Agnico buys 14% of Cascadia Minerals in Yukon

Agnico Eagle Mines (NYSE, TSX: AEM) is buying 14% of Cascadia Minerals (TSXV: CAM) to support the Carmacks copper-gold project in the Yukon and regional exploration.

Cascadia’s stock sales — totalling about $8.9 million, including $7.6 million from Agnico — will provide additional capital to advance its main Carmacks project in central Yukon, the junior said Monday. 

The company plans a 15,000-metre drill program this spring to upgrade a resource that in 2023 showed 36.3 million measured and indicated tonnes grading 0.81% copper and 0.26 gram gold per tonne for 651 million lb. contained copper and 302,000 oz. gold.

Agnico’s upfront investment, rising to about $12.3 million if all warrants are exercised to reach a 19.9% stake, gives it a low-cost entry into Yukon’s Stikine Terrane. The companies said they are forming a strategic alliance to make gold-copper porphyry discoveries in the region and scale up Agnico’s position as Carmacks advances.

Stock gains 

Shares in Cascadia gained 27% to 26¢ apiece Monday afternoon in Toronto, near the 52-week high of 29¢ seen this month. The company has a market capitalization of $44.8 million. Meanwhile, Agnico’s stock edged 0.3% lower to $267.38 per share for a $134-billion market capitalization.

The early-stage project over 180 sq. km near the past-producing Minto mine had a preliminary economic assessment completed in 2023. It outlines a $330 million post-tax net present value at a 5% discount rate and a 38% after-tax internal rate of return. 

Carmacks also has 2.9 million inferred tonnes grading 0.6% copper and 0.16 gram gold for 38 million lb. copper and 13,000 oz. gold, according to the 2023 report. 

“The strategic alliance will allow us to capitalize on our first-mover status in Yukon’s Stikine Terrane while advancing our flagship Carmacks property,” Cascadia CEO Graham Downs said in Monday’s release.

Details

Agnico said it has agreed to purchase more than 19.3 million units of Cascadia at a price of 26¢ per unit. Each unit contains one common share and half of a share purchase warrant that is exercisable at 32¢ per share. 

In addition, the Toronto-based gold miner said it would acquire another 10 million units at the same price from several parties that will be participating in a separate offering arranged by Cascadia. Under that flow-through offering, buyers of the units will pay 38.4¢ per unit to Cascadia. 

The alliance is to see Agnico fund Cascadia’s exploration over an initial three years. It may be followed by earn-in agreements giving Agnico the right to earn 51% interests by spending $3 million over three years. Later joint ventures could see Agnico holding 80% by paying for $12 million in work over a further three-year period.

Cascadia recently staked 2,834 new claims in the Stikine Terrane that are planned for exploration under the alliance. These new claims comprise expansions of Cascadia’s Macks, Milner, Byng and Mars properties, as well as four new properties, Bunker Hill, Hilo, Hyde and Mustard.

The junior also has a separate earn-in agreement with Agnico for the Catch property, a porphyry discovery from 2023.  The major would get 51% by funding $10 million in exploration over three years, including $1 million by the end of 2027. As well, Agnico could increase its stake to 80% via $20 million in spending over an additional three years.