There is an ambitious new player in the Red Lake Gold camp. AGNICO-EAGLE continues to quietly expand its holding in the camp by investing approximately $50 million in GOLD EAGLE MINES. Gold Eagle’s major asset is the high-grade Bruce Channel discovery located in the western part of the Red Lake camp.
Agnico-Eagle has purchased 5.5 million units of Gold Eagle for $9.06 per unit. Each unit consists of one Gold Eagle share and one-half a purchase warrant. Each full warrant allows the holder to buy one common share of Gold Eagle at $10.15 for a period of 36 months. This current deal gives Agnico-Eagle a 5.18% share of Gold Eagle, and its interest could rise to 7.15% if all warrants are exercised. Agnico president and COO Ebe Scherkus has already been appointed to the Gold Eagle board.
First, for Agnico-Eagle to come up with $50-million for the transaction in the same year it is building and paying for five new mines and the extension of another one is exceptional. The investment is only made possible because Agnico-Eagle is on very firm financial footing.
Second, I checked my crystal ball and noted that Agnico-Eagle may just be biding its time until GOLDCORP gets tired of underground mining and sells its Campbell-Red Lake mine. Who better than Agnico to snap it up? The company is going to be rich, and its expertise in underground gold mining is second to none.
Suddenly, Agnico-Eagle could become one of the major gold miners in the world.
Well, that’s my thought for this morning. The growth of Agnico-Eagle will continue to be one of the more fascinating stories in the Canadian mining industry