Agnico Eagle Mines Limited (NYSE: AEM) (TSX: AEM) (“Agnico Eagle”) announced that it has agreed to subscribe for 33,869,939 units (“Units”) of ATEX Resources Inc. (TSXV: ATX) (“ATEX”) in a non-brokered private placement at a price of C$1.63 per Unit for total consideration of US$40,000,000 (approximately C$55,208,000). Each Unit is comprised of one common share of ATEX (a “Common Share”) and one-half of one common share purchase warrant of ATEX (each whole common share purchase warrant, a “Warrant”). Each Warrant entitles the holder to acquire one Common Share at a price of C$2.50 for a period of five years following the closing date of the private placement, subject to acceleration in certain circumstances. Closing is expected to occur on or about October 30, 2024 and is subject to certain conditions.
The investment in ATEX is consistent with Agnico Eagle’s historical practice of strategic equity investments in projects with high geological potential. It provides Agnico Eagle with exposure to an early stage, copper-gold exploration project in Chile, an established mining jurisdiction. The Company continues to focus on its portfolio of high-quality internal growth projects, and complements its pipeline of projects with a strategy of acquiring strategic toehold positions in prospective opportunities.
Agnico Eagle does not currently own any Common Shares or Warrants. On closing of the private placement, and after giving effect to two other share issuance transactions to be completed by ATEX concurrently with the private placement, Agnico Eagle will own 33,869,939 Common Shares and 16,934,969 Warrants, representing approximately 13.21% of the issued and outstanding Common Shares on a non-diluted basis and approximately 18.59% of the Common Shares on a partially-diluted basis, assuming exercise of the Warrants held by Agnico Eagle.
On the closing of the private placement, Agnico Eagle and ATEX will enter into an investor rights agreement, pursuant to which Agnico Eagle will be granted certain rights, provided Agnico Eagle maintains certain ownership thresholds in ATEX, 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 in ATEX at the time of such financing or acquire up to a 19.99% ownership interest, on a partially-diluted basis, in ATEX; 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 ATEX to ten or more directors, two persons) to the board of directors of ATEX.
Agnico Eagle is acquiring the Common Shares and 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 ATEX or dispose of some or all of the Common Shares, Warrants or other securities of ATEX that it owns at such time.
An early warning report will be filed by Agnico Eagle in accordance with applicable securities laws.
