(Kitco News) - M&A activity in the mining sector appears to be ending the year on a solid note as Canada’s largest gold producer continues to expand its operations.
On Thursday, ahead of the North American open, Agnico Eagle Mines Ltd. announced a friendly agreement to acquire O3 Mining Inc. in an all-cash deal valued at C$204 million.
Agnico offered to acquire, directly or indirectly, all outstanding common shares of O3 Mining (the "Common Shares") at $1.67 per share, representing a 58% premium to O3 Mining's closing price on Dec. 11.
The senior gold producer stated that it is particularly interested in O3’s Marban Alliance property, located near Val-d'Or in Northern Quebec.
“The Marban Alliance property includes the Marban deposit, which is an advanced exploration project that could support an open-pit mining operation similar to Agnico Eagle's Barnat open-pit operations at the Canadian Malartic complex. O3 Mining has estimated that the Marban pit contains 52.4 million tonnes of indicated mineral resources grading 1.03 g/t gold for 1.7 million ounces of gold and 1.0 million tonnes of inferred mineral resources grading 0.97 g/t gold for 32,000 ounces of gold,” Agnico stated in a press release.
“Consistent with our regional strategy, this transaction is a tuck-in acquisition of the Marban deposit into our Canadian Malartic complex. The Marban deposit is expected to complement other 'Fill-the-Mill' opportunities at Canadian Malartic, further improving the production profile of a long-life, world-class asset,” said Ammar Al-Joundi, Agnico Eagle's President and Chief Executive Officer. “Our extensive operational, exploration, and community experience is expected to enhance the value generated from the Marban Alliance property and unlock further potential at our Abitibi platform.”
O3 Mining's President and Chief Executive Officer, José Vizquerra, expressed enthusiasm for the deal, highlighting its benefits for shareholders.
“Agnico Eagle's cash offer at a significant premium to market is an excellent outcome for our shareholders," said Vizquerra. "We believe Agnico Eagle is the gold standard in the precious metals space—it not only has the financial strength and mining expertise to advance the Marban Alliance project, but it also shares our commitment to working in partnership with stakeholders in a socially responsible manner. Today's offer represents a significant milestone for O3 Mining, and I would like to thank our employees, shareholders, First Nations partners, community partners, and the Province of Québec for their support over the years.”
According to some market analysts, the all-cash deal to close out the year bodes well for the mining sector, which has struggled to attract investment capital.
