AGNICO EAGLE ANNOUNCES FINANCING AND AN EARN-IN AGREEMENT WITH FIREFOX GOLD CORP.

Rhea-AI Summary

Agnico Eagle Mines Limited (NYSE: AEM) (TSX: AEM) announced the acquisition of 19,010,000 units of FireFox Gold Corp. in a non-brokered private placement at a price of $0.075 per unit for a total consideration of approximately $1,425,750. The acquisition represents approximately 10.9% of the issued and outstanding common shares on a non-diluted basis and 19.6% on a partially-diluted basis.

Insights

Financial Analyst

The acquisition by Agnico Eagle Mines Limited of a significant stake in FireFox Gold Corp. represents a strategic investment that can potentially impact Agnico Eagle's financials and growth trajectory. As a Financial Analyst, it is pertinent to assess the implications of this investment on Agnico Eagle's portfolio diversification, potential revenue streams and the overall synergy between the two companies.

With Agnico Eagle acquiring approximately 10.9% of the issued and outstanding Common Shares on a non-diluted basis and 19.6% on a partially-diluted basis, the company is positioning itself to capitalize on FireFox's assets, particularly the Kolho properties in Finland. This investment not only provides Agnico Eagle with a stake in FireFox's current resources but also with the option to increase its ownership and become the operator of the Kolho Property project upon earning a 51% interest. The investor rights agreement grants Agnico Eagle a level of influence over FireFox's future financings and board composition, subject to ownership thresholds.

For stakeholders, the short-term impact may include fluctuations in Agnico Eagle's stock price as the market digests the news and evaluates the investment's potential. In the long-term, the success of the Kolho Property project and the integration of FireFox's assets into Agnico Eagle's operations could result in increased resource bases and revenues. However, the benefits are contingent upon the exploration success and subsequent development of the Kolho properties, which carries inherent risks associated with mining ventures.

Mining Industry Analyst

The mining sector is characterized by mergers, acquisitions and strategic partnerships which are crucial for resource expansion and risk management. From a Mining Industry Analyst's perspective, Agnico Eagle's investment in FireFox aligns with industry trends where larger mining entities secure stakes in junior miners to bolster their resource inventories and pipeline projects.

The terms of the earn-in agreement and the rights to become the operator of the Kolho Property project suggest a forward-looking strategy aimed at resource control and operational influence. This move could be a response to the sector's increasing competition for high-potential mining properties and the strategic importance of geographical diversification. The potential for discovering economically viable mineral deposits in the Kolho Property could significantly impact Agnico Eagle's valuation and competitive stance within the industry.

It is essential to consider the geopolitical stability of Finland, the regulatory environment and the potential for resource nationalization or changes in mining laws that could affect the profitability and feasibility of the project. The long-term benefits hinge on successful exploration, adherence to environmental and safety standards and the ability to efficiently extract and market the minerals.

Legal Expert

From a legal standpoint, the transaction between Agnico Eagle and FireFox involves intricate contractual agreements and compliance with securities laws. The investor rights agreement and the earn-in agreement are legally binding documents that establish the rights and obligations of both parties.

The stipulations within these agreements, such as the right to nominate board members and the conditions under which Agnico Eagle can increase its stake, are critical in understanding the governance implications of the investment. These rights can influence FireFox's strategic decisions and governance structure, potentially impacting the company's future direction and operations.

Furthermore, the early warning report filing is a regulatory requirement that ensures transparency and provides stakeholders with essential information regarding changes in company ownership. This filing must adhere to securities laws and regulations and its content can be a valuable source of information for investors analyzing the transaction's implications.

Stock Symbol:  AEM (NYSE and TSX)

TORONTO, Dec. 20, 2023 /PRNewswire/ - Agnico Eagle Mines Limited (NYSE: AEM) (TSX: AEM) ("Agnico Eagle") announced today that it has acquired 19,010,000 units ("Units") of FireFox Gold Corp. (TSX-V: FFOX) ("FireFox") in a non-brokered private placement at a price of $0.075 per Unit for total consideration of approximately $1,425,750. Each Unit was comprised of one common share of FireFox (a "Common Share") and one common share purchase warrant of FireFox (a "Warrant"). Each Warrant entitles the holder to acquire one Common Share at a price of $0.10 at any time prior to December 20, 2028, subject to acceleration of the expiry date upon the occurrence of certain events.

Prior to the private placement, Agnico Eagle did not own any Common Shares. Following the private placement, Agnico Eagle owns 19,010,000 Common Shares and 19,010,000 Warrants, representing approximately 10.9% of the issued and outstanding Common Shares on a non-diluted basis and 19.6% of the issued and outstanding Common Shares on a partially-diluted basis.

Agnico Eagle and FireFox entered into an investor rights agreement in connection with the private placement pursuant to which Agnico Eagle was  granted certain rights, provided Agnico Eagle maintains certain ownership thresholds in FireFox, including: (i) the right to participate in equity financings and top-up its holdings in relation to dilutive issuances in order to maintain its pro rata ownership interest in FireFox at the time of such financing or acquire up to a 19.99% ownership interest, on a partially diluted basis, in FireFox; and (ii) the right (which Agnico Eagle has no present intention of exercising) to nominate one person (and in the case of an increase in the size of the board of directors of FireFox to 10 or more directors, two persons) to the board of directors of FireFox.

Agnico Eagle acquired the Common Shares and the Warrants for investment purposes.  Depending on market conditions and other factors, Agnico Eagle may, from time to time, acquire additional Common Shares, common share purchase warrants or other securities of FireFox or dispose of some or all of the Common Shares, common share purchase warrants or other securities of FireFox that it owns at such time.

On December 20, 2023, Agnico Eagle Finland Oy ("Agnico Finland"), a wholly-owned subsidiary of Agnico Eagle, FireFox Gold Oy ("FireFox Oy"), a wholly-owned subsidiary of Firefox, and FireFox, entered into an earn-in agreement pursuant to which FireFox Oy granted Agnico Finland the right to earn a 51% interest in the Kolho properties owned by FireFox Oy located in northern Finland (the "Kolho Property"). Upon Agnico Eagle earning a 51% interest in the Kolho Property, Agnico Finland and FireFox Oy, among others, will enter into a joint venture agreement governing the relationship of the parties in respect of the Kolho Property, pursuant to which Agnico Finland will be the operator of the project and will be granted the right to acquire an additional 24% interest in the Kolho Property.

An early warning report will be filed by Agnico Eagle in accordance with applicable securities laws. To obtain a copy of the early warning report, please contact:

Agnico Eagle Mines Limited
c/o Investor Relations
145 King Street East, Suite 400
Toronto, Ontario  M5C 2Y7
Telephone:  416-947-1212
Email: investor.relations@agnicoeagle.com

Agnico Eagle's head office is located at 145 King Street East, Suite 400, Toronto, Ontario M5C 2Y7. FireFox's head office is located at 1021 West Hastings Street, Suite 650, Vancouver, British Columbia  V6C 0C3.

About Agnico Eagle

Agnico Eagle is a senior Canadian gold mining company, producing precious metals from operations in Canada, Australia, Finland and Mexico. It has a pipeline of high-quality exploration and development projects in these countries as well as in the United States. Agnico Eagle is a partner of choice within the mining industry, recognized globally for its leading environmental, social and governance practices. Agnico Eagle was founded in 1957 and has consistently created value for its shareholders, declaring a cash dividend every year since 1983.

For further information regarding Agnico Eagle, contact Investor Relations at investor.relations@agnicoeagle.com or call (416) 947-1212.

Forward-Looking Statements

The information in this news release has been prepared as at December 20, 2023. Certain statements in this news release, referred to herein as "forward-looking statements", constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" under the provisions of Canadian provincial securities laws.  These statements can be identified by the use of words such as "may", "will" or similar terms.

Forward-looking statements in this news release include, without limitation, statements relating to Agnico Eagle's acquisition or disposition of securities of FireFox in the future and any future interest that Agnico Eagle may earn or acquire in the Kolho Property, and in connection therewith, the entering into of a joint venture agreement between Agnico Eagle and FireFox.

Forward-looking statements are necessarily based upon a number of factors and assumptions that, while considered reasonable by Agnico Eagle as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies.  Many factors, known and unknown, could cause actual results to be materially different from those expressed or implied by such forward-looking statements.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made.  Other than as required by law, Agnico Eagle does not intend, and does not assume any obligation, to update these forward-looking statements.

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SOURCE Agnico Eagle Mines Limited

FAQ

What did Agnico Eagle Mines Limited (AEM) announce?

Agnico Eagle Mines Limited announced the acquisition of 19,010,000 units of FireFox Gold Corp. in a non-brokered private placement.

At what price were the units acquired?

The units were acquired at a price of $0.075 per unit.

What percentage of the issued and outstanding common shares does the acquisition represent?

The acquisition represents approximately 10.9% of the issued and outstanding common shares on a non-diluted basis and 19.6% on a partially-diluted basis.

What rights were granted to Agnico Eagle in connection with the private placement?

Agnico Eagle was granted the right to participate in equity financings, top-up its holdings in relation to dilutive issuances, and nominate one person to the board of directors of FireFox.

What agreement was entered into with FireFox Gold Corp.?

Agnico Eagle Finland Oy, FireFox Gold Oy, and FireFox entered into an earn-in agreement granting Agnico Eagle the right to earn a 51% interest in the Kolho properties owned by FireFox Oy located in northern Finland.