Yamana Gold Inc. (NYSE:AUY) has signed a deal that will facilitate the sale of its exploration assets in Canada to Agnico Eagle Mines Ltd (USA) (NYSE:AEM).
The deal was revealed on Thursday when Agnico Eagle revealed the development to its shareholders, notifying them that it secured a deal to acquire the Canadian assets from Yamana Gold. The latter will sell its 50 percent interest stake in the exploration assets that it owns in a Canadian firm called Malartic Corp. The recently announced deal is reportedly valued at around $ $162.5 million.
The new deal will also include the sale of Yamana’s assets in the Kirkland Lake project and the Hammond Reef Gold project. The announcement also noted that Yamana Gold would continue to own and operate the Canadian Malartic mine and other related assets together with Angico Eagle. The two firms currently own Canadian Malartic Corp. through a 50 percent joint venture deal and they also jointly oversee the operations mine. However, Agnico Eagle will own 100 percent of the Canadian Malartic Corporation once the deal is completed.
“The purchase of the CMC asset portfolio enhances our longer-term development pipeline, and provides us with potential production growth post our current mine buildout in Nunavut,” stated Agnico Eagle’s CEO, Sean Boyd.
Agnico Eagle’s acquisition n of the assets will most likely have a significant impact on its market value over the next few months and the same can be said for Yamaha Gold. In fact, one of the reasons that Yamana is selling the assets is because the company recently completed its technical and strategic reviews and the assets were not contributing to the cash flow. The firm decided to let go of the assets and pursue more value through the sale of its interest rather than through development.
The sale of the assets to Agnico Eagle is expected to close within the first quarter of 2018 though exact dates have not been disclosed. Significant financial stability from the deal is expected in both firms over the next two to three years.
Yamana Gold stock closed Tuesday’s trading session at $3.11.