Agnico Eagle's C$1.67 Per Share Offer for O3 Mining Appears to Represent a Significant Discount to independent estimates of Net Present Value

Acquisition Offer and Valuation - Agnico Eagle's offer of C$1 67 per share values O3 Mining at an Enterprise Value (EV) of C$162 8m, significantly below sell-side analyst NPV estimates of C$1 6bn and the updated pre-feasibility study NPV of C$1 6bn [1] - The offer price of C$1 67 per share equates to an equity value of C$204m for O3 Mining, but after adjustments for net cash and investments, the EV is C$162 8m [7] - The 2022 pre-feasibility study by Ausenco Engineering Canada estimated a C$639m NPV for O3 Mining's core asset, the Marban Mining Project, using a gold price of $1,900, which is significantly below the current gold price of$2,700 [8] - Extrapolating the sensitivity scale from the pre-feasibility study and applying cost base inflation estimates, the NPV today rises to C$1 6bn, indicating the offer EV may be at a 90% discount to NPV [9] Shareholder Considerations - Independent shareholders may welcome the deal design requiring just 66 2/3% acceptance, with the offeror reserving the right to waive the condition to no less than 50% acceptance [4] - If the 90% delisting threshold is not achieved, non-tendering shareholders may prefer continued public float ownership alongside Agnico Eagle as a majority owner and development partner [2] - The deeply discounted offer may disincentivize meaningful tenders beyond the 39% irrevocables already committed, as shareholders may perceive the offer as undervalued [5] - In the scenario of an unchanged offer price, it is unlikely that the 90% threshold for delisting will be reached, as independent shareholders may elect for long-term participation in the discounted public equity float of O3 Mining [13] Strategic Implications for Agnico Eagle - Agnico Eagle may maximize its profit participation in O3 Mining by raising the takeover offer price, given the significant gap between the current offer and NPV [1] - A deeply discounted offer is only rational if the additional cost of raising the offer to achieve 100% tenders exceeds the profit sacrificed due to the failure to achieve full tender ratio [10] - The optimal economic outcome for Agnico Eagle may only be reached by a meaningful raise in the offer price, assuming tenders are not materially higher than the minimum thresholds [11] Market Context and Stakeholder Positions - GreenAsh Partners, through the GA-Courtenay Special Situations Fund, holds 3,393,500 shares in O3 Mining, representing 2 7% of the shares outstanding [3] - Independent shareholders would welcome further public disclosure by Agnico Eagle or O3 Mining directors to justify meaningful tenders if the current offer price remains unchanged [12]