- Write by:
-
Tuesday, November 26, 2019 - 1:58:02 PM
-
683 Visit
-
Print
Mining News Pro - Canada’s Kirkland Lake Gold is buying smaller rival Detour Gold in an all-stock deal worth C$4.9 billion ($3.7 billion) that boosts the already large list of mergers and acquisitions to have swept the sector this year.
According to Mining News Pro - Kirkland is offering 0.4343 shares to Detour Gold shareholders for each share held, which represents a premium of 23.8% to Friday’s closing price.
The transaction, which will help the Toronto-based miner scale up its operations and boost reserves, is expected to generate pre-tax savings of about $75 to $100 million per year, the companies said in the statement.
“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,” Kirkland Lake Gold’s president and chief executive, Tony Makuch, said.
Detour Gold owns the Detour Lake open pit gold mine in northeastern Ontario, which according to Makuch provides Kirkland with the opportunity to add a third “cornerstone asset” located in the company’s back yard.
The miner posted earlier this month record cash flows and net earnings – $0.84 per share – for the July-September period. The quarter, said the company at the time was its best to date, thanks mostly to exceptional results at Fosterville mine, in Australia.
The transaction requires approval by a two-thirds majority vote by Detour Gold shareholders and a majority vote by Kirkland Lake Gold shareholders, in addition to regulatory and court approvals.
Canada-centric
Following the highly publicized multi-billion mergers of Barrick – Randgold and Newmont – Goldcorp early this year, the global gold sector has been going through an anticipated wave of consolidation mostly focused on Canada.
Barrick and Newmont themselves followed their big acts by merging their operations in Nevada, United States, which created the world’s largest gold complex.
“We can expect even more M&A activity in the near future,” Dean Braunsteiner, PwC Canada National Mining Leader prophetically told MINING.com in April. “That creates a cascading effect of further deals as companies sell off non-core assets, which brings new opportunities for management teams to build the next big Canadian mining company.”
Unlike in the previous gold deal spree registered in the early part of the decade, companies are now moving away from a “size for size’s sake” mindset to owning and focusing only on the best assets, Kingsdale Advisors noted in a June report.
The announced Kirkland-Detour deal is just one example of such trend. Once completed, shareholders in both companies will own about 73% and 27%, respectively, of the merged company.
Short Link:
https://www.miningnews.ir/En/News/448980
![More central banks to increase gold reserves within 12 months](/Incsys/Photo.aspx?image=/Uploads/News/20240628213145080.jpg&width=236&height=180)
More central banks plan to add to their gold reserves within a year and more of them expect others to do so as well, due ...
![Iron ore price falls for a third week on China demand woes](/Incsys/Photo.aspx?image=/Uploads/News/20240624134955891.jpeg&width=236&height=180)
Iron ore futures rose for a second straight session on Friday, supported by higher-than-expected hot metal output, ...
![Gold Fields cuts output forecast after bad weather hits new Chile mine](/Incsys/Photo.aspx?image=/Uploads/News/20240624133848590.jpg&width=236&height=180)
Gold Fields on Thursday lowered its annual gold production forecast after bad weather impacted the ramp-up at its new ...
![Congo to buy out UAE partner in gold venture as shipments slump](/Incsys/Photo.aspx?image=/Uploads/News/20240618140832860.jpg&width=236&height=180)
Democratic Republic of Congo is finalizing a deal to take full control of a gold-export joint venture from its Emirati ...
![Gold rush to endure through 2024, though $3,000 mark may prove elusive](/Incsys/Photo.aspx?image=/Uploads/News/20240618140126067.jpg&width=236&height=180)
Gold’s lightning rally to successive record highs shows every sign of continuing in the second half of 2024 as the ...
![Gold rush grips Asia despite near-record prices](/Incsys/Photo.aspx?image=/Uploads/News/20240618135656311.jpg&width=236&height=180)
Demand for gold in Asia is surging despite prices hovering near the record highs it hit in May, industry officials say, ...
![US imposes sanctions on Guyanese mining magnate over alleged fraud](/Incsys/Photo.aspx?image=/Uploads/News/20240618134636586.jpeg&width=236&height=180)
The United States on Tuesday imposed sanctions on Guyanese mining magnate Nazar Mohamed and his son over allegations the ...
![Iron ore price tumbles to 2-month low on concerns over weakening China demand](/Incsys/Photo.aspx?image=/Uploads/News/20240618133915400.jpeg&width=236&height=180)
Iron ore futures fell to a two-month low on Tuesday, weighed down by lingering weak fundamentals and concerns over ...
![New-look Polymetal aims to double gold output with Central Asia M&A](/Incsys/Photo.aspx?image=/Uploads/News/20240618133735806.png&width=236&height=180)
Gold producer Polymetal International plans to double output by 2029 through acquisitions in Central Asia and will halt ...
No comments have been posted yet ...