AGNICO EAGLE ANNOUNCES INVESTMENT IN CANADA NICKEL COMPANY INC.

Rhea-AI Summary

Agnico Eagle Mines Limited (NYSE: AEM) (TSX: AEM) announced the acquisition of 19,600,000 units of Canada Nickel Company Inc. at a price of $1.18 per unit for a total consideration of approximately $23,128,000. This investment represents an early-stage investment in the critical minerals sector, focusing on Canada. The acquisition aligns with Agnico Eagle's strategy of early-stage project investments, providing an opportunity to establish a presence in an emerging nickel belt.

Insights

Market Research Analyst

The acquisition by Agnico Eagle Mines Limited of a significant stake in Canada Nickel Company Inc. suggests a strategic positioning within the critical minerals sector, particularly nickel, which is a key component in batteries for electric vehicles (EVs) and energy storage solutions. This move aligns with broader market trends where mining companies are diversifying their portfolios to include battery metals, responding to the rising demand driven by the global transition to green energy.

From a market perspective, this investment could signal confidence in the long-term prospects of the EV market and renewable energy sector. Investors might view this acquisition as a forward-looking move by Agnico Eagle, potentially offering a hedge against the volatility of gold prices, which is their primary business. The proximity of Canada Nickel's resources to Agnico's operations could offer logistical advantages and synergies, potentially reducing operational costs in the long run.

However, the early-stage nature of Canada Nickel's projects means there is significant risk involved. The actual production and profitability of the nickel deposits will depend on various factors, including the progress of exploration activities, commodity prices and technological developments in mining and processing. Stakeholders should monitor these aspects closely as they could impact Agnico Eagle's performance and the valuation of its investment.

Financial Analyst

Agnico Eagle's investment represents a material change in their asset allocation, which could affect the company's risk profile and expected returns. The acquisition price of $1.18 per unit and the subsequent rights to participate in equity financings could be financially advantageous if Canada Nickel's stock appreciates. The additional right to nominate a board member, subject to ownership thresholds, provides Agnico Eagle with potential influence over Canada Nickel's strategic decisions, potentially aligning it more closely with Agnico's interests.

Investors should consider the impact of this transaction on Agnico Eagle's balance sheet and liquidity. The initial outlay of approximately $23 million is a considerable investment and the potential for further acquisitions could represent a more significant cash commitment. The terms of the warrants, with an exercise price of $1.77, suggest a bullish outlook on Canada Nickel's share price performance.

It's also important to evaluate the transaction in the context of Agnico Eagle's overall investment strategy. Agnico Eagle's history of early-stage project investments indicates a pattern of seeking long-term growth opportunities. The 12% ownership on a non-diluted basis and 15.6% on a partially-diluted basis, assuming exercise of the warrants, could offer substantial upside if Canada Nickel's projects prove successful.

Environmental, Social and Governance (ESG) Analyst

The focus on acquiring a stake in a nickel mining company with a projected low carbon footprint aligns with the increasing importance of environmental, social and governance (ESG) factors in investment decision-making. Investors and stakeholders are progressively looking for companies that contribute to sustainable development and Agnico Eagle's move could be seen as a commitment to ESG principles.

Canada Nickel's Crawford Nickel-Cobalt Sulphide Project's potential for a low carbon footprint is particularly relevant given the global push for reducing emissions across all industries. If the project succeeds in delivering on this promise, it could enhance Agnico Eagle's ESG profile and appeal to a broader base of socially responsible investors. The ESG implications of this investment could also have regulatory benefits, as jurisdictions increasingly incentivize environmentally friendly mining practices.

However, the actual environmental impact of the project will need to be carefully monitored, as mining activities inherently pose ecological risks. Transparent reporting on environmental metrics and adherence to high ESG standards will be critical for maintaining investor confidence and securing the social license to operate within the communities affected by mining activities.

Stock Symbol: AEM (NYSE and TSX)

TORONTO, Dec. 29, 2023 /PRNewswire/ - Agnico Eagle Mines Limited (NYSE: AEM) (TSX: AEM) ("Agnico Eagle") announced today that it acquired 19,600,000 units ("Units") of Canada Nickel Company Inc. (TSXV: CNC) ("Canada Nickel") at a price of $1.18 per Unit for total consideration of approximately $23,128,000 from several sellers that acquired the Units in connection with an offering of flow-through Units by Canada Nickel (the "Share Purchases"). Each Unit was comprised of one common share of Canada Nickel (a "Common Share") and 0.35 of one common share purchase warrant of Canada Nickel (each whole common share purchase warrant, a "Warrant"). Each Warrant entitles the holder to acquire one Common Share at a price of $1.77 at any time prior to December 29, 2026, subject to acceleration of the expiry date upon the occurrence of certain events.

Agnico Eagle has spent approximately two years evaluating the critical minerals sector, focusing on Canada and the regions where it operates, where the Company believes it has a competitive advantage. Agnico Eagle's investment in Canada Nickel represents an early stage investment in this growing sector. Canada Nickel's large, prospective land package and portfolio of early-stage nickel-sulphide deposits are located in northern Ontario, in close proximity to Agnico Eagle's operations in the Abitibi region of Ontario and Quebec. Canada Nickel's Crawford Nickel-Cobalt Sulphide Project has a large nickel resource and is expected to have a low carbon footprint. Aligning with Agnico Eagle's well-established strategy of early-stage project investments, this investment represents an opportunity to establish a presence in an emerging nickel belt and monitor both the project's progress and emerging technologies relevant to its development.

Prior to the Share Purchases, Agnico Eagle did not own any Common Shares. Following the Share Purchases, Agnico Eagle owns 19,600,000 Common Shares and 6,860,000 Warrants, representing approximately 12% of the issued and outstanding Common Shares on a non-diluted basis and 15.6% of the issued and outstanding Common Shares on a partially-diluted basis (assuming the exercise of the Warrants).

Concurrently with the Share Purchases, Agnico Eagle and Canada Nickel entered into an investor rights agreement, pursuant to which Agnico Eagle is entitled to certain rights, provided Agnico Eagle maintains certain ownership thresholds in Canada Nickel, including: (a) 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 Canada Nickel at the time of such financing or acquire up to a 15.6% ownership interest, on a partially diluted basis, in Canada Nickel; and (b) the right (which Agnico Eagle has no present intention of exercising) to nominate one person to the board of directors of Canada Nickel.

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 Canada Nickel or dispose of some or all of the Common Shares, common share purchase warrants or other securities of Canada Nickel that it owns at such time.

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. Canada Nickel's head office is located at 130 King Street West, Suite 1900, Toronto, Ontario  M5X 1E3.

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 29, 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 Canada Nickel in the future; the prospects of the critical minerals sector; the prospects and potential resources of Canada Nickel's properties, including the Crawford Nickel-Cobalt Sulphide Project; and expectations regarding the carbon footprint and potential use of emerging technologies in respect of Canada Nickel's properties.

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 is the stock symbol for Agnico Eagle Mines Limited?

The stock symbol for Agnico Eagle Mines Limited is AEM (NYSE and TSX).

What is the total consideration for the acquisition of units of Canada Nickel Company Inc. by Agnico Eagle Mines Limited?

The total consideration for the acquisition of units of Canada Nickel Company Inc. by Agnico Eagle Mines Limited is approximately $23,128,000.

Where are Canada Nickel Company Inc.'s land package and early-stage nickel-sulphide deposits located?

Canada Nickel Company Inc.'s land package and early-stage nickel-sulphide deposits are located in northern Ontario, in close proximity to Agnico Eagle Mines Limited's operations in the Abitibi region of Ontario and Quebec.

What percentage of the issued and outstanding Common Shares does Agnico Eagle Mines Limited own following the Share Purchases?

Following the Share Purchases, Agnico Eagle Mines Limited owns approximately 12% of the issued and outstanding Common Shares on a non-diluted basis and 15.6% on a partially-diluted basis.

What rights does Agnico Eagle Mines Limited have pursuant to the investor rights agreement with Canada Nickel?

Agnico Eagle Mines Limited is entitled to certain rights, including the right to participate in equity financings, top-up its holdings, and the right to nominate one person to the board of directors of Canada Nickel.