Agnico Eagle Mines Limited AEM and O3 Mining Inc. recently signed a definitive support agreement. Under this agreement, AEM has agreed to offer to acquire, directly or indirectly, all of O3 Mining's outstanding common shares in cash at $1.67 per common share through a takeover bid. The offer is worth approximately $204 million on a fully diluted in-the-money basis.

The offer price of $1.67 per common share represents a 57% premium over the volume-weighted average price of Common Shares on the TSX Venture Exchange for the 20-day period ending Dec. 11, 2024.

O3 Mining's principal asset is the 100%-owned Marban Alliance property. The Marban Alliance property includes the Marban deposit, which is an advanced exploration project with the potential to sustain an open pit mining operation akin to Agnico Eagle's Barnat open pit operations at the Canadian Malartic complex.

The potential combination of the Marban Alliance property into the Canadian Malartic land package will result in significant and unique synergies by leveraging Agnico Eagle's regional operational expertise and existing infrastructure, which includes the Canadian Malartic mill, open pit workforce and equipment fleet.

Shares of Agnico Eagle have gained 51.7% in the past year compared with a 19.4% rise of the industry.

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The company expects its 2024 gold production to be in the range of 3.35-3.55 million ounces and is on track to meet the mid-point of the range. AEM anticipates meeting its 2024 projection of between $875 and $925 for total cash costs per ounce and between $1,200 and $1,250 for AISC per ounce. With capitalized exploration excluded, it expects total capital expenditures for 2024 to be in the range of $1.6 million to $1.7 million.

AEM’s Rank & Key Picks

AEM currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the basic materials space include Carpenter Technology Corporation CRS, Ingevity Corporation NGVT and CF Industries Inc. CF. 

Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 14.1%. The company's shares have soared 161.6% in the past year. You can see the complete list of today's Zacks #1 Rank stocks here.

Ingevity, a Zacks Rank #2 (Buy) stock, beat the consensus estimate in three of the trailing four quarters. In this time frame, it has delivered an earnings surprise of roughly 95.4%, on average. The consensus estimate for NGVT’s current year earnings has increased 15.9% in the past 60 days. 

The Zacks Consensus Estimate for CF’s current-year earnings is pegged at $6.32 per share. CF, a Zacks Rank #1 stock, beat the consensus estimate in two of the last four quarters while missed twice, with the average earnings surprise being 10.3%. CF has rallied around 18.2% in the past year.

 

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