital expenditures for the year, excluding capitalized exploration, are estimated at $1.6 billion to $1.7 billion.

Zacks Rank & Key Picks

Agnico Eagle currently holds a Zacks Rank #3 (Hold).

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