Agnico ups stake in Sudbury

Following completion of a private placement of flow-through shares, Agnico-Eagle Mines’ (AGE-T) direct stake in Sudbury Contact Mines (SUD-T) will increase to 38.9% from 30.5%.

The placement of 1.3 million shares at $12.75 will give Sudbury Contact proceeds of $17 million with which to explore properties in Ontario and Quebec.

In a separate agreement, Sudbury Contact will issue a $13.8-million convertible debenture to Agnico. Cash proceeds of the debenture, which is convertible into common shares at $12.95 per share, will be used to acquire additional assets related to the junior’s exploration activities.

Sudbury Contact recently began a $25-million, 3-year program of underground exploration at the Victoria Creek gold project, near Kirkland Lake, Ont.

The aim of the program is to prove grade continuity within the deposit and expand the known gold mineralization through drilling.