Tuesday 6th December 2016

Resource Clips



Grayd VP Exploration Hans Smit on $275M acquisition by Agnico-Eagle

Resource Clips - essential news on junior gold mining and junior silver miningAgnico-Eagle Mines Ltd TSX:AEM and Grayd Resource Corp TSXV:GYD announced Agnico-Eagle’s acquisition of Grayd. Under the agreement Agnico-Eagle will offer $2.80 per share for all of Grayd’s outstanding common shares. The transaction is valued at approximately $275 million on a fully-diluted basis. The offer of $2.80 per share represents a premium of 65.7% to the volume-weighted average price of Grayd shares for the 20-day period ending Sept. 16, 2011.

Grayd shareholders may receive either $2.80 in cash or 0.04039 of an Agnico-Eagle share and $0.05 in cash, in each case subject to pro-ration. The maximum amount of cash payable by Agnico-Eagle will equal one-third of the total consideration (approximately $92 million). The maximum number of shares issuable by Agnico-Eagle will be approximately 2.7 million (based on the number of Grayd shares outstanding on Sept. 19, 2011 on a fully-diluted basis) or approximately 1.4% of Agnico-Eagle’s outstanding shares on a fully diluted basis.

Grayd owns La India Project in Sonora State, Mexico, which has a 2010 resource estimate of 26.8 million tonnes grading 0.88 g/t gold measured and indicated and 19.7 million tonnes grading 0.8 g/t gold inferred. Grayd recently discovered the Tarachi Gold Prospect 10 kilometres from La India.

We think it’s excellent risk reward for our shareholders, and we think it benefits Agnico too. They’re a bigger company, and they can put this into production faster and with more horsepower than we can—Hans Smit

VP of Exploration Hans Smit tells ResourceClips.com, “La India certainly attracted Agnico. We’ve got both a potentially near-development resource there and lots of blue-sky potential. La India really isn’t that far from their existing mine, Pinos Altos. They know how to operate in Mexico; they like Mexico. We’ve got a resource with a solid scoping study and the start of feasibility, as well as potential to increase. Many components of our scoping were better investigated than a normal scoping study.

“Right now we have a month to get all the circulars out, and then the offer’s open for 35 business days after that. There are ways to extend the deadline.

“The directors and officers including myself are very much for this,” Smit emphasizes. “We think it’s excellent risk reward for our shareholders, and we think it benefits Agnico too. They’re a bigger company, and they can put this into production faster and with more horsepower than we can. So far the response from shareholders has been very positive.

“Our stock went up quite a bit. It’s now just slightly below the offer price, so people are obviously figuring it’s going to go ahead. They’re not leaving much difference between the stock price and the offer price,” he points out.

“It will take at least a couple of months for this to go through, so Grayd will keep operating. As they take over, assuming it all goes ahead, we’re going to make sure the hand-off goes smoothly. We’re not just going to say, ‘See you later, we’re out of here.’ We put a lot of effort into this, so we’re definitely going to make sure Agnico is completely up on everything. They were very complimentary about the work to date. But we’ll make sure they’re starting from where we left off, not having to re-do stuff.

“I think it’s a great deal for the shareholders,” Smit says. Referring to the management and directors, he adds, “That’s what we are too. We don’t have a lot of perks or anything. We’re just happy shareholders like everyone else.”

View Company Profile

Contact:
Agnico-Eagle Mines Ltd
Investor Relations
416.947.1212

Grayd Resource Corp
Marc A. Prefontaine
President/CEO
or Daniel G. McIntyre
Manager of Corporate Communications
604.681.7446

by Greg Klein

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