Agnico Eagle Mines Limited (TSX/NYSE: AEM has agreed to acquire 38,100,000 common shares of GoldQuest Mining Corp. (TSX-V: GQC; FSE/BERLIN: M1W) by way of a non-brokered private placement at $0.60 per share for an investment of $22,860,000.
Upon closing of the private placement, Agnico will own approximately 15% of the issued and outstanding common shares of GoldQuest on a non-diluted basis.
Agnico Eagle Mines will become the largest shareholder. As of May 10, 2016, Rosseau Asset Management Ltd. and Robert R. McEwen were the two largest shareholder controlling 20,346,500 shares (10.55%) and 20,090,910 shares (10.41%) respectively.
The financing is expected to close on or about March 8, 2017 and is subject to certain conditions, including approval of the TSX Venture Exchange.
In connection with the financing, Agnico and GoldQuest will enter into an investor rights agreement pursuant to which Agnico Eagle will, provided Agnico Eagle owns at least a 10% interest in GoldQuest, have the right to participate in equity financings by GoldQuest in order to maintain its pro rata ownership in GoldQuest at the time of any such financing or acquire up to a 15.0% ownership interest in GoldQuest, and the right (which it has no present intention to exercise) to nominate one person (and in the case of an increase in the size of the board of directors of GoldQuest to 10 or more directors, two persons) to the board of directors of GoldQuest.
Under the investor rights agreement, Agnico Eagle will be subject to a two-year standstill which will prohibit Agnico Eagle from taking certain actions, including acquiring more than 19.99% of the issued and outstanding common shares of GoldQuest, subject to certain exceptions.
photo credit: GoldQuest Mining