Each one in plain English, with the numbers worked through for a shareholder.
13 Oct 2011business combination● Neutral
Agnico-Eagle formally launched its take-over bid for Grayd at C$2.80 per share, following up the deal announced in September. Grayd holders can take cash or 0.04039 of an Agnico share plus $0.05, subject to proration; cash is capped at about C$92 million and shares at about 2.7 million (about 1.4% of Agnico's fully diluted shares). The offer needs at least 66 2/3% of Grayd shares tendered and is open until 5:00 p.m. Toronto time on November 18, 2011. Grayd's board unanimously recommends it, supported by a Desjardins Securities fairness opinion.
Agnico-Eagle agreed (announced Sept 19, 2011) to offer C$2.80 per share for Grayd Resource Corporation, a deal valued at about C$275 million, with holders choosing cash or 0.04039 of an Agnico share plus $0.05, subject to proration. Cash is capped at about C$92 million and share issuance at about 2.7 million shares (about 1.4% of Agnico's fully diluted shares). Grayd's La India project is about 70 km from Pinos Altos, and the offer needs at least two thirds of Grayd shares tendered. Agnico also agreed to lend Grayd up to C$5 million.
Agnico-Eagle's board approved a 2011 quarterly dividend of $0.16 per share ($0.64 per year), a 256% increase, first payable March 15, 2011 to holders of record March 1, 2011. The company also forecast 2011 gold production of 1.13-1.23 million ounces, rising to about 1.5 million ounces by 2014. Kittila expansion and the Meliadine project are not yet in that plan.
Agnico-Eagle reported on its 2010 exploration (press release dated Dec 15, 2010) and set a record $145 million exploration budget for 2011, up from $110 million in 2010. It expects year-end 2010 gold reserves of 20-21 million ounces, up from 18.4 million at the 2009 level. The release includes new drill results at Meliadine (acquired July 2010), Kittila and Goldex, and continues the 2009 exploration threads at Kittila.
Agnico-Eagle gave an exploration update (press release dated Nov 30, 2009): drilling at Kittila in Finland found new gold intersections at depth, and drilling at Pinos Altos in Mexico was positive for the Sinter and Cubiro zones. The $54 million 2009 program was raised about 10%, with about 265 km drilled through October 2009. A first resource estimate and feasibility study for Sinter are expected in 2010, and a Kittila expansion study is expected in early 2010.
