Agnico buys 14% of Cascadia Minerals, backs Yukon exploration

Agnico Eagle Mines (NYSE, TSX: AEM) is buying an approximate 14% stake in Yukon-focused Cascadia Minerals (TSXV: CAM) and plans to partner with it on copper-gold exploration in the Canadian territory.

On Monday, Agnico announced it has agreed to purchase more than 19.3 million units of Cascadia at a price of C$0.26 per unit. Each unit contains one common share and half of a share purchase warrant that is exercisable at C$0.32 per share.

The Toronto-based gold miner also 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 C$0.384 per unit to Cascadia.

Cascadia’s share price surged more than 22% to C$0.25 on the news, near the 52-week high of $0.29 seen earlier this month. The company has a market capitalization of C$42.2 million ($30.3 million). Meanwhile, Agnico’s stock inched 0.9% higher, trading at nearly $199 per share and a $97 billion market capitalization in New York.

Upon closing, Agnico would own approximately 29.31 million shares or 14.21% of Cascadia on a non-diluted basis. Should it exercise all the warrants, its interest in Cascadia would rise to 19.9%. The company also has the right to maintain its pro rata ownership in Cascadia, or acquire up to a 19.99% ownership in future financings.

Capital for Yukon project

Cascadia said the unit offerings — totalling about C$8.9 million, including the C$7.6 million from Agnico — will provide additional capital to advance work on its flagship Carmacks project in central Yukon.

The early-stage project had a preliminary economic assessment completed in 2023, outlining a $330 million post-tax net present value (5%) and a 38% after-tax internal rate of return, based on a measured and indicated resource containing 651 million lb. of copper and 302,000 oz. of gold.

Planning is currently underway for a 15,000-metre drill program commencing in spring 2026, focused on expanding the existing resource at Carmacks. The property covers 180 km² in area and is located near the past-producing Minto mine.

Stikine Terrane partnership

Along with the equity investment, Agnico will also back Cascadia’s exploration efforts in Yukon’s Stikine Terrane with the aim of making new gold-copper porphyry discoveries in the region.

Under this partnership, Agnico will fund exploration work performed by Cascadia over an initial three-year period. After that, either party can designate certain projects for follow-up work by Agnico under an earn-in agreement.

To earn a majority 51% interest in a project, Agnico must fund work expenditures of C$3 million over three years. Later joint ventures could see the gold miner increasing its interest to 80% by spending another C$12 million over a further three-year period.

“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 a press release.

Cascadia recently staked 2,834 new claims in the Stikine Terrane that will be explored under this partnership. 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.

Its Catch property, a new porphyry discovery from 2023, will be explored under a separate agreement, under which Agnico can earn a 51% interest in the property by spending C$10 million over three years, with a minimum of C$1 million by the end of 2027. As well, Agnico could increase its interest to 80% via additional funding of $20 million over three years.