VANCOUVER (miningweekly.com) – Gold miner Agnico Eagle has agreed to buy a suite of Canadian exploration assets from the 50/50-owned and operated Agnico/Yamana Gold joint venture Canadian Malartic Corporation (CMC), the companies announced on Thursday.
Agnico will pay $162.5-million in cash for the transaction that is being structured as an asset deal, whereby Agnico will acquire Yamana's indirect 50% interest in the Canadian exploration assets of CMC, giving Agnico 100% ownership of CMC's interest in the assets on closing of the deal, slated for March 2018.
The suite of exploration assets includes the advanced Kirkland Lake and Hammond Reef gold projects.
"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. 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," said Agnico CEO Sean Boyd.
Agnico noted that 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 CMC and the Canadian Malartic General Partnership.
The Kirkland Lake project covers about 27 291 ha in north-eastern Ontario and mineral reserves and mineral resources have already been outlined on several properties. Key deposits in the Kirkland Lake area include Upper Beaver, Anoki and McBean, Amalgamated Kirkland and Upper Canada. Hammond Reef is an advanced stage gold project covering approximately 31 145 ha in north-western Ontario. The project contains well defined mineral resources.
Following closing, should Agnico sell 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 in the sale.