Agnico-Eagle sells entire stake in Orla Mining for $560.5 million
Agnico-Eagle Mines Ltd. (AEM-TSX, AEM-NYSE) has announced the disposition of its 11.3% interest in Orla Mining Ltd. [OLA-TSX]. Agnico said it sold 38 million common shares of Orla to buyers in Canada, the United States and elsewhere for $14.75 per share for a total consideration of $560.5 million.
After giving effect to the disposition, Agnico will not have any interest in Orla.
“Our investment in Orla has been mutually beneficial for both companies,” Angico President and CEO Ammar Al-Joundi said in a press release. “With Orla’s success in evolving into an established intermediate producer and in the context of the current gold market, we believe it is the right time to monetize our investment,” he said. “This demonstrates our commitment to disciplined capital allocation and allows us to redeploy capital to our strategic priorities.”
Orla shares were active on the news, easing 6.3% or $1.01 to $14.98. The shares trade in a 52-week range of $17.45 and $5.24.
Orla was in the news last year when the company announced a strategic expansion into Canada with the acquisition of the Musselwhite Gold Mine in northwestern Ontario from Newmont Corp. [NGT-TSX, NEM-NYSE, ASX, PNGX] for $810 million cash. Orla also agreed to pay a gold-linked consideration of $40 million.
The combination of the proven Musselwhite mine and Orla’s Camino Rojo mine in Zacatecas State, Mexico, more than doubled the company’s annual production to over 300,000 ounces, with the expected near-term growth to over 500,000 ounces annually as the South Railroad project in Nevada is expected to start production in 2027. The transaction was also expected to significantly enhance Orla’s free cash flow, providing additional cash for the company’s organic growth plans.
Musselwhite is a producing underground gold mine located on the shore of Opapimiskan Lake in northwestern Ontario. It has been in operation for 25 years, having produced close to 6.0 million ounces of gold to date, with a long history of resource growth and expansion.
At the end of 2023, proven and probable gold reserves stood at 1.5 million ounces (7.4 million tonnes at grade 6.23 g/t) within a measured and indicated resource of 1.8 million ounces (9.52 million tonnes at 5.78 g/t).
Orla currently operates the Camino Rojo oxide gold mine, a gold and silver open-pit and heap leach mine. The company is also developing the South Railroad project, a feasibility stage, open pit, heap leach gold project. The project is located on the company’s 25,000-hectare South Carlin Complex in Nevada, which contains several mineral resources and exploration targets.
The acquisition of Musselwhite transformed Orla into a North American-centred, geographically diversified gold producer with multiple producing assets and self-funded growth portfolio.