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Agnico Eagle (AEM) Inks Deal to Purchase TMAC Resources

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Agnico Eagle Mines Limited (AEM - Free Report) recently signed an agreement to acquire TMAC Resources Inc. Per the agreement, Agnico Eagle will acquire all outstanding common shares of TMAC for a price of C$2.20 per share in cash.

This amount reflects an increase of C$0.45 per share or 26% premium compared with the offer of C$1.75 per share by Shandong. Moreover, it represents a 66% premium to TMAC’s 20-day volume-weighted average price as of Jan 4, 2021.

Per the terms of the agreement, the total equity value of the deal amounts to roughly C$286.6 million (around $225 million). Agnico Eagle agreed to retire outstanding debt and deferred interest as well as fees of TMAC.

This acquisition will provide Agnico Eagle an opportunity to bring forward its extensive northern operational and community experience to the Hope Bay Mine and the Kitikmeot Region of Nunavut. The company looks forward to integrate with TMAC and advance its exploration and expansion initiatives to realize the full potential of the Hope Bay Mine and its unexplored land area.

Shares of Agnico Eagle have gained 29.6% in the past year compared with 33.8% rise of the industry.

Agnico Eagle, in its third-quarter call, reaffirmed its guidance for 2020. The company expects gold production for 2020 between 1.68 million and 1.73 million ounces. Management expects total cash costs per ounce of $740-$790 and AISC of $1,025-$1,075 per ounce. Capital expenditures are predicted between $720 million and $740 million compared with the prior guidance of $690 million.

 

Zacks Rank & Key Picks

Agnico Eagle currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic materials space are Fortescue Metals Group Limited (FSUGY - Free Report) , BHP Group (BHP - Free Report) and Impala Platinum Holdings Limited (IMPUY - Free Report) .

Fortescue has a projected earnings growth rate of 73.5% for the current fiscal. The company’s shares have surged 176.3% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BHP has an expected earnings growth rate of 43.3% for the current fiscal. The company’s shares have gained around 34.3% in the past year. It currently flaunts a Zacks Rank #1.

Impala has an expected earnings growth rate of 131.7% for the current fiscal. The company’s shares have surged around 30.6% in the past year. It currently sports a Zacks Rank #1.

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