GoldQuest Mining Corp. (TSXV:GQC) announced a private placement with Agnico Eagle Mines Ltd. (TSX:AEM, NYSE:AEM) for C$22.86 million to fund working
capital and the exploration and development of its properties in the Dominican Republic. In our view this investment by Agnico provides technical validation
for the Romero project, and highlights the exploration potential of its district scale land package. The financing consists of 38.1 million common
shares priced at C$0.60/sh which represents a 27.7% premium to the prior day’s close. As a result of the transaction, Agnico would own ~15% of GoldQuest
on a non-diluted basis. In conjunction with the financing, Agnico has been granted the right to nominate one director and maintain its interest in
future financings. GoldQuest currently trades at 0.54x NAV and $42/oz versus peers at 0.51x NAV and $35/oz. We believe that a further premium may be
warranted because of Romero’s stage of development and the exploration potential of the company’s district scale land package. We expect the combination
of the ongoing de-risking at Romero (feasibility study in early 2017 & operating permits in late 2017) along with ongoing regional exploration
are likely to provide positive momentum for the share price.
Derek Macpherson | VP Mining Analysis
Sunneva Bernhardsdottir | Associate, Mining Analysis
Victoria Ellis Hayes | Associate
Red Cloud Klondike Strike Inc.
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Toronto ON, M5K 1H1
Priced as of prior trading day's market close, EST (unless otherwise noted).
All values in USD unless otherwise noted.
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Company Specific Disclosure Details
GoldQuest Mining Corp - TSXV:GQC - 1,2,4
Agnico Eagle Mines Ltd - TSX:AEM, NYSE:AEM - None
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