Agnico-Eagle Mines Limited makes a strategic investment in Gold Eagle Mines Ltd.



    TSX: GEA

    TORONTO, June 26 /CNW/ - Gold Eagle Mines Ltd. (TSX: GEA) ("Gold Eagle"
or the "Company") is pleased to announce that Agnico-Eagle Mines Limited
("Agnico-Eagle") has made a strategic investment in Gold Eagle today through a
non-brokered private placement of Units of Gold Eagle. In addition, Mr.
Eberhard Scherkus P.Eng., the President and COO of Agnico-Eagle has been
appointed a Director of Gold Eagle.

    Agnico-Eagle Strategic Investment

    Agnico-Eagle purchased a total of 5,524,862 Units at $9.05 per Unit for
gross proceeds to Gold Eagle of approximately $50 Million. Each Unit consists
of one common share and one half of a share purchase warrant of Gold Eagle.
Each whole warrant entitles the holder to purchase one common share of Gold
Eagle at $10.15 for a period of 36 months. As a result of this private
placement Agnico-Eagle now owns 5.18% of Gold Eagle on an issued and
outstanding basis and 7.16% on a fully diluted basis.
    Gold Eagle's principal asset is the high grade Bruce Channel Discovery
("BCD"), located at the western part of the prolific Red Lake Trend in
northwestern Ontario. The Red Lake Trend has produced over 20 million ounces
of gold and is host to Goldcorp Inc.'s world class Campbell Mine, Red Lake
Mine, and Goldcorp Inc's now closed Cochenour-Willans Mine.
    Sean Boyd, Vice Chairman and CEO of Agnico-Eagle commented, "Our
investment in Gold Eagle is a strong indication of the quality and potential
of the high grade Bruce Channel Discovery. Agnico-Eagle has recently
accumulated a property position in the Red Lake area and this investment
increases our exposure to this world class gold camp and is consistent with
our strategy of investing in promising gold development opportunities. We look
forward to using our exploration and mine development skills to assist Gold
Eagle in increasing the size of the deposit and advancing the project towards
feasibility."
    Simon Lawrence, President and CEO of Gold Eagle commented "We are very
pleased with this timely investment from Agnico-Eagle, a company which has
proven expertise in the development of underground mines. Proceeds from
Agnico-Eagle's private placement will be utilized for our shaft sinking and
underground development program."

    Appointment of Eberhard Scherkus to the Board

    Gold Eagle is pleased to welcome Mr. Scherkus to the Board of Gold Eagle.
Mr. Scherkus, a graduate of McGill University (B.Sc.), is the current
President and COO of Agnico-Eagle and has been with Agnico-Eagle for more than
23 years. Prior to joining Agnico-Eagle, Mr. Scherkus was Assistant Manager
and Chief Geologist at the Cochenour-Willans Mine between 1979 and 1984, and
the Mine Superintendant at the Dickenson Mine (now called the Red Lake Mine)
from 1984 to 1985. Mr. Scherkus brings much knowledge and expertise to Gold
Eagle in the development of the Bruce Channel Discovery.
    In order to permit the appointment of Mr. Scherkus as a Director of Gold
Eagle, Mr. Brent Peters has agreed to step down from the Board. Mr. Peters
will remain the Chief Financial Officer of Gold Eagle.
    Upon completion of this financing Gold Eagle's cash position will be
approximately $147.6 million. As such, Gold Eagle believes it is very well
funded for its significant 24 month surface step-out drilling program from the
BCD towards the Finn Zone, and also to substantially complete its Advanced
Underground Development Program.

    About Gold Eagle

    Gold Eagle Mines Ltd is a Canadian based junior natural resource company
developing a significant new gold discovery in the prolific Red Lake gold
camp, located in northwestern Ontario, Canada.

    Forward-Looking Statement

    The statements made in this News Release may contain forward-looking
statements that may involve a number of risks and uncertainties. Actual events
or results could differ materially from the Company's expectations and
projections. Accordingly, readers should not place undue reliance on
forward-looking statements. For a more detailed discussion of such risks and
other factors, refer to Gold Eagle's filings with Canadian securities
regulators available on www.sedar.com or the Company's website at
www.goldeaglemines.com

    The Toronto Stock Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this release and the
    information contained herein.

    %SEDAR: 00024756E




For further information:

For further information: please feel free to contact our offices at:
Tel: (416) 867-8998, Fax: (416) 867-9393, www.goldeaglemines.com

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GOLD EAGLE MINES LTD.

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