Gold Miners Agnico Eagle Mines and Kirkland Lake to Merge. Both Stocks Fall. – Barron’s

Text size

David Gray/AFP via Getty Images

Agnico Eagle Mines and Kirkland Lake Gold will merge, create a Canadian gold mining giant with a combined market capitalization of about $24 billion.

Shares of both companies were falling Tuesday. Agnico (ticker: AEM) dropped 2.33% to $49.37, while Kirkland (KL) was putting in a steeper loss, down 9.39% to $39.78.

Agnico shareholders will hold 54% of the stock, and the new company will operate under Agnico’s name, the company said. Kirkland shareholders will receive 0.78935 of an Agnico common share for each Kirkland share.

“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,” said Tony Makuch, Kirkland president and CEO.

The combined company is expected to have $2.3 billion of available liquidity, a mineral reserve base of 48 million ounces of gold, and a pipeline for development and exploration projects.

Agnico expects the deal will close in December or in the first quarter of 2022. Shares of the new company will continue trading on the Toronto Stock Exchange and the New York Stock Exchange. Makuch will continue to be CEO, and current Agnico CEO Sean Boyd will be executive chair of the board.

In recent years, the gold mining industry has seen a wave of consolidation. In 2018, gold giant Barrick Gold (GOLD) bought Randgold Resources for $6 billion in stock. A few months later, Newmont (NEM) acquired Goldcorp in a $10 billion all-stock deal.

“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,” Boyd said.

Write to Sabrina Escobar at