Agnico Eagle Mines (TSX:AEM) is taking a 14.9% stake in privately held Scout Discoveries, giving the Canadian gold major exposure to a portfolio of precious and base metals projects in Idaho, US.
Agnico agreed on Friday to make an approximately US$14.77 million ($20.73 million) equity investment in Scout, purchasing around 9.85 million shares at US$1.50 per share.
Following closing, Agnico will hold a 14.9% fully diluted interest in Scout.
Scout’s largest shareholder, The Electrum Group, has also agreed to purchase approximately 6.82 million shares at the same price for US$10.23 million, increasing its ownership from 27% to 30%.
This takes the combined proceeds under the private placement to US$25 million.
Scout consolidates Idaho portfolio
Alongside the investments, Scout has consolidated 100% ownership of seven projects in Idaho by issuing approximately 2.28 million shares to subsidiaries of Elemental Royalty (TSX:ELE).
The projects were discovered by Scout’s team during generative exploration work conducted between 2018 and 2022 for EMX Royalty, which merged with Elemental Altus Royalties last year to form Elemental Royalty.
Scout says the transaction eliminates approximately US$4.5 million in future cash payments and US$8.4 million in work commitments across the seven projects.
The company has also entered into an earn-in agreement with Agnico covering its Elk City Project, consisting of two adjacent claim packages, and granted the gold miner an option to earn into the Muldoon Project.
At Elk City, Agnico may earn an initial 51% interest by funding US$20 million of exploration over five years. The companies would then form a joint venture, under which Agnico could increase its interest by another 19% by funding a further US$40 million.
At Muldoon, if Agnico’s option is exercised, it can also earn an initial 51% interest by funding US$10 million for work over five years. After that, a joint venture would be formed, under which Agnico can earn a further 19% by spending another US$20 million on the project.
Scout will remain operator during the earn-in periods, with drilling to be conducted by its internal drilling division.
Initial exploration programs across the projects are budgeted at approximately US$9.4 million through the end of 2027, the company says.
Agnico backs Idaho exploration
“This is exactly what we set out to do when we began working in Idaho eight years ago,” Scout CEO Curtis Johnson says.
“We came here with the conviction that Idaho hosts district-scale mineral systems worthy of the attention of the world’s leading mining companies, and we have spent those years assembling the land positions, the datasets, and the teams to prove it.”
Johnson notes partnering with Agnico at Elk City and Muldoon, alongside the miner’s 14.9% equity investment, represents a significant endorsement of Scout’s exploration strategy.
For Agnico, the deal adds to a series of recent investments in North American gold explorers.
Last month, the company invested more than C$57 million ($57.15 million) in Radisson Mining Resources (TSX-V:RDS), which holds projects in Québec’s Abitibi region.
In July, Agnico also invested C$60 million in newly listed Cadillac Mines (TSX:CADY), another explorer with projects in the Abitibi.
Scout Discoveries is a private US mineral exploration and drilling company with a portfolio of precious and base metals projects across the western US.
Write to Jackson Chen at Mining.com.au
Main Image: Scout Discoveries
