Sean Boyd, President and CEO of Agnico Eagle (Photo: John Burridge Photography)

Sean Boyd, President and CEO of Agnico Eagle (Photo: John Burridge Photography)

After the market closed today Rio Alto Mining (RIO:TSX), who is in the process of acquiring fellow Peruvian gold company Sulliden Gold (SUE:TSXV), announced they have successfully come to terms with Agnico Eagle (one of Sulliden's largest shareholders) to acquire their 8.6% stake in the target.  Agnico Eagle has agreed to sell its interest in Sulliden for $1.10 per share or roughly $29.7 million.

Last week, Rio Alto made a friendly all stock offer for Sulliden, valuing the gold developer at over $300 million.

This agreement essentially eliminates any possible competing bid from Agnico which seemed possible prior to this announcement.  It has long been suspected that Agnico would be a likely acquirer given the fact that Shahuindo is favorably located, is an expandable heap leach project, low capital intensity, good metallurgy and leaching characteristics, low strip and strong economics (~40% post-tax IRR).

We highlighted the fact that Sulliden would likely be acquired prior to construction in a September 2013 piece (Read: Sulliden Clears Final Hurdle at Shahuindo and Recieves Environmental ‘Okay’).

The team at Agnico clearly has their hands full with the completion of their acquisition of Osisko Mining (along with Yamana Gold).

Agnico originally became a shareholder in Sulliden in April 2013 by acquiring roughly 27 million units in the company at a price of $0.89 (each unit came with 0.7 warrant exercisable for 2 years at $1.31 for each whole warrant).  Based on the deal with Rio Alto today, Agnico will profit roughly 25% on the shares (roughly annualized and based on no warrants being exercised).

Read: Rio Alto Acquires 8.6% of Sulliden Shares From Agnico Eagle