Agnico Eagle Mines Limited (TSX: AEM) and Kirkland Lake Gold Ltd. (TSX: KL) announced today that they have entered into a merger agreement. The two firms claim that the resulting combination, which will still operate under the Agnico Eagle name, is expected to be “the gold industry’s highest-quality senior producer”.
Under the agreement, each Kirkland Lake Gold share held will be exchanged for 0.7935 of an Agnico Eagle common share. Upon the transaction’s close, Agnico Eagle and Kirkland Lake Gold shareholders will own approximately 54% and 46% of the resulting merger, respectively.
The combined company, with a projected market capitalization of US$24 billion, is expected to consolidate a total of 48 million gold ounces of mineral reserve base, and a total of US$2.3 billion in available liquidity. For Q2 2021, Agnico Eagle reported US$966.3 million in revenue while Kirkland Lake Gold posted US$662.7 million in revenue.
The proposed transaction has already the nod of both the Canadian miners’ board of directors. Kirkland Lake Gold will require an in-favor vote from 66 2/3% of its shareholders while Agnico Eagle needs a majority of its respective shareholders to vote for the merger. Both stockholders’ meetings are expected to happen in Q4 2021.
Following the approval, the transaction is expected to close in December 2021 or Q1 2022, subject to customary closing conditions. Should the merger push through, Kirkland Lake Gold shares will be delisted from TSX, NYSE, and ASE while Agnico Eagle shares will continue to trade on the exchanges it is currently listed.
Agnico Eagle Mines last traded at $63.81 while Kirkland Lake Gold last traded at $55.70 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.