Kirkland Lake Gold and Agnico Eagle Mines have completed their merger of equals that will see the two companies continue under the Agnico Eagle banner.
First announcing their intention to merge in late September, the two gold miners have been working towards the merger for months, passing through a number of hoops to make it happen.
This involved gaining relevant approvals including shareholder endorsement and receiving the consent of Australia’s Foreign Investment Review Board (FIRB).
The two also gained recommendations from leading independent proxy advisory firms Institutional Shareholder Services Inc. and Glass, Lewis & Co to assist the shareholder vote.
With the merger, Canada-based Agnico Eagle has become a company with a market capitalisation of $US22.4 billion which will remain listed on the Toronto Stock Exchange and New York Stock Exchange.
Kirkland Lake has delisted from the Australian Securities Exchange (ASX). Agnico Eagle said it had issued approximately 209,274,263 common shares to former Kirkland Lake shareholders as consideration for their shares.
Kirkland Lake and Agnico Eagle’s combined mineral reserve base contains 48 million ounces of gold at 969 million tonnes at 1.53 grams per tonne while the new Agnico Eagle is expected to have $US2.3 billion of liquidity.
Kirkland Lake operates the Fosterville gold mine in Victoria, which is one of the country’s largest gold mining operations.
However, the merger will focus on consolidating the Abitibi greenstone belt in Canada which will enhance the synergies of both companies.
“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,” Kirkland Lake president and chief executive officer Tony Makuch said in September.
“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 realise significant operational and strategic synergies along the Abitibi-Kirkland Lake corridor.”
The merged company’s board will contain seven directors from Agnico Eagle and six from Kirkland Lake, with the senior management team including Makuch as chief executive officer.