Agnico Eagle takes up 13% stake in Chilean explorer ATEX Resources
Agnico Eagle Mines (NYSE: AEM) (TSX: AEM) has taken up a 13% stake in copper-gold explorer ATEX Resources (TSXV: ATX) with an investment totalling C$55 million ($40 million), which the latter will use to advance its flagship Valeriano project in Chile’s Atacama region.
Under a private placement agreement announced on Friday, Agnico will purchase approximately 33.9 million units of ATEX at C$1.63 per unit, representing a 15% premium over ATEX’s stock price from a week ago and 12.4% over its previous day’s closing price.
By 11:10 a.m. ET in Toronto, ATEX Resources traded 11% higher at C$1.61, having touched a 52-week high of C$1.66 a share earlier in the session. The company has a market capitalization of C$336.2 million ($242.3 million)
The Agnico investment will support ATEX’s exploration activities at the Valeriano project. The property covers approximately 61.3 sq. km and is host to a large copper-gold porphyry deposit, below a near-surface oxidized epithermal gold deposit that extends from surface to a depth of 100 metres.
Since 2021, ATEX has completed multiple phases of drilling to test the mineralization at Valeriano, beginning with the gold oxide deposit in the initial phase then extending to the porphyry system.
Last year, it produced a mineral resource estimate totalling 1.44 billion tonnes grading 0.49% copper and 0.21 g/t gold, all in the inferred category. The porphyry deposit makes up most of this resource — 1.41 billion tonnes at 0.50% copper and 0.20 g/t — and contains a higher-grade core totaling 200 million tonnes at 0.62% copper and 0.29 g/t gold.
“This transaction results in ATEX being well capitalized through 2025 to execute on our future drill programs and to continue defining this deposit while also continuing to de-risk and conduct engineering studies,” commented ATEX CEO Ben Pullinger in a news release.
In addition to the private placement, the company also announced that it will repay the entire outstanding balance on its credit facility totaling $15 million through the issuance of equity. A total of 7.9 million units at the same price of the offering (C$1.63) and 5.5 million shares priced at C$1.42 each will be issued to its lenders (Firelight Investments, Beedie Capital and Trinity Capital Partners).
Moreover, ATEX has arranged a private placement with recently appointed board member Rick McCreary, who will purchase C$500,000 worth of units, also at the same price of the private placement.
Upon closing of the above transactions, Agnico would become one of ATEX’s largest shareholders, with a shareholding of 13% on an undiluted basis.
