Cash windfall for Agnico Eagle
Business as usual move means $43 million for company coffers
Walter Strong
Northern News Services
Published Monday, January 26, 2015
NUNAVUT
Agnico Eagle Mines Ltd.(TSX:AEM) gained from Vancouver-based Goldcorp Inc.'s appetite to expand its gold holdings last week.
An 2014 aerial view of the Meadowbank gold mine camp facilities, foreground, processing plant and site infrastructure near Baker Lake. The company recently added more than $43 million to its bankroll thanks to the strategic sale of assets in Ontario. - photo courtesy of Agnico Eagle Mines Ltd. |
On Jan. 21, Agnico Eagle agreed to sell its shares in Probe Mines Ltd. to Goldcorp for $43.4 million. The all-cash deal is set to close Jan. 28.
Agnico Eagle is the owner of the operating Meadowbank gold mine near Baker Lake, as well as the advanced stage Meliadine gold project and the relatively early stage, but promising, Amaruq property.
In a press release Agnico Eagle described the sale as a business-as-usual move to shed "non-core" assets.
"We are continuously reviewing and adjusting our portfolio of projects," Agnico Eagle's Corporate Director of Communications Dale Coffin stated in an e-mail to News North.
The flip side of constant review is the occasional acquisition of new properties.
"Agnico Eagle is constantly looking at new growth opportunities through projects owned by junior mining companies," Coffin said.
"This is ... how we acquired both the Meadowbank and Meliadine projects in Nunavut."
Agnico Eagle acquired the Meadowbank property from Cumberland Resources Ltd. in 2007, and the Meliadine property from Comaplex Mineral Corp. in 2010.
Coffin said the company will use the cash to pay down debt.
Well before reaching this deal with Goldcorp, Agnico Eagle had already set a $22-million 2015 exploration budget for its Amaruq deposit. Drilling is scheduled to begin at the end of February.
Advancing Meliadine and advancing Amaruq have been expensive - approximately $50 million was spent on advancing the two projects last year - but with Meadowbank expected to reach end of life in 2017, the company is looking to keep a supply of ore to its Meadowbank operation.
Coffin confirmed that Agnico Eagle's Nunavut properties and operations are core assets.
"Agnico Eagle views Nunavut as one of its four strategic platforms (Nunavut, Quebec, Europe and Mexico) as we have considerable growth potential with Meliadine and now the Amaruq project," said Coffin.
"Meadowbank is our best performing operation."
Goldcorp lists no Nunavut holdings on its website. The company has a market capitalization of $24.8 billion and holds more than 112 million ounces of gold resources across its global properties.
Earlier in the month Goldcorp made an all-stock $526 million friendly takeover of Probe Mines, which owns the Borden gold project near Chapleau, Ont.
