Agnico Eagle Mines (TSE:AEM) announced Monday it plans to buy Mexico focused exploration company Cayden Resources (CVE:CYD) in a predominantly shares-based deal worth $205 million.
Agnico says the deal values Cayden at $3.79 per share- a premium of 42.5% to the Vancouver-based company's recent price performance on the venture exchange.
On the Toronto Stock Exchange, Agnico shares closed down 86 cents or 2.27% at $37.08 affording the company a $7.8 billion market value, while Cayden stock finished down 12 cents, or nearly 4% at $2.95, on a generally weak day for the sector. Cayden's stock has nearly tripled this year and the company enjoys a market capitalization of $147 million.
The maximum number of shares issuable by Agnico Eagle under the offer will be approximately 4.86 million, or approximately 2.3% of Agnico Eagle's outstanding shares on a fully diluted basis, according to the company statement.
"This acquisition is consistent with our long-term strategy of acquiring promising, early stage gold projects where we can add value through focused exploration and mine building," Agnico Eagle President and CEO Sean Boyd said in a statement.
"This strategy has served us well in Mexico and we believe that the Cayden properties are a very good fit with our existing southern operations and skill sets".
Top prize is Cayden's El Barqueno property, which covers roughly 41,000 hectares in the Guachinango gold district in Jalisco state.
Mine workings on the El Barque??o property go as far back as the 1550s. During the 1980's open pit mining was conducted in the area producing an estimated 250,000 ounces of gold.
Cayden also owns a 100% interest in the Morelos Sur property, which covers approximately 13,000 hectares in the Guerrero gold belt in Guerrero State.The deal, which is subject to approval by Cayden security holders, Mexican anti-trust and other regulatory approvals and court approval, is expected to close by the end of the year.
Toronto-based Agnico Eagle operates nine mines located in Canada, Finland and Mexico as well as exploration and development activities in each of those countries as well as in the United States.