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Agnico Eagle (AEM) Makes Additional Investment in Cartier

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Agnico Eagle Mines Limited (AEM - Free Report) agreed to subscribe to 14 million units of Cartier Resources Inc. in a non-brokered private placement at 13 Canadian cents per unit for total consideration of roughly C$1.82 million. Each unit consists of one common share of Cartier and one-half of one common share purchase warrant of Cartier. Each warrant entitles the holder to acquire one common share at 16 Canadian cents for 36 months after the closing date of the private placement.

The closing is anticipated to take place on or about May 20, 2022, and is subject to certain conditions. Agnico Eagle is acquiring the common shares and warrants for investment purposes.

The company currently owns 35,292,536 common shares, reflecting roughly 13.33% of the issued and outstanding common shares on a non-diluted basis. Post the private placement, Agnico Eagle will own 49,292,536 common shares and 7,000,000 warrants, representing around 17.7% of the issued and outstanding common shares on a non-diluted basis and 19.72% of the issued and outstanding common shares on a partially-diluted basis assuming exercise of the warrants.

Agnico Eagle and Cartier inked an investor rights agreement dated Dec 22, 2016. Per the connection with the private placement, the companies will enter into an amended and restated investor rights agreement after which Agnico Eagle will be entitled to, among other things, the right to participate in certain equity financings by Cartier. AEM will be able to acquire up to a 19.97% ownership interest, and the right to nominate one person to the board of Cartier.

Shares of Agnico Eagle have declined 30.8% in the past year compared with a 21.4% fall of the industry.

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The company, in its last earnings call, stated that it expects payable gold production for 2022 in the range of 3.2-3.4 million ounces. It also projects total cash costs per ounce of $725-$775 and all-in sustaining costs (AISC) of $1,000-$1,050 per ounce for 2022.

The forecast for 2022 capital expenditures is pegged at roughly $1.4 billion.

 

Zacks Rank & Key Picks

Agnico Eagle currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Allegheny Technologies Inc. (ATI - Free Report) , Albemarle Corporation (ALB - Free Report) and Cabot Corporation (CBT - Free Report) .

Allegheny has a projected earnings growth rate of 869.2% for the current year. The Zacks Consensus Estimate for ATI's current-year earnings has been revised 27.3% upward in the past 60 days.

Allegheny’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 128.9%, on average. ATI has gained around 19.5% in a year and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Albemarle has a projected earnings growth rate of 175% for the current year. The Zacks Consensus Estimate for ALB’s current-year earnings has been revised 85.8% upward in the past 60 days.

Albemarle’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 22.5%. ALB has gained 49.4% in a year. The company flaunts a Zacks Rank #1.

Cabot, currently sporting a Zacks Rank #1, has an expected earnings growth rate of 21.5% for the current year. The Zacks Consensus Estimate for CBT's earnings for the current year has been revised 5.2% upward in the past 60 days.

Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 13.7% over a year.