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Agnico Eagle (AEM) Rising on Yamana Gold Deal News
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Agnico Eagle (AEM) Rising on Yamana Gold Deal News

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Pan American Silver and Agnico Eagle together have made an offer to acquire Yamana Gold for $4.8 billion.

Canadian mining companies Agnico Eagle Limited (AEM) Pan American Silver (NASDAQ: PAAS) (TSE:PAAS) have made an offer to take over Yamana Gold (AUY) in a deal worth $4.8 billion. AEM stock rose 5.7% yesterday, and is continuing to rise in pre-market trading.

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The deal will consolidate 100% ownership of the Canadian Malartic mine, one of the world’s largest gold mines. This, in turn, will create a leading precious metals producer in Latin America.

Per the terms of the deal, each Yamana share will be worth $1.04 in cash and 0.1598 Pan American shares, and 0.0376 Agnico Eagle shares, for a total value of $5.02 per Yamana share.

The Yamana management stated that the offer is superior to its planned takeover by South Africa-based Gold Fields Ltd.

Upon approval, Agnico would acquire Yamana’s Canadian assets, including the Malartic mine in northern Quebec.

Is AEM a Good Investment?

The Wall Street community is clearly optimistic about the Agnico Eagle stock. Overall, the stock commands a Strong Buy consensus rating based on eight Buy ratings. Agnico Eagle’s average price target of $60.30 implies 38.9% upside potential from current levels.

The company beat earnings in Q3.

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