Agnico Continues To Grow With Project Go-Ahead
Contributed Opinion

1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Agnico Eagle Mines Ltd., Fox Riv Res Corp., Midland Exploration Inc., Franco-Nevada Corp., Or Royalties Inc., Lara Exploration Ltd., Fortuna Mining Corp., Metalla Royalty & Streaming, and Orogen Royalties Inc 
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Agnico Eagle Mines Ltd. (AEM:TSX; AEM:NYSE) is to proceed with the Hope Bay project in Nunavut based on a Preliminary Economic Assessment released last week. The PEA indicates an underground project, producing over 400,000 oz per year for an initial 11-year mine life, starting in 2030, with initial capex of $2.4 billion. Agnico indicated high exploration prospectivity. It acquired Hope Bay in 2021 after successfully building and operating a nearby mine (Meadowbank). What will be Agnico's third mine in the Arctic will help its 20-30% 2030 growth goal.

Separately, Agnico increased its interest in Wallbridge Mining to 19.9% to help advance the Fenelon project in Quebec, maintaining its status as the major miner with most interests in junior explorers.

These two developments, following two recent acquisitions (of the Ikkari project in Finland and Fox River's phosphate project), clearly demonstrate Agnico's willingness to grow.

Independent of these transactions, Agnico is a Buy. It is without doubt our top gold miner. The recent share price declines, from over $250 at the beginning of March, brings its valuation metrics towards long-term lows.

Royal Reduces Mine Equity for Royalty

Royal Gold Inc. (RGLD:NASDAQ) has sold half of its equity interest in the Hod Maden project in Turkey to Turkish miner Lidya Mines, in return for a 2.5% royalty. It also has an option to purchase another 2% royalty from SSR Mining, which concurrently sold its entire equity interest to Lidya. Royal reduces its equity interest in the project to 15%, which would still require it to pay a further $137 million towards capex.

The economic impact of the sale is more-or-less neutral, but it aligns Royal's interest more with its royalty business model, reducing its capital obligations, with upside potential (from the option to purchase SSR's royalty). Royal did not comment on any plans for disposal of the remaining 15% interest.

Royal is a Buy, particularly for those who do not already own. It is arguably more leveraged to the gold price than other large royalty companies, so the stock price could decline further in gold drops.

Fox Acquisition Moves Forward

Fox River Resources Corp. (FOX:CSE) has obtained an Interim Order from the Ontario Superior Court to proceed with its proposed acquisition by a subsidiary of Agnico, with closing expected in the third quarter. Proxies will be sent to shareholders shortly; we urge you to vote in favor.

Hold.

Midland Dilutes With Strategic Shareholders

Midland Exploration Inc. (MD:TSX.V) has completed a $5.3 million private placement, for shares and warrants, adding 11.8 million shares and another 11.8 million warrants, and diluting by just over 20% if the warrants are exercised.

There is a strong group of investors participating, including Rick Rule, MJG Capital, Caisse de dépȏt and other Quebec government funds, as well as Centerra Gold, which exercised its rights to maintain it 9.9% interest in the company. Midland has a strong technical team, an extensive property portfolio, several alliances and joint ventures, and a strong balance sheet. We would like to see them limit further dilution.

Buy.

100 PERCENT CLUB With Fox River Resources Corp. (FOX:CSE) having more than doubled since we originally purchased it, 19 of 21 of our current positions are in the "100 Percent Club"; our recent sale of Gladstone Investment was also a member. Only Kingsmen Creative and Midland Exploration have yet to be admitted.

TOP BUYS this week, in addition to above, include Franco-Nevada Corp. (FNV:TSX; FNV:NYSE), OR Royalties (OR:TSX; OR:NYSE), Lara Exploration Ltd. (LRA:TSX.V), Fortuna Mining Corp. (FSM:NYSE; FVI:TSX; FVI:BVL; F4S:FSE), Metalla Royalty & Streaming Ltd. (MTA:TSX.V; MTA:NYSE American), and Orogen Royalties Inc. (OGN:TSXV; OGNNF:OTC). Notwithstanding the possibility of a further correction in the gold price, which would hit the gold stocks, we see this as a very good opportunity for those underinvested in the space, or missing some top names, to buy.

IN GOLD WE TRUST Ronald-Peter Stöferle and the team at Incrementum have just released the 20th anniversary edition of their path-breaking research report with the title "Back to the Monetary Future", 460 pages of commentary and tremendous graphics. Topics include a look at Tether's influence on the gold market. Astonishingly, it is available free of charge here. A condensed 60-page report is available here. Every gold investor, or those not currently invested, should download and study this report.