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Agnico Eagle stock on the rise after closing Osisko deal

16th June 2014

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – The TSX-listed stock of gold miner Agnico Eagle was trending higher on Monday after Agnico, together with joint venture partner Yamana Gold, closed the C$3.9-billion friendly takeover of Quebec miner Osisko Gold.

Agnico, which also operates the low-cost, bulk tonnage Goldex mine, near Val d’Or, and is tapped to bring more efficiencies and lower costs to the Canadian Malartic mine that the two partners would now share 50/50 in, recorded a $0.33 rise in morning trading on the TSX, while the new entrant to the Canadian mining scene Yamana’s TSX-listed stock remained relatively flat at around C$8.99 apiece.

Osisko’s TSX-listed stock was suspended from trading on Monday morning, pending its delisting at the close of business.

Agnico and Yamana had now formed a joint committee to operate the Canadian Malartic mine, in Quebec. The partners would also jointly explore and potentially develop the Kirkland Lake assets, and continue exploration at the Hammond Reef, Pandora and Wood-Pandora properties.

“With the acquisition of Osisko now completed, Agnico Eagle looks forward to working with Yamana to further optimise the Canadian Malartic mine and build on the solid operational performance achieved in May 2014,” Agnico Eagle president and CEO Sean Boyd said.

“The completion of our joint acquisition of Osisko and the Canadian Malartic mine adds another cornerstone asset to our portfolio that will contribute significantly to increased production and cash flow levels as we continue to balance top and bottom line growth,” Yamana chairperson and CEO Peter Marrone added.

The two partners would now collaborate to implement more efficiencies at Canadian Malartic and review the Kirkland Lake asset portfolio with the intent of designing an exploration programme to expand and upgrade the current resource base.

At the end of April, Goldcorp walked away from its C$3.6-billion hostile offer to acquire Osisko that started in January. Goldcorp was outbid by white knights, Latin America-focused precious metals miner Yamana, and Canadian gold miner Agnico, to jointly buy all Osisko's issued and outstanding common shares for C$3.9-billion, or C$8.15 a share.

Under the agreement, certain Osisko assets would be transferred to Osisko Gold Royalties, which would be owned by Osisko shareholders as part of payment, and the new company would also be given a 5% net smelter return (NSR) royalty on the Canadian Malartic mine; a 2% NSR royalty on all existing exploration properties including Kirkland Lake, Hammond Reef, Pandora/Wood and Pandora assets; C$155-million cash; all assets and liabilities of Osisko in the Guerrero camp; as well as certain other investments.

“Osisko Gold Royalties is pleased to be making its debut today. We are pleased that Osisko shareholders have the unique opportunity to continue to participate in the Canadian Malartic success story as shareholders of Osisko Gold Royalties - a royalty company founded on the strong platform of that asset,” chairperson and CEO Sean Roosen said.

Edited by Creamer Media Reporter

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