AGNICO EAGLE ANNOUNCES ACQUISITION OF COMMON SHARES OF ONGOLD RESOURCES LTD.

Rhea-AI Summary

Agnico Eagle Mines (NYSE/TSX: AEM) has completed a transaction acquiring 8,700,000 common shares of ONGold Resources (TSXV: ONAU), representing approximately 15.0% ownership on a non-diluted basis. The acquisition occurred through an asset purchase agreement between Yamana Gold Ontario (Agnico Eagle's subsidiary) and ONGold's subsidiary. The deal includes investor rights allowing Agnico Eagle to: maintain its pro rata ownership through participation in equity financings, acquire up to 19.99% ownership interest, and nominate board members under certain conditions. Prior to this transaction, Agnico Eagle held no shares in ONGold.

Positive

• Acquired 15% ownership stake in ONGold Resources
• Secured rights to maintain ownership percentage through future equity financings
• Option to increase ownership up to 19.99%
• Obtained board nomination rights

Negative

• None.

Insights

M&A Analyst

The strategic acquisition of a 15% stake in ONGold Resources represents a calculated move into early-stage exploration opportunities. The transaction structure, involving asset-for-equity swap rather than cash, demonstrates efficient capital deployment while maintaining operational flexibility. The investor rights agreement, particularly the anti-dilution and board nomination provisions, provides Agnico Eagle with significant strategic advantages.

The right to maintain up to 19.99% ownership through top-up rights is particularly noteworthy, as it keeps Agnico Eagle below the 20% threshold that would trigger additional regulatory requirements while maintaining substantial influence. This structure allows Agnico Eagle to benefit from ONGold's exploration upside while limiting downside exposure.

Most telling is the board nomination right, which, despite current non-exercise intentions, positions Agnico Eagle for potential future strategic control. This follows industry consolidation patterns where major producers secure strategic positions in junior miners for future optionality.

Mining Industry Analyst

The deal structure reveals Agnico Eagle's sophisticated approach to portfolio optimization. By divesting certain assets to ONGold in exchange for equity, they're effectively converting non-core assets into a strategic position in an exploration-focused entity. This allows them to maintain exposure to potential upside while reducing direct operational overhead.

The 15% ownership level is strategically chosen - it's large enough to have meaningful influence but small enough to maintain flexibility. The agreement's structure suggests these assets likely have exploration potential that might be better realized under a focused junior explorer's management, while Agnico Eagle retains participation rights in future value creation.

The absence of immediate board nomination intentions, despite having the right, indicates a preference for passive oversight initially, allowing ONGold operational autonomy while maintaining the option for more active involvement if warranted by future developments.

Stock Symbol:  AEM (NYSE and TSX)

TORONTO, Dec. 23, 2024 /PRNewswire/ - Agnico Eagle Mines Limited (NYSE: AEM) (TSX: AEM) ("Agnico Eagle") announced today that it has completed a transaction with ONGold Resources Ltd. (TSXV: ONAU) ("ONGold") which resulted in Agnico Eagle acquiring 8,700,000 common shares ("Common Shares") of ONGold.

On November 25, 2024, Yamana Gold Ontario Inc. ("Yamana"), a wholly-owned subsidiary of Agnico Eagle, and 10215825 Manitoba Ltd. (the "Buyer"), a wholly-owned subsidiary of ONGold, entered into an asset purchase agreement, pursuant to which the Buyer agreed to purchase certain assets from Yamana in exchange for, among other things, the issuance of Common Shares to Agnico Eagle (the "Transaction"). On December 20, 2024, the Transaction was completed, which resulted in Agnico Eagle acquiring 8,700,000 Common Shares.

Agnico Eagle currently owns 8,700,000 Common Shares, representing approximately 15.0% of the issued and outstanding Common Shares on a non-diluted basis. Prior to the closing of the Transaction, Agnico Eagle did not own any Common Shares.

In connection with closing of the Transaction, Agnico Eagle and ONGold entered into an investor rights agreement pursuant to which ONGold granted Agnico Eagle certain rights, provided that Agnico Eagle maintains certain ownership thresholds in ONGold, 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 ONGold at the time of such financing or acquire up to a 19.99% ownership interest in ONGold; and (b) 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 ONGold to eight or more directors, two persons) to the board of directors of ONGold.

Agnico Eagle acquired the Common Shares as consideration for the sale of certain assets in connection with the Transaction. Agnico Eagle may, from time to time, acquire additional Common Shares or other securities of ONGold or dispose of some or all of the Common Shares or other securities of ONGold 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. ONGold's head office is located at 120 Adelaide Street West, Suite 1410, Toronto, Ontario M5H 1T1.

About Agnico Eagle

Agnico Eagle is a Canadian based and led senior gold mining company and the third largest gold producer in the world, 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.

Forward-Looking Statements

The information in this news release has been prepared as at December 23, 2024. 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, Agnico Eagle's acquisition or disposition of securities of ONGold in the future.

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 percentage stake did Agnico Eagle (AEM) acquire in ONGold Resources?

Agnico Eagle acquired 8,700,000 common shares, representing approximately 15.0% ownership stake in ONGold Resources on a non-diluted basis.

When did Agnico Eagle (AEM) complete the ONGold Resources acquisition?

Agnico Eagle completed the acquisition of ONGold Resources shares on December 20, 2024.

What rights did Agnico Eagle (AEM) receive in the ONGold deal?

Agnico Eagle received rights to participate in equity financings, maintain pro rata ownership, acquire up to 19.99% ownership interest, and nominate board members.

How many board members can Agnico Eagle (AEM) nominate to ONGold's board?

Agnico Eagle can nominate one person, or two people if ONGold's board size increases to eight or more directors.

What was Agnico Eagle's (AEM) ownership in ONGold before the transaction?

Prior to the transaction, Agnico Eagle did not own any Common Shares in ONGold Resources.