Agnico Eagle Mines (AEM) Expands With Canada Nickel Investment
Agnico Eagle Mines Limited AEM disclosed its acquisition of 19.6 million units of Canada Nickel Company Inc. at $1.18 per Unit, totaling approximately $23.13 million. The units were purchased from multiple sellers involved in an offering of flow-through Units by Canada Nickel. Each Unit comprises one common share of Canada Nickel and 0.35 of one common share purchase warrant, allowing the holder to acquire one common share at $1.77 until Dec 29, 2026, with potential acceleration based on certain events.
Having extensively assessed the critical minerals sector over two years, particularly in Canada, Agnico Eagle strategically invested in Canada Nickel, considering its advantageous position in regions where Agnico Eagle operates. The investment aligns with Agnico Eagle's strategy of early-stage project investments, providing a foothold in the emerging nickel belt. Canada Nickel's Crawford Nickel-Cobalt Sulphide Project, situated in northern Ontario near Agnico Eagle's Abitibi region operations, boasts a sizable nickel resource with an anticipated low carbon footprint.
Before the Share Purchases, Agnico Eagle held no common shares. Post-acquisition, Agnico Eagle possesses 19.6 million common shares and 6.86 million warrants, constituting about 12% of the issued and outstanding common shares on a non-diluted basis and 15.6% on a partially-diluted basis (factoring in the exercise of Warrants).
Agnico Eagle Mines Limited Price and Consensus
Agnico Eagle Mines Limited price-consensus-chart | Agnico Eagle Mines Limited Quote
Simultaneously with the Share Purchases, Agnico Eagle and Canada Nickel entered an investor rights agreement. This accord grants Agnico Eagle specific rights, contingent upon maintaining certain ownership thresholds, including the right to partake in equity financings, enhance its holdings or acquire up to a 15.6% ownership interest in Canada Nickel on a partially diluted basis. Agnico Eagle, though currently not intending to do so, holds the right to nominate one individual to Canada Nickel's board of directors.
Agnico Eagle emphasizes its acquisition as an investment and may, based on market conditions and other factors, engage in further acquisitions or divestitures of common shares, common share purchase warrants or other securities of Canada Nickel in the future.
In the past year, AEM’s shares have increased 2.4% compared with the industry’s 3.6% rise in the same period.
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Zacks Rank & Key Picks
AEM currently carries a Zacks Rank #3 (Hold).
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