What follows is an excerpt from Canaccord Wealth Management's Morning Coffee newsletter.
Agnico-Eagle Mines Ltd. (TSX: T.AEM, Stock Forum) (NYSE: AEM, Stock Forum) announced that it has agreed to subscribe for 6.25 million units of Kootenay Silver Inc. (TSX: V.KTN, Stock Forum) in a non-brokered private placement at a price of $0.76 per unit, for a total consideration of $4.75 million.
Each unit is comprised of one common share of KTN and one-half of one common share purchase warrant of KTN, entitling AEM to acquire one common share at a price of $1.08 for a period of two years from the date of closing.
On closing the private placement, AEM will hold 6.25 million common shares and 3.12 million warrants, representing 9.96% of the issued and outstanding common shares on a non-diluted basis and 14.2% of the common shares, assuming exercise of the warrants, Kootenay said in a press release.
AEM stated that it is acquiring the units for investment purposes. KTN’s flagship property is the former producing Promontorio Silver mine in Sonora State, Mexico. The most recent updated NI 43-101 mineral estimate on Promontorio contains a combined measured and indicated silver resource of 61.7 million silver equivalent ounces and an additional 14.5 million silver equivalent ounces in the inferred category.
AEM’s strategic investment in KTN is the gold major’s third such investment in a junior in the last six weeks (Sulliden Gold Exploration Ltd. (TSX: T.SUE, Stock Forum), April 9 for $24 million and ATAC Resources Ltd. (TSX: V.ATC, Stock Forum), March 19 for $12.9 million).