Agnico-Eagle to redeem all 4.5% convertible debentures due 2012

By Jennifer Chiou

New York, Dec. 20 - Agnico-Eagle Mines Ltd. announced the Feb. 15 redemption of all $144 million of its 4.5% convertible subordinated debentures due Feb. 15, 2012.

Agnico-Eagle added it will make a full semiannual interest payment on Feb. 15.

For each $1,000 principal amount of debentures, the redemption price is $1,022.68, which the company will pay with 63.4767 shares.

The number of shares is based on 95% of the volume-weighted average trading price for the 20 consecutive trading days ending on Dec. 20, the fifth day preceding the notice of redemption.

Debentureholders may convert their securities before the close of business on Feb. 14 at a conversion rate of 71.429 shares per $1,000 principal amount of debentures, or $14.00 per share.

"The redemption of these debentures will leave Agnico-Eagle essentially debt-free and will be accretive to our common shareholders," vice chairman and chief executive officer Sean Boyd said in a news release.

"With over $120 million in cash and a substantially undrawn credit line of $150 million, the company is well positioned to advance its pipeline of projects towards achieving its goal of tripling gold production and doubling its gold reserves by 2009."

Agnico-Eagle is Toronto gold producer. The company's stock closed at $18.01 on Tuesday.

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