Agnico-Eagle Mines Limited Makes a Strategic Investment in Gold Eagle Mines Ltd.
TORONTO, June 26, 2008 - Gold Eagle Mines Ltd. (TSX: GEA) ("Gold Eagle" or the "Company") is pleased to announce that Agnico-Eagle Mines Limited ("Agnico-Eagle") has made a strategic investment in Gold Eagle today through a non-brokered private placement of Units of Gold Eagle. In addition, Mr. Eberhard Scherkus P.Eng., the President and COO of Agnico-Eagle has been appointed a Director of Gold Eagle.
Agnico-Eagle Strategic Investment
Agnico-Eagle purchased a total of 5,524,862 Units at $9.05 per Unit for gross proceeds to Gold Eagle of approximately $50 Million. Each Unit consists of one common share and one half of a share purchase warrant of Gold Eagle. Each whole warrant entitles the holder to purchase one common share of Gold Eagle at $10.15 for a period of 36 months. As a result of this private placement Agnico-Eagle now owns 5.18% of Gold Eagle on an issued and outstanding basis and 7.16% on a fully diluted basis.
Gold Eagle's principal asset is the high grade Bruce Channel Discovery ("BCD"), located at the western part of the prolific Red Lake Trend in northwestern Ontario. The Red Lake Trend has produced over 20 million ounces of gold and is host to Goldcorp Inc.'s world class Campbell Mine, Red Lake Mine, and Goldcorp Inc's now closed Cochenour-Willans Mine.
Sean Boyd, Vice Chairman and CEO of Agnico-Eagle commented, "Our investment in Gold Eagle is a strong indication of the quality and potential of the high grade Bruce Channel Discovery. Agnico-Eagle has recently accumulated a property position in the Red Lake area and this investment increases our exposure to this world class gold camp and is consistent with our strategy of investing in promising gold development opportunities. We look forward to using our exploration and mine development skills to assist Gold Eagle in increasing the size of the deposit and advancing the project towards feasibility."
Simon Lawrence, President and CEO of Gold Eagle commented "We are very pleased with this timely investment from Agnico-Eagle, a company which has proven expertise in the development of underground mines. Proceeds from Agnico-Eagle's private placement will be utilized for our shaft sinking and underground development program."
Appointment of Eberhard Scherkus to the Board
Gold Eagle is pleased to welcome Mr. Scherkus to the Board of Gold Eagle. Mr. Scherkus, a graduate of McGill University (B.Sc.), is the current President and COO of Agnico-Eagle and has been with Agnico-Eagle for more than 23 years. Prior to joining Agnico-Eagle, Mr. Scherkus was Assistant Manager and Chief Geologist at the Cochenour-Willans Mine between 1979 and 1984, and the Mine Superintendant at the Dickenson Mine (now called the Red Lake Mine) from 1984 to 1985. Mr. Scherkus brings much knowledge and expertise to Gold Eagle in the development of the Bruce Channel Discovery.
In order to permit the appointment of Mr. Scherkus as a Director of Gold Eagle, Mr. Brent Peters has agreed to step down from the Board. Mr. Peters will remain the Chief Financial Officer of Gold Eagle.
Upon completion of this financing Gold Eagle's cash position will be approximately $147.6 million. As such, Gold Eagle believes it is very well funded for its significant 24 month surface step-out drilling program from the BCD towards the Finn Zone, and also to substantially complete its Advanced Underground Development Program.
About Gold Eagle
Gold Eagle Mines Ltd is a Canadian based junior natural resource company developing a significant new gold discovery in the prolific Red Lake gold camp, located in northwestern Ontario, Canada.
The statements made in this News Release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from the Company's expectations and projections. Accordingly, readers should not place undue reliance on forward-looking statements. For a more detailed discussion of such risks and other factors, refer to Gold Eagle's filings with Canadian securities regulators available on www.sedar.com or the Company's website at www.goldeaglemines.com
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