Agnico Eagle Mines (TSE:AEM) announced on Monday that it had acquired Grayd Resources (CVE:GYD) for $275 million. Grayd is a junior exploration and development company with gold and silver projects in Mexico.
Agnico said the offer price of $2.80 per Grayd share represents a premium of 65.7% to the volume weighted average price of Grayd shares on the TSX Venture Exchange for the 20-day period ended September 16, 2011.
Grayd owns a 100% interest in the La India project located in the Mulatos Gold Belt of Sonora, Mexico. The project is approximately 70 kilometres northwest of Agnico-Eagle's Pinos Altos gold mine. The project hosts a National Instrument 43-101 compliant measured and indicated gold resource1 of 26.8 million tonnes at a grade of 0.88 gram per tonne ("g/t"), and an inferred gold resource of 19.7 million tonnes at a grade of 0.80 g/t.
Grayd recently discovered the Tarachi gold porphyry prospect located approximately 10 kilometres north of the La India project. Both projects are located in a large package of exploration concessions that total approximately 54,000 hectares.
"This acquisition is consistent with our long-term strategy of building value by bringing our mine development and exploration skills to promising early stage gold deposits and projects. The Grayd properties will benefit from the construction and operating experience gained at our Pinos Altos mine" said Sean Boyd, Vice-Chairman and CEO of Agnico-Eagle.
"It is expected that La India and, further out potentially Tarachi, will contribute to the ongoing growth in Agnico-Eagle's gold production and cash flows reflecting the high quality of work performed by Grayd", added Mr. Boyd.