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Agnico Eagle and Kirkland Lake Gold merger to create ‘Canadian mining champion’

Mining industry recognition, Mining mergers and acquisitions, Precious metals, Sustainable mining, , , , , ,

Agnico Eagle Mines and Kirkland Lake Gold have entered into an agreement to combine in a merger of equals, with the combined company to continue under the name Agnico Eagle Mines Limited.

The merger will establish the new Agnico Eagle as the gold industry’s highest-quality senior producer, with the lowest unit costs, highest margins, most favourable risk profile and industry-leading best practices in key areas of environmental, social and governance (ESG), the companies said.

Upon closing of the merger, the company is expected to have $2.3 billion of available liquidity, a mineral reserve base of 48 Moz of gold, (969 Mt at 1.53 g/t Au) – which has doubled over the last 10 years, and an extensive pipeline of development and exploration projects to drive sustainable, low-risk growth, they added. Expected production of the two companies for 2021 is approximately 3.4 Moz.

“The merger will create a best-in-class gold mining company operating in one of the world’s leading gold regions, the Abitibi-Greenstone Belt of north-eastern Ontario and north-western Quebec, with superior financial and operating metrics,” Agnico and Kirkland Lake said. “Consolidation within the Abitibi will also provide the new Agnico Eagle with significant value creation opportunities through synergies and other business improvement initiatives. Additionally, the company is established uniquely as the only gold producer in Nunavut and well positioned internationally with profitable and prospective assets in Australia, Finland and Mexico.”

The combined entity is also set to be a leader in energy performance and GHG emissions intensity, with a commitment to be Net Zero by 2050 or earlier, they said.

Under the merger agreement, which the Board of Directors of both companies have unanimously approved, the new Agnico Eagle will be led by a combined board and management team including Sean Boyd (Executive Chair), Tony Makuch (CEO), Ammar Al-Joundi (President), Jeffrey Parr (Vice-Chair of the Board) and Jamie Sokalsky (Lead Director).

The transaction is expected to close in December 2021 or in the March quarter of 2022.

Pursuant to the agreement, Kirkland Lake Gold shareholders will receive 0.7935 of an Agnico Eagle common share for each Kirkland Lake Gold common share held, implying a combined market capitalisation of approximately $24 billion. Upon closing, existing Agnico Eagle and Kirkland Lake Gold shareholders will own approximately 54% and 46% of the combined company, respectively.

Sean Boyd, Agnico Eagle’s Chief Executive Officer, said: “This merger starts a new chapter in Agnico Eagle’s 64-year history and creates the leading low risk global gold company with growing production, low costs and strong ESG leadership. The transaction creates a company with a strong platform of people, assets and financial resources to continue to build and operate a long-term sustainable and self-funding business.

“Kirkland Lake is an excellent cultural fit with Agnico Eagle, and we look forward to working together to further grow our business through exploration, mine development and optimisation of our high-quality asset base. Over time, we believe that the gold industry will continue to evolve and consolidate and with this transaction we are well positioned take advantage of high-quality opportunities and be a true Canadian mining champion.”

Tony Makuch, President and CEO of Kirkland Lake Gold, added: “We are very pleased and excited to be entering into a combination with Agnico Eagle. It is a unique ‘strength-on-strength’ transaction that combines the two global gold producers with the best track records for increasing per share value. The deal creates an industry leader with a dominant position in the Canadian market that is deserving of a premium valuation and is poised to generate superior long-term shareholder value going forward. The transaction represents a true merger of equals, with the business of both companies to benefit from the significant financial strength of the merged company, the extensive pipeline of development and exploration projects to drive future growth, and the potential to realize significant operational and strategic synergies along the Abitibi-Kirkland Lake corridor. It is the right deal for our company and its shareholders, our people, the communities where we operate, and all of our key stakeholder groups.”

Detour Lake acquisition to make Kirkland Lake Gold plus-1.5 Moz/y producer

Mine operation news, Mining finance, Mining mergers and acquisitions, Precious metals, , , , , ,

Kirkland Lake Gold and Detour Gold Corp have entered into a definitive agreement will see the ASX- and TSX-listed miner become a plus-1.5 Moz/y gold producer through the all-share acquisition of Detour and its Detour Lake gold mine, in Ontario, Canada.

Under the terms of the transaction, which values Detour at C$4.9 billion ($3.3 billion), all the issued and outstanding common shares of Detour Gold will be exchanged at a ratio of 0.4343 of a Kirkland Lake Gold common share for each Detour Gold common share. Upon completion of the transaction, existing Kirkland Lake Gold and Detour Gold shareholders will own around 73% and 27% of the pro forma company, respectively.

Kirkland Lake says Detour Lake is a uniquely large-scale, long-life Canadian mine, with current production of around 600,000 oz/y and substantial growth potential.

The deal also solidifies Kirkland Lake’s position as a senior gold producer with pro-forma 2019 output targeted at more than 1.5 Moz and analyst consensus 2019 free cash flow of almost $700 million, Kirkland said.

The deal also increases Kirkland Lake’s mineral reserve base, adding 15.41 Moz to Kirkland Lake Gold’s mineral reserve base and extending its reserve life index by eight years.

The financial strength and technical expertise of the combined company is expected to support the continued optimisation and potential expansion of Detour Lake, Kirkland Lake said, explaining that opportunities exist to significantly increase production at improved unit costs and to expand current mineral reserves and mineral resources.

It also provides exploration upside, with Detour Gold’s land position covering 1,040 km2 along the northernmost sections of the prolific Abitibi Greenstone Belt (including 646 km² on existing Detour Lake property).

Tony Makuch, President and Chief Executive Officer of Kirkland Lake Gold, said: “The acquisition of Detour Gold is an excellent fit for Kirkland Lake Gold. We have already taken two mining operations, Macassa and Fosterville, and transformed them into high-quality assets that generate industry-leading earnings and free cash flow. The addition of Detour Lake provides an opportunity to add a third cornerstone asset that is located in our back yard in northern Ontario.

“Detour Lake will provide the pro forma company with a 20-plus year mine life which provides unparalleled optionality and excellent growth potential for the benefit of all shareholders. The management team at Detour Gold has done an exceptional job in making improvements and building momentum at the mine.

“Once the transaction is completed, we will continue efforts to optimise current operations and commence engineering work to evaluate expansion opportunities at Detour Lake, which we anticipate could lead to significant production growth, improved unit costs and higher levels of mineral reserves and mineral resources.”

Kirkland Lake Gold signs up VRIFY to look for more golden opportunities

Mineral exploration, Mineral project development, Mining finance, Mining services, Mining software, Precious metals, , , ,

VRIFY Technology says it has entered into an agreement with Kirkland Lake Gold to launch the KL Gold Deal Room, a new online corporate development initiative that “enhances the process of identifying and evaluating potential investment opportunities”.

The initiative uses the VRIFY Deal Room platform, a cloud-based 3D presentation and collaboration technology that helps strategic investors and growth-oriented companies, like Kirkland Lake Gold, identify new opportunities to complement existing asset portfolios, VRIFY says.

VRIFY said: “The launch of the KL Gold Deal Room supports Kirkland Lake Gold’s objective to deploy its capital and technical expertise to make new discoveries, develop new mines, secure future gold resources and continue to responsibly deliver value to its shareholders.

“Kirkland Lake Gold has outlined a simple set of criteria for assets which have the potential to complement its growth strategy and will consider possible strategic investments, joint ventures and M&A opportunities. Using the KL Gold Deal Room, companies with assets that require capital, and meet these criteria, are invited to make online submissions to the KL Gold Deal Room using one standardised format that can be accessed anywhere, anytime.”

Stephen de Jong, Founder, President and CEO of VRIFY, said: “At VRIFY, we’re in the business of disrupting the way things have been done and are thrilled to launch the first ever Deal Room with Kirkland Lake Gold. It may be a tough market for commodities but there is no shortage of compelling opportunities out there waiting to be discovered. By leveraging accessible technology, we’re making it possible for growth-focused companies like Kirkland Lake Gold to attract, assess and refine large numbers of investment opportunities.”

He added: “We believe informed decisions are better decisions, and by utilising VRIFY Deal Room, Kirkland Lake Gold will be one of the most informed companies in the world.”

Tony Makuch, President and CEO of Kirkland Lake Gold, said: “At Kirkland Lake Gold, we operate two of the highest-grade, lowest-cost gold mines in the world, and are investing aggressively to continue to grow these operations and ensure they reach their full value potential.

“Supported by high levels of profitability and cash flow, and a strong balance sheet, we are also looking to grow shareholder value  by investing in new, high-quality gold projects that, with the benefit of our capital and expertise, have the potential to become world-class mining operations. We know there are many worthwhile opportunities out there, and we are interested in learning more about them. That’s why we have partnered with VRIFY to launch the KL Gold Deal Room.”