Agnico boosts stake in Maple Gold as companies end Quebec JV

Agnico Eagle Mines  (TSX: AEM; NYSE: AEM) has raised its stake in Maple Gold Mines (TSXV: MGM) to just under 20% after the companies ended their 50-50 joint venture at Douay and Joutel in Quebec last week.

As part of the deal to dismantle the JV, Agnico bought roughly 33.8 million shares in a private placement priced at 12¢ per share for gross proceeds of $4.05 million.

By market close Monday, Maple Gold traded at 8¢ per share, its highest year-to-date, for a market capitalization of $27.3 million.

Prior to placement, Agnico held approximately 40.9 million or 11.97% of Maple’s issued stock. It now owns 19.99% on a non-diluted basis.

Under the companies’ agreement last week to end their joint venture in Quebec, Agnico transferred the Douay and Joutel properties to Maple in exchange for a future purchase option on these assets should certain development milestones be achieved.

The net proceeds of the private placement will fund exploration on the two properties, both located along the Casa Berardi-Douay gold trend, a structure within the prolific Abitibi greenstone belt known to host world-class gold deposits such as Beattie and the Canadian Malartic.

At the time, Maple Gold’s CEO Kiran Patankar called the JV restructuring a “transformative, value-unlocking transaction” that resulted from teamwork between the companies, and it represents a “win-win for both parties” for the continued advancement of the two projects.

Douay is a district-scale 357-sq.-km property with an indicated resource of 10 million tonnes grading 1.59 grams gold per tonne for 511,000 contained ounces. Another 76.7 million inferred tonnes averages 1.02 grams gold for 2.5 million contained ounces.

The Joutel project, located south of the Douay property, is host to Agnico’s past-producing mine complex, with total historical gold production of 1.1 million oz. at an average grade of 6.5 grams gold per tonne from 1974 to 1993.

“With our balance sheet strengthened and our planned 2024 exploration programs now fully financed, we are excited to follow up on the significant resource expansion and discovery potential across our district-scale gold projects in Quebec,” Patankar said in Monday’s news release.