RMX... Canaccord Morning Coffee...
Rubicon Minerals* (RMX : TSX : $3.94), Net Change: 0.88, % Change: 28.76%, Volume: 6,595,728
Agnico-Eagle Mines* (AEM : TSX : $54.14), Net Change: -2.88, % Change: -5.05%, Volume: 1,469,222
It's your move…Rubicon soared on news that Agnico-Eagle is acquiring a 9.2% stake of Rubicon through a $70 million private
placement. Under the terms of the deal, Agnico will buy about 21.7 million Rubicon shares for $3.23 per share, a 5.5% premium
to Rubicon's closing price of $3.06 on Wednesday. Rubicon owns the Phoenix gold project in Red Lake, Ontario, one of
Canada's most prolific gold producing districts, that is also home to Goldcorp's (G) Red Lake mine. "This really makes sense
and ties right into our strategy," Agnico's Chief Executive Sean Boyd told Reuters. "We are going to continue this strategy
going forward to try to identify and get more involved in things that may work down the road." Both parties have also agreed to
negotiate a technical services agreement that will provide Rubicon Minerals access to Agnico's geological and engineering
mining team to help advance Rubicon's high-grade Phoenix deposit in Red Lake. A Bay Street analyst commented that he is not
surprised with the move as it is in line with the company's strategy. Agnico has taken an interest in Red lake Camp for some
time; it previously had an equity interest in Gold Eagle, also located in the Red Lake camp. While interest from a major is
certainly significant, the share price reaction seems to suggest the market is speculating that Goldcorp may respond to Agnico’s
strategic purchase in its domain. Recall, Goldcorp did this a few years back when Agnico strategically invested in Gold Eagle(Bruce Channel deposit), ultimately it was hastily acquired by Goldcorp a few months later. Notably, Premier Gold (PG) also
got a lift on Thursday as Red Lake came into focus. Premier's Marquis Property in Red Lake is a 49% interest in the Rahill-
Bonanza Project, a joint venture with Red Lake Gold Mines, an affiliate of Goldcorp. |
