Agnico Eagle Mines Ltd. has agreed to acquire all of the Canadian exploration assets of Canadian Malartic Corp. (CMC), including the Kirkland Lake and Hammond Reef Gold projects. CMC is a corporation 50/50 owned and operated by Agnico Eagle and Yamana Gold. The transaction is being structured as an asset deal, whereby Agnico Eagle will acquire all of Yamana’s indirect 50% interest in the exploration assets for $162.5 million in cash. The transaction will not affect the Canadian Malartic mine and related assets, including Odyssey, East Malartic, Midway, and East Amphi, which will continue to be jointly owned and operated by the Agnico Eagle and Yamana through CMC and the Canadian Malartic General Partnership.

“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,” said Sean Boyd, CEO, Agnico Eagle Mines. “The Kirkland Lake property package enhances our current mineral reserves and offers near-term exploration upside, while the Hammond Reef project provides good optionality to a potential rise in the gold price.”

From Yamana’s perspective, these exploration assets are non-cash flow generating and, after the company completed strategic and technical reviews, it concluded that more immediate value would be derived through selling its interest rather than development.

Under the proposed transaction, Agnico Eagle will acquire all of CMC’s Canadian exploration assets located in Ontario and Quebec, except those associated with Canadian Malartic. The Kirkland Lake project covers approximately 27,291 hectares in northeastern Ontario and mineral reserves and mineral resources have been outlined on several properties. Key deposits in the Kirkland Lake area include Upper Beaver, Anoki and McBean, Amalgamated Kirkland (AK), and Upper Canada. Hammond Reef is an advanced stage gold project covering approximately 31,145 hectares in northwestern Ontario. It also contains well-defined mineral resources.

The transaction is expected to close during the first quarter of 2018.