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Agnico Eagle increases ownership stake in Royal Road Minerals to 20%

The news comes as part of Royal Road’s previously announced C$8 million financing, which closed on Friday, with the company issuing nearly 26.1 million new shares to Agnico Eagle to bring the gold miner’s total to 42.5 million shares

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Royal Road recently acquired 36,000 hectares of land in Colombia

Royal Road Minerals Limited (CVE:RYR) announced Friday that mining major Agnico Eagle Mines Limited (TSE:AEM) (NYSE:AEM) has upped its stake in the junior exploration company to nearly 20%.

The news comes as part of the Jersey, UK-based Royal Road’s previously announced C$8 million financing, which closed on Friday. As part of the offering, the company issued around 26.1 million new shares to Agnico Eagle, bringing the gold miner’s total to 42.5 million shares or 19.9% of the company.

Shares of Royal Road shot up 5.4% by midday Friday in Toronto.

READ: Royal Road raising $8 million to advance new Colombia projects

In total, Royal Road issued a total of 40 million shares at a price of C$0.20 per share for gross proceeds of C$8 million.

The junior plans to use the proceeds to finance the company’s prior acquisition of Northern Colombia Holdings Limited from Compañía Kedahda Limited, an affiliate of AngloGold Ashanti Limited.

The new assets include mining concession agreements covering approximately 36,000 hectares, as well as the rights to acquire mining concessions over approximately 215,000 hectares in the Nariño, Cauca and Antioquia departments of Colombia.

Investor rights agreement

Agnico Eagle and Royal Road also entered into an investor rights agreement whereby Agnico has the right to participate in Royal Road financings in order to maintain its pro rata ownership, provided that it maintains at least a 9.5% stake in Royal Road. Agnico is also entitled to nominate or appoint one person to Royal Road’s board of directors and, if the board membership is higher than nine people, add an additional member.

A statement from Agnico Eagle, released Friday, said that it acquired the shares for “investment purposes” and, depending on market conditions or other factors, it may acquire or dispose of additional shares or securities in Royal Road.

Agnico Eagle is a senior Canadian gold mining company that has produced precious metals since 1957.  Its operating mines are located in Canada, Finland and Mexico, with exploration and development activities in each of these countries as well as in the United States and Sweden. 

Royal Road is advancing its exploration assets in Colombia and Nicaragua.

Contact Angela at [email protected]

Follow her on Twitter @AHarmantas

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TSX-V:RYR
Market: TSX-V
Market Cap: $58.26 m
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