Agnico-Eagle Mines Limited - Combination Of Sudbury Contact Mines Limited And Silver Century Explorations Ltd.

TORONTO--(BUSINESS WIRE)--Dec. 4, 1998--Agnico-Eagle Mines Limited (TSE:AGE.) (ME:AGE.) (NYSE:AEM), Sudbury Contact Mines (TSE:SUD.), Limited and Silver Century Explorations Ltd. (ASE:SVC.) announced today a plan to combine Sudbury Contact and Silver Century into a single corporation.

The shareholders of Silver Century would receive one share of Sudbury Contact for each share of Silver Century held. As part of the transaction, Agnico-Eagle Mines Limited, which, together with Mentor Exploration and Development Co., Limited, owns approximately 80 percent of the voting shares of both companies, would forgive certain indebtedness owed by Sudbury Contact. The forgiveness of debt by Agnico and Mentor will have no impact on the consolidated financial statements of either Agnico or Mentor as the total amount of indebtedness has been written off for accounting purposes in prior years.

The objective of the combination is to reduce the administrative costs of operating two separate public companies and provide shareholders with a stake in a larger public company engaged in the exploration for and development of mining properties. James Nasso, President of Silver Century Explorations Ltd. said "This is an excellent opportunity to combine two similar businesses. Both Silver Century and Sudbury Contact are junior stage exploration companies, principally focussed on gold exploration, in Quebec and Ontario." Sean Boyd, President and Chief Executive Officer of Agnico, concurred saying "this will help streamline Agnico's corporate structure and give Agnico a primary vehicle for its exploration program in North America."

Special Committees of the Boards of Directors of both corporations concluded that the transaction is fair to and in the best interest of their respective shareholders.

The transaction will proceed by way of plan of arrangement under the Business Corporation Act (Ontario) and is subject to court approval and to the approval of shareholders of Sudbury Contact and Silver Century. A joint information circular is expected to be mailed to shareholders of record of Sudbury Contact and Silver Century in mid-December, 1998 in connection with special meetings to be held on or about January 22, 1999.

Sudbury Contact is an exploration and development company focused on gold and diamond properties which owns or has under option 18 properties in northeastern Ontario and northwestern Quebec. The common shares of Subury Contact are listed on The Toronto Stock Exchange.

Silver Century is an exploration and development company principally focused on precious and base metals which owns or has under option 16 properties in northeastern and northwestern Quebec. The common shares of Silver Century are listed on the Alberta Stock Exchange.

Agnico-Eagle is an established Canadian gold producer with operations located principally in northwestern Quebec and exploration development activities in Quebec and Ontario. The common shares of Agnico-Eagle are listed on the New York, Toronto and Montreal Stock Exchanges.