TORONTO (miningweekly.com) – Canadian precious-metals producer Agnico-Eagle Mines has agreed to buy a 9.96% interest in Mexico-focused junior Kootenay Silver, through making a $4.75-million investment in a private placement.
Kootenay on Tuesday said under the terms of the subscription agreement, Agnico-Eagle would buy a total of 6.25-million units at a price of $0.76 a unit.
Each unit was comprised of one common share and half a common share purchase warrant. Each whole share purchase warrant would entitle Agnico-Eagle to acquire one common share of Kootenay at a price of $1.08 for a period of two years from the date of issuance.
In the event that all warrants were exercised, an additional $3.37-million would be raised.
"We are very pleased that Agnico-Eagle has committed to become a strategic investor in Kootenay Silver. Agnico's investment provides us with a substantial alternative source of capital to the open market from a recognised world leader in precious metals mining, development and exploration.
“Agnico's commitment to exploration and mining in Mexico directly coincides with our own commitment to the exploration and development of Promontorio. This investment recognises the quality and near-term potential of our flagship Promontorio silver project and our other principal exploration targets in Sonora, Mexico,” Kootenay president and CEO James McDonald said.
Agnico-Eagle president and CEO Sean Boyd added the deal was in line with the company’s desire to increase its presence in Sonora state.
Kootenay said it intended to use the net proceeds of the offering to advance its Promontorio project and for general working capital.
The deal was expected to close on Friday.
Agnico-Eagle also recently bought a 9.96% interest in project developer Sulliden Gold and its Shahuindo project, located in a prolific gold-producing district in northern Peru, through a $24-million private placement.