First-Ever Listing Of Contingent Value Rights On The TSX

Introduction

Contingent value rights (CVRs) issued by Agnico Eagle Mines Limited (Agnico Eagle) began trading on the Toronto Stock Exchange (TSX) under the symbol “AEM.CV” on June 18, 2026. This was a watershed moment since it is the first time CVRs have ever been listed on any Canadian stock exchange. Davies acted for Agnico Eagle in connection with this listing, achieved through the TSX Sandbox. This listing not only offers the prospect of meaningful liquidity and transparent price discovery to holders of CVRs but also signals the TSX’s readiness to embrace thoughtfully structured innovative securities.

Key Facts at a Glance

• First CVR listing on a Canadian exchange (TSX: AEM.CV)
• Over 200 million CVRs issued; maximum $3.00 cash per CVR over 10 years
• Three objective milestones tied to gold mineral reserves and commercial production
• Listed via TSX Sandbox with conditional exit; supported by issuer disclosure undertakings
• Listing ensures CVRs will be qualified investments eligible to be held in registered plans (RRSPs, TFSAs, etc.)

What Are CVRs and Why Do They Matter in Mining M&A?

A contingent value right is a contractual entitlement to receive additional consideration if specified future milestones are achieved. CVRs are equivalent to earnouts that are typically used in private M&A transactions and are a useful tool for bridging valuation gaps in M&A. Where parties are unable to agree on a single price today for an asset with an uncertain value, parties can use a CVR which allows the buyer to proceed while preserving the upside for the target’s securityholders if that potential materializes.

CVRs are especially well-suited to the mining and resources sector where value of an exploration or development stage asset is uncertain and subject to a number of contingencies. By tying a portion of consideration to these objectively measurable outcomes, a CVR enables the transaction to close without the buyer overpaying for unproven potential, while ensuring shareholders of the target receive fair value for the target’s assets.

Overcoming Uncertainty and Listing the CVRs on the TSX

CVRs issued in Canadian transactions have frequently been structured as non-transferable contractual rights. This structure has limited holders’ ability to monetize their rights before milestones are achieved and has made independent valuation more difficult. Even in cases in which CVRs were made transferable, exchange listing has remained elusive owing to structural and regulatory considerations.

A key challenge for exchanges and regulators has been uncertainty regarding the satisfaction of milestones. Where milestones depend on subjective judgments or third-party actions with probabilistic outcomes, it can be difficult to establish a transparent, continuously tradable market price. This has been particularly evident in the pharmaceutical and biotechnology sectors, where CVR milestones often hinge on events like successful completion of clinical trials or receipt of regulatory approvals from bodies such as the U.S. Food and Drug Administration or Health Canada. These outcomes are inherently binary, their timing is uncertain and they are heavily influenced by factors outside the issuer's direct control which complicates ongoing price discovery and raises investor-protection considerations for public listing.

The Agnico Eagle CVRs stand in contrast. The milestones, while uncertain, are nonetheless tied to objective, publicly verifiable and standardized metrics: (i) public announcements of gold ounces in mineral reserves on the property and (ii) achievement of commercial production. These are objective facts with established reporting frameworks, not probabilistic third-party approvals. Combined with Agnico Eagle’s undertakings for quarterly material developments reporting and annual reserve disclosures, this structure provided the transparency, measurability and ongoing information flow necessary for the TSX to approve listing on a discretionary basis under the Sandbox program.

This listing demonstrates that, with the right design, CVRs can transition from opaque contractual rights to liquid, market-priced instruments – at least in sectors such as mining, where milestones lend themselves to objective assessment.

The Transaction: A First for Canadian Capital Markets

The CVRs were issued to former securityholders of Rupert Resources Ltd. as partial consideration under the plan of arrangement pursuant to which Agnico Eagle acquired all of the issued and outstanding shares of Rupert Resources. The CVRs entitle holders to contingent cash payments tied to milestones relating to the mining rights held indirectly by Rupert Resources at the time of implementation of the arrangement.

What makes this precedent-setting is not merely that it is the first CVR listing, but how it was achieved:

TSX Sandbox Listing. This listing was approved on a discretionary basis under the TSX Sandbox, which accommodates novel securities that may not meet all standard original listing requirements. This reflects the exchange’s flexibility for innovative structures.

Conditional Exit from Sandbox. The CVRs will exit the Sandbox upon continued compliance with TSX requirements and payment of the first milestone.

Issuer Undertakings. Agnico Eagle committed to quarterly reporting on material developments regarding the acquired property and annual disclosure of gold ounces in mineral reserves within its annual mineral resources and reserves statement.

Eligibility for Investment: A Key Benefit of Exchange Listing

The TSX listing provides important tax advantages. Without a listing on a designated stock exchange, CVRs would not qualify as eligible investments under the Income Tax Act for registered plans, such as RRSPs, RESPs, TFSAs and FHSAs.

By securing the TSX listing, the CVRs qualify as eligible investments for these registered plans, which avoids potential adverse tax consequences that could otherwise arise if unlisted CVRs were held in (or required to be removed from) registered accounts. The listing thus enhances both liquidity and tax efficiency, delivering greater overall value to securityholders who choose to hold their CVRs in registered plans.

A Blueprint for Future Innovation

This transaction establishes a meaningful precedent for listing CVRs on the TSX and expands the toolkit available to dealmakers who are structuring mining and resource M&A transactions in which valuation uncertainty exists regarding future exploration or development milestones.

For securityholders and investors, the listing provides the potential for liquidity and transparent price discovery for an instrument that was often non-transferable and, even if transferable, was illiquid and difficult to value. Holders can now choose to sell their CVRs in the market or retain them to receive future milestone payments, while also benefiting from the ability to hold them tax-efficiently in registered accounts.

Because no formal listing framework for CVRs currently exists, issuers should engage early with the TSX or the relevant exchange. This would allow them to determine what undertakings may be required and to address disclosure issues that securities regulators may raise in their discussions with the exchange. The Agnico Eagle transaction offers a useful precedent that may encourage exchanges to develop more standardized requirements over time. In the meantime, the Sandbox provides valuable flexibility by allowing the TSX to tailor conditions to the specific facts of each issuance. This measured approach – balancing innovation with appropriate safeguards – positions the TSX as a constructive partner for issuers seeking to bring novel structures to market and is likely to serve as a reference point for similar transactions in the mining sector.