Agnico Eagle Mines Limited AEM has revealed its recent investments in Belo Sun Mining Corp. and Pershimco Resources Inc.
The company announced that it has agreed to subscribe for 62,500,000 Belo Sun common shares in a non-brokered private placement at the cost of 24 Canadian cents per Belo Sun Share for total consideration of C$15,000,000. The placement is expected to close on or by May 21, 2015.
Upon the closure of the placement, Agnico Eagle will hold 62,500,000 Belo Sun Shares, which will represent 17.38% of the issued and outstanding Belo Sun Shares. Also, Agnico Eagle and Belo Sun will enter into an investor rights agreement.
As per the deal, Agnico Eagle will hold the right to appoint one director. In case the board is increased to ten or more directors, then Agnico Eagle can appoint an additional director and participate in some future equity financings by Belo Sun in order to maintain its pro rata investment in the later, given that Agnico Eagle continues to hold not less than 10% of the then issued and outstanding shares of Belo Sun on a non-diluted basis.
Agnico Eagle also subscribed for an additional 13,154,243 class "A" common shares of Pershimco in an earlier announced brokered private placement at a price of 17 Canadian cents per Pershimco Share for total consideration of around C$2,236,221. The Pershimco shares subscribed for represent roughly 4.97% of the issued and outstanding Pershimco Shares on a non-diluted basis.
Agnico Eagle now holds 52,754,243 Pershimco shares, representing about 19.93% of the issued and outstanding shares of Pershimco on a non-diluted basis.
The acquisitions of Belo Sun and Pershimco shares are in line with Agnico Eagle’s initiative of making investments in companies that possess quality exploration and development projects in favorable mining jurisdictions. The company can sell off or acquire more shares of Belo Sun and Pershimco at any time, depending on the market conditions.
Agnico Eagle currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the gold mining industry include Primero Mining Corp. PPP, Newmont Mining Corporation NEM and AngloGold Ashanti Ltd. AU. While Primero Mining sports a Zacks Rank #1 (Strong Buy), Newmont and AngloGold Ashanti carry a Zacks Rank #2 (Buy).
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Click to get this free report NEWMONT MINING (NEM): Free Stock Analysis Report ANGLOGOLD LTD (AU): Free Stock Analysis Report AGNICO EAGLE (AEM): Free Stock Analysis Report PRIMERO MINING (PPP): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research