Agnico Eagle Signs Deal to Acquire Cayden Resources for $186.8 Million
Canadian mining company Agnico Eagle Mines Limited (TSX:AEM) (NYSE:AEM) has agreed to purchase exploration company Cayden Resources Inc. (TSX-V:CYD) for $186.8 million in a mostly stock deal.
The sale, which was announced on Monday, will include Cayden’s two primary exploration projects - the El Barqueno and the Morelos Sur properties in Mexico - as well as 100 percent of the company’s issued and outstanding common shares.
"This acquisition is consistent with our long-term strategy of acquiring promising, early stage gold projects where we can add value through focused exploration and mine building,” sais Angico Eagle CEO Sean Boyd.
"This strategy has served us well in Mexico, and we believe that the Cayden properties are a very good fit with our existing southern operations and skill sets."
The deal calls for Agnico to pay 0.09 of a share plus one cent in cash for each Cayden share, including issuable shares under outstanding options and warrants.
The El Barqueno project covers roughly 41,000 hectares in the Guachinango gold district in Jalisco State, Mexico and hosts an abundant of epithermal bonanza type gold vein and disseminated stockwork system.
The Morelos Sur site, which covers 13,000 hectares in the Guerrero gold belt in the country’s Guerrero State, consists of three properties: La Magnetita, Tenantla and Las Calles.
"The property has tremendous exploration upside and several prospective zones that we believe can ultimately support heap leach and/or milling operations, which would allow us to build another meaningful business in Mexico," said Tim Haldane, Agnico-Eagle Mines US and Latin America operations senior vice-president.
The acquisition is subject to approval from Cayden security holders, Mexican anti-trust and other regulatory and court approvals. The deal is expected to be completed before the end of the year.
"We are pleased with the value that this transaction delivers to our shareholders and are excited at the prospect of Agnico applying its resources to the advancement of El Barqueño and the results that will surely follow," Cayden Resources CEO and president Ivan Bebek said.
Earlier this year, Agnico partnered with Yamana Gold (TSX:YRI) to acquire Osisko Mining Corp. for $3.9 billion.
Zimbabwe targets £8.8bn mining industry by 2023
Zimbabwe’s government plans to fast-track exploration, evaluation and digitalisation of selected reserved mining areas under the Ministry of Mines and Mining Development as part of wider measures to achieve a £8.8 billion mining industry by 2023, according to a senior government minister.
Information Minister Monica Mutsvangwa said other plans include stopping the issuance of special grants in the reserved areas under the Ministry of Mines and Mining Development until the exploration and evaluation is complete and a robust value addition program for diamonds is implemented.
Mutsvangwa was speaking at a post-cabinet media briefing on December 15.
She adds that the issuance and renewal of special grants for energy should also be based on the financial and technical capacity to value add all types of coal, as well as for ideal exploration of Coal Bed Methane.
For renewal of special grants, consideration should take into account the period the Special Grant has been held as well as plans with milestones for value addition of the special grant, Mutsvangwa says. She adds that the Zimbabwean government expects gold to drive the mining sector in order to achieve the ambitious target, with the precious metal expected to contribute approximately £2.96 billion to the overall target.
Mining is one of Zimbabwe’s major contributors to its economy, alongside agriculture, which is the mainstay. The mining sector accounted for more than 60 percent of the country’s foreign currency receipts in 2019, and contributed around 16 percent to national Gross Domestic Product, the Chamber of Mines says.
The country’s mining industry is focused on a diverse range of small to medium mining operations. The most important minerals produced in Zimbabwe include gold, asbestos, chromite, coal and base metals.
Zimbabwe expects its economy to expand by 7.4 percent in 2021 from a projected contraction of 4.5 percent this year, due to the effects of drought and the COVID-19 global pandemic.
When presenting the 2021 National Budget in November this year, Finance and Economic Development Minister, Professor Mthuli Ncube, said that the mining sector is projected to rebound by 11 percent next year after surviving a COVID-19 induced shock that saw the sector contract by 4.7 percent in 2020. In September, mining bans in national parks were introduced, according to news agencies.
He added that the National Budget would allocate £1 billion towards the operations of the ministry for planning, promotion and exploration, data capturing, and automation, among other key mining processes.
Other factors necessary for the achievement of the £8.8 billion target include a stable macroeconomic environment, policy consistency, and availability of long-term capital to fund mining projects along the entire mineral value chain, the minister said.
Stopping "illicit financial flows" from gold smuggling is another key issue to address, according to media reports.