Canada's largest miner Agnico sells two Alaskan projects to Viszla Copper for 20% shareholding, royalties
TSX- and NYSE-listed Agnico Eagle Mines' US subsidiary has entered into a securities and asset purchase agreement with TSX-V-listed Vizsla Copper and its US acquisitions subsidiary to sell to Vizsla its interests in a company that holds the mining claims comprising the Delta base and precious metal project, as well as the Helm Bay gold project, which are both based in Alaska.
The transaction comprises Agnico receiving 22.5-million common shares of Vizsla Copper, valued at C$32-million and representing a 19.99% shareholding, as well as a deferred consideration of 2.9-million shares subject to certain conditions.
Vizsla will seek disinterested shareholder approval to approve the issuance of the deferred consideration shares, which would result in Agnico Eagle holding about 22% of its issued and outstanding common shares on a post-transaction basis.
Agnico will also receive three-million common share purchase warrants, which are each exercisable to acquire one common share at a price of C$1.95 apiece for a period of two years from the date of issuance.
Agnico also secured a 2% net smelter return royalty on Delta and 3% net smelter return royalty on Helm Bay as part of the sale transaction.
Vizsla will have the right to purchase 50% of each of the royalties at any time for C$5-million.
More contingent milestone payments of C$5-million, C$5-million and C$10-million, respectively, will be due to Agnico if Vizsla declares a mineral resource estimate for Delta of at least 300 000 copper-equivalent tonnes, if a feasibility study is completed and upon Delta entering commercial production.
The Delta project hosts multiple known volcanogenic massive sulphide lenses and a historical inferred mineral resource estimate of 15.4-million tonnes averaging 0.6% copper, 1.6% lead, 3.8% zinc, 62 g/t silver and 1.7 g/t gold. Multiple lenses appear to be open for expansion.
At Helm Bay, previous exploration has identified multiple gold-bearing quartz veins across the project, including high-grade veins associated with a small amount of historical production.
For Vizsla the transaction adds two wholly-owned projects to its Alaska portfolio alongside the Palmer project, creating a broader pipeline of base and precious metals projects.
