SUE great news
SULLIDEN ANNOUNCES STRATEGIC INVESTMENT BY AGNICO-EAGLE MINES LIMITED
Agnico-Eagle Mines Ltd. has entered into a subscription agreement to make a strategic investment of $24-million into Sulliden Gold Corp. Ltd. through a non-brokered private placement of units. As a result of the transaction, Agnico-Eagle will own 9.96 per cent of Sulliden's issued and outstanding shares on a non-diluted basis.
Under the terms of the subscription agreement, Agnico-Eagle will purchase a total of 26,966,292 units at a price of 89 cents per unit. Each unit is composed of one common share and 0.7 of a common share purchase warrant. Each whole share purchase warrant will entitle Agnico-Eagle to acquire one common share of the company at a price of $1.31 for a period of two years from the date of issuance. In the event that all warrants are exercised, an additional $24.73-million will be raised.
Sean Boyd, president and chief executive officer of Agnico-Eagle, commented: "Our investment highlights the quality and potential of Sulliden's Shahuindo project. We also view this as an opportunity to gain exposure to another jurisdiction with a well-established mining culture. We look forward to participating in the advancement of Shahuindo towards production."
Peter Tagliamonte, chairman and chief executive officer of Sulliden, commented: "We are very pleased to welcome Agnico-Eagle as a strategic shareholder. Agnico-Eagle is a world-class mining company and a leader in corporate social responsibility with a proven track record of excellence in the development and operation of global mines. Agnico-Eagle was very thorough with its technical review, and we believe this investment represents a strong endorsement of the quality and potential of the Shahuindo project. We look forward to the continued positive development of our project with the ongoing participation of local communities, municipalities and government departments. The $24-million investment by Agnico-Eagle, in conjunction with the previously announced debt facility of $125-million, puts us in a strong financial position to advance Shahuindo."
The closing of the private placement is expected to occur on or about April 12, 2013, and is subject to all necessary regulatory approvals. The common shares issuable pursuant to the offering (including the common shares issuable upon the exercise of the warrants) are subject to a mandatory four-month hold period. Upon closing of the private placement, subject to certain conditions, Agnico-Eagle will have the right to participate in any future equity offerings by the company in order to maintain its pro rata investment in the company.
The company intends to use the proceeds of the transaction to finance the development of the Shahuindo project and for general working capital purposes.
Sulliden's Shahuindo project is located in a world-class gold-producing belt in northern Peru. In September, 2012, the company completed a feasibility study highlighting a straightforward open pit mine with heap leach recovery. The capital requirement of the mine is an estimated $131.8-million, which would support a mining rate of 3.65 million tonnes per year and annual production of approximately 90,000 gold-equivalent ounces at average cash operating costs of $552 per ounce.