Agnico Eagle Mines has announced the friendly acquisition of O3 Mining in a C$1.67 ($1.17) per share cash transaction, valued at around C$204m.
O3 Mining’s key asset is the Marban Alliance property near Val d’Or in Québec’s Abitibi region, next to Agnico Eagle’s Canadian Malartic complex.
The Marban Alliance property, which includes the Marban deposit, is an advanced exploration project with the potential for an open-pit mining operation.
This project could mirror the operations of Agnico Eagle’s Barnat open pit at the Canadian Malartic complex.
O3 Mining has reported 52.4mt of indicated mineral resources at the Marban pit with an average grade of 1.03 grams per tonne (g/t) of gold, amounting to 1.7 million ounces of gold.
Additionally, there are inferred mineral resources of 1mt, grading 0.97g/t of gold, totalling 32,000oz of gold.
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O3 Mining’s holdings also encompass the entirety of the Alpha and Kinebik properties.
Agnico Eagle president and CEO Ammar Al-Joundi said: “Consistent with our regional strategy, this transaction is a tuck-in of the Marban deposit to our Canadian Malartic complex.
“The Marban deposit is expected to be complementary to other ‘Fill-the-Mill’ opportunities at Canadian Malartic, further improving the production profile at a long-life, world-class asset.
“Our extensive operation, exploration and community experience is expected to enhance the value generated from the Marban Alliance property and unlock further potential at our Abitibi platform. We are looking forward to working with our partners and all stakeholders in the region as we continue to advance this opportunity.”
The integration of the Marban Alliance property into Agnico Eagle’s Canadian Malartic land package is expected to generate considerable synergies by utilising Agnico Eagle’s regional operational expertise and infrastructure.
This includes the Canadian Malartic mill, as well as the existing open-pit workforce and equipment fleet.
O3 Mining president and CEO José Vizquerra said: “The all-cash offer at a significant premium to market is an excellent outcome for our shareholders and is validation of the efforts made by the O3 Mining team.
“Having diligently advanced the Marban Alliance project over the past five years, the timing is right for O3 Mining to sell to a more experienced operator that can efficiently navigate the project through permitting and construction.
“This represents a substantial non-dilutive alternative to shareholders. We believe Agnico Eagle is the gold standard in the precious metals space – it not only has the financial strength and the mining expertise to advance the Marban Alliance project but shares our commitment to work in partnership with stakeholders in a socially responsible manner.”
In October this year, Agnico Eagle Mines invested C$55m in ATEX Resources, acquiring 33.86 million units at C$1.63 each in a major private placement.
