DBRS Comments on Agnico-Eagle $578 Million Property Acquisition

DBRS notes that Agnico-Eagle Mines Limited (Agnico or the Company) indicated on April 1, 2010, that it has reached an agreement in principle with Comaplex Minerals Corp. (Comaplex) to acquire a 100% interest in the Meliadine gold project, located in Nunavut, through the issuance of approximately $578 million Agnico common shares (10.2 million shares at approximately $57 per share) to Comaplex shareholders in addition to the approximately $72 million already invested in Comaplex. DBRS considers the proposed acquisition to be consistent with Agnico’s stated strategy of acquiring late-stage gold-development properties in politically stable jurisdictions, using its equity for such acquisitions. The Meliadine gold project will compliment Agnico’s project pipeline, which has been somewhat depleted by the construction of five new gold mines over the last couple of years. DBRS views this as a positive development for the long-term potential of the Company and consistent with our view that the Company would be active in seeking out property acquisitions using its equity as currency. The acquisition, if completed as anticipated, will not have a near-term impact on the Company’s BBB (low) Issuer Rating.

The Meliadine gold project is located approximately 300 kilometres from Agnico’s recently constructed Meadowbank gold mine. Meliadine is currently estimated to have 3.29 million ounces of measured and indicated gold resources, from 12.9 million tonnes grading 7.9 grams per tonne (g/t), and inferred gold resources of 1.73 million ounces, from 8.4 million tonnes grading 6.4 g/t. The project needs to undergo further exploration efforts, with a feasibility study expected to be completed toward the end of 2011.

The proposed transaction remains subject to due diligence, the negotiation and board approval of the definitive acquisition agreement and the negotiation of support agreements with the directors and officers of Comaplex as well as approval by Comaplex shareholders and court and regulatory approvals. Agnico expects the transaction to close in June 2010.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The applicable methodology is Rating Mining, which can be found on our website under Methodologies.

This is a Corporate rating.