GOTHENBURG, Sweden, Sept. 14, 2005 (PRIMEZONE) -- Agnico-Eagle Mines Limited on May 12, 2005 announced a recommended public offer to the shareholders of Riddarhyttan Resources AB for all outstanding shares of Riddarhyttan not already owned by Agnico-Eagle. Before the offer announcement, Agnico-Eagle beneficially owned approximately 14% of Riddarhyttan's outstanding shares. In the offer, 0.1137 shares in Agnico-Eagle were being offered for each Riddarhyttan share. The offer period expired on September 9, 2005 at 4:00 p.m. (CET).
On September 13, 2005, Agnico-Eagle announced that as of the close of the offer period, shareholders representing 35.6% of Riddarhyttan's outstanding total shares had tendered their shares into the offer. Together with the 14.0% already owned by Agnico, this represents an aggregate of 49.6% of the outstanding shares in Riddarhyttan. Agnico-Eagle further announced that it was extending the offer period until 4:00 p.m. (CET) September 23, 2005.
The Board of Directors(1) of Riddarhyttan on May 12, 2005 issued its support for the Agnico-Eagle offer by recommending acceptance of the offer to Riddarhyttan's shareholders. Riddarhyttan entered into an agreement with Agnico-Eagle providing for, among other things, the price and terms at which Agnico-Eagle would make the offer and the undertaking of the Board to recommend the offer.
The Board continues to believe that the Agnico-Eagle offer is in the best interest of Riddarhyttan's shareholders. In response to questions and newspaper articles, the Board has decided to make the following statement:
As of the announcement of the offer on May 12, 2005, the offer was valued at SEK 10.25 per Riddarhyttan share, representing a premium of 27.3% over the closing price of SEK 8.05 per share as of May 11, 2005, the last trading day before the announcement of the Agnico-Eagle offer.(2) As of September 12, 2005, the offer values each Riddarhyttan share at SEK 12.09, representing a premium of 50.2% over the May 11, 2005 closing price. (3)
Since the offer was announced, Riddarhyttan has informed the market of the exploration results, the increase in resources and the result of the variography study. As expected, this study showed that the mineralized zones have a better continuity than earlier interpreted which resulted in an increase of the inferred tonnage. The Board wants to make it clear that during the negotiations with Agnico-Eagle it was assumed that the study should have a positive impact on the resources -- please refer to press release dated 18 April 2005. As the study was not completed at this point of time it could, however, not be published until later. Despite the increase in resources and that other fundamental factors, such as the gold price, have changed during the pendency of the offer, the Board believes that the valuation of the Agnico-Eagle offer more than outweighs the potential impact of such factors on Riddarhyttan's share price.
The Board has also considered the alternatives available to Riddarhyttan if the offer is not consummated. As an independent company, Riddarhyttan will require further equity or debt financing in order to continue the exploration and development of the Suurikuusikko deposit, and the need for such additional financing would be imminent. However, such financing may not be available on commercially attractive terms or at all. Based on the current program, additional drilling and further work on the feasibility study risk being curtailed at the end of September, 2005 as Riddarhyttan strives to preserve cash and seek out new financing alternatives.
Moreover, while alternative suitors may emerge, the Board has received no such indications to date, and there can be no assurances that such suitors will emerge or, if they do, that they will be able to produce an offer that is more attractive than the Agnico-Eagle offer.
The Board believes that shareholders considering the Agnico-Eagle offer should carefully review the materials provided to them by Agnico-Eagle. In these materials, Agnico-Eagle has stated that shareholders accepting the offer and becoming Agnico-Eagle shareholders could expect to benefit from among other things:
-- ownership of shares with greater liquidity, listed on the New York and Toronto stock exchanges, and a 25-year cash dividend record;
-- participation in Agnico-Eagles' existing mining operations in the LaRonde-mine;
-- participation in Agnico-Eagle exploration projects in Canada (Lapa, Goldex and LaRonde II) the United States and Mexico;
-- access to experienced mine-building, operating and exploration team with the expertise to solve the technical challenges of Suurikuusikko; and
-- access to financial resources to provide the capital funding required for the development of Suurikuusikko.
(1) Alain Blackburn and Eberhard Scherkus, who are officers of Agnico-Eagle and members of the Board of Riddarhyttan, have not participated in any discussions or decisions by the Board in relation to the recommendation.
(2) Based on the closing price of USD 12.51 of the Agnico-Eagle shares on the New York Stock Exchange on May 11, 2005 and a SEK/USD exchange rate of 7.2055 as of the same date.
(3) Based on the closing price of USD 14.07 of the Agnico-Eagle shares on the New York Stock Exchange on September 12, 2005 and a SEK/USD exchange rate of 7.557 as of the same date .
Riddarhyttan Resources AB is an exploration company with occurrences of precious metals in the Nordic Region of Europe. The primary business idea is, by means of exploration and acquisition acquire new occurrences, which through detailed exploration can be advanced to economic resources. At the Suurikuusikko deposit (Finland), which is Riddarhyttan's most advanced project measured mineral resources are estimated to 2.5 Mt grading 6.2 grams of gold per tonne (0.50 million ounces, indicated mineral resources amount to 9.3 Mt grading 5.1 grams of gold per tonne (1.53 million ounces) and inferred resources are estimated to 12.5 Mt grading 4.2 grams of gold per tonne (1.70 million ounces) (cut off 2 g/t).