Agnico Eagle's Offer Significantly Undervalues O3 Mining, Says Shareholder GreenAsh Partners
Friday, Jan 17, 2025 11:30 am ET
1min read As a shareholder of O3 Mining (OTCQX: OIIIF) (TSX.V: OIII), I am dismayed by Agnico Eagle's (NYSE: AEM) (TSX: AEM) recent takeover offer, which I believe significantly undervalues the company. GreenAsh Partners, an investment fund that holds a 2.7% stake in O3 Mining, has expressed similar concerns, and I wholeheartedly agree with their assessment.
Firstly, let's examine the offer price of C$1.67 per share, which represents a 57% premium to O3 Mining's volume weighted average price (VWAP) for the 20-day period ended December 11, 2024. While this premium may seem attractive at first glance, it is essential to consider the company's intrinsic value.
O3 Mining's primary asset is its 100%-owned Marban Alliance property, located near Val d'Or, in the Abitibi region of Québec. The property includes the Marban deposit, which is an advanced exploration project that could support an open pit mining operation similar to Agnico Eagle's Barnat open pit operations at the Canadian Malartic complex. O3 Mining has estimated that the Marban pit contains 52.4 million tonnes of indicated mineral resources grading 1.03 g/t gold for 1.7 million ounces of gold and 1.0 million tonnes of inferred mineral resources grading 0.97 g/t gold for 32 thousand ounces of gold (effective date of February 27, 2022).
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