Agnico-Eagle Mines Ltd. (AEM-TSX, AEM-NYSE) is increasing its stake in Cartier Resources Inc. [ECR-TSXV] by subscribing for 14 million units of Cartier in a non-brokered private placement at 13 cents per unit for a total consideration of $1.82 million.
Each unit consists of one common share of Cartier and one-half of one common share purchase warrant. Each warrant entitles the holder to acquire on common share at 16 cents for a period of 36 months following the closing of the private placement, which is expected to occur on May 20, 2022.
Agnico-Eagle currently owns 35.3 million common shares, representing approximately 13.3% of the issued and outstanding shares on a non diluted basis. Upon closing of the private placement, Agnico Eagle will own 49.3 million common shares and 7.0 million warrants, representing 17.7% of the issued and outstanding shares on a non-diluted basis, and 19.7% on a partially-diluted basis assuming the exercise of warrants held by Agnico.
On May 18, 2022, Cartier Resources shares rose 4.3% or $0.005 to 12 cents and currently trade in a 52-week range of 31.5 cents and 11.5 cents.
Cartier recently released high grade channel sampling results from the 2021 exploration program at its 100%-owned Fenton gold property, which is located 50 kilometres southwest of Chapais, Quebec.
Exploration highlights include channel sections with grades up to 69.1 g/t gold over 2.0 metres.
Cartier Resources is a Quebec focused company that is advancing the development of its flagship Chimo Mine project as well as other projects. The company recently said it has a cash position of $5.5 million, with significant corporate and institutional support, including Agnico Eagle Mines, O3 Mining Inc. [OIII-TSXV, OIIIF-OTCQX], and the Quebec investment funds.
Agnico and Cartier entered into an investor rights agreement on December, 2016. In connection with the closing of the private placement, the companies will enter into an amended and restated investor rights agreement. Under the new agreement, Agnico will be entitled to the following:
- The right to participate in certain equity financings by Cartier in order to acquire up to a 19.97% stake in the junior.
- The right (which Agnico has no present intention of exercising) to nominate one person (and in the case of an increase in the size of the board of directors of Cartier to 10 or more directors, two persons) to the board of Cartier.
The Fenton deposit contains a historical resource estimate of 426,173 tonnes, grading 4.66 g/t gold or 63,885 ounces.Â Of that amount, 23,643 ounces are located in the first 50 metres below surface. However, this estimate was made in 2000 and work so far is not sufficient to classify this resource as a current mineral resource.