Kirkland acquisition of Detour Gold : Kirkland Lake Gold has signed a CAD 4.01 billion ($3.01 billion) deal to acquire rival Canadian gold mining company Detour Gold, as per the latest mining acquisition news.
Based in Toronto, Detour Gold is a mid-tier gold producer, which has a 100% stake in the Detour Lake gold mine in northeastern Ontario. Acquired by Detour Gold in 2007, the Detour Lake gold mine has been in production since 2013 through open pit operations.
The Detour Lake open pit mine is currently among the largest gold producing mines in Canada. Its production is said to be over 600,000 ounces per year while its mineral reserves are 15.4 million ounces of gold. A further expansion of the Detour Lake gold mine is being planned by Kirkland Lake Gold should the deal go through.
Kirkland Lake Gold, on the other hand, has gold mining operations across Canada and Australia, where it had produced 723,701 ounces in 2018. The company’s assets include the Macassa gold mine in Northern Ontario and the Fosterville gold mine in Victoria, Australia.
Commenting on Kirkland acquisition of Detour Gold, Tony Makuch – President and CEO 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.”
As per the terms of the deal, Detour Gold will exchange each of its shares for 0.4343 of Kirkland Lake Gold shares. Following the completion of the merger, existing Kirkland Lake Gold and Detour Gold shareholders will hold nearly 73% and 27% stakes in the enlarged Canadian gold mining company.
Mick McMullen – President and CEO of Detour Gold, commenting on Kirkland acquisition of Detour Gold, said: “Our significant mineral resource base, exploration potential, and long-life production profile are a great addition to the Kirkland Lake Gold portfolio, and we are excited that we can share in the growth opportunities that exist going forward.
“Importantly, Kirkland Lake Gold’s strong balance sheet and cash generating capabilities will support additional investment in the exploration of Detour Lake to help unlock further growth potential.”
Kirkland acquisition of Detour Gold, which is subject to shareholder and court approvals, regulatory approvals, and meeting of certain other customary closing conditions customary, is expected to be wrapped up by the end of January 2020.
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