Agnico Eagle takes stake in Finnish explorer to access key asset

Pahtavaara was discovered by the Geological Survey of Finland in 1986 when high gold grade and visible gold were found in outcrop. (Image courtesy of Rupert Resources.)

Agnico Eagle (NYSE: AEM) is set to take a 9.9% stake in Finland-focused Rupert Resources (TSX-V: RUP) to gain access to the junior’s flagship Pahtavaara gold project, located 50 km away from the Canadian company’s Kittila mine.

Investment is expected to give the Canadian miner access to Rupert’s project, located only 50 km away from its own gold mine — Pahtavaara

The Toronto-based miner, which also has operations in Canada and Mexico, will invest C$13.1 million (about $9.8m) in the Finnish explorer through a non-brokered placement at 85c per unit. The deal is expected to help unlock the potential of Pahtavaara and validate Rupert’s exploration in the region.

“The new investment is expected to fund Rupert’s exploration campaign for at least 12 months and may lead to synergies in the event Rupert’s projects progress to the development stage,” the company’s chief executive, James Withall, said in a statement.

As part of the transaction, Agnico Eagle subscribed to 15.3 million shares in a non-brokered private placement at a price of 85 cents per unit. The senior gold company, in operation since 1957, was also granted certain ownership rights, including the right to nominate one person to Rupert’s board.

The explorer’s contiguous land package is located in the centre of a region that hosts Agnico’s 200,000-ounces-per-year Kittila operation — Europe’s largest gold mine. The underground mine produced 189,000 ounces of gold in 2018 with cash costs of $835 per ounce of gold.

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