Photo by: Duane Daws
VANCOUVER (miningweekly.com) – Fellow TSX-listed gold miner Kirkland Lake Gold announced this week that it will buy Newmarket Gold in a $1-billion all-scrip deal with an implied value of C$1.01-billion.
Once the deal has been completed, the combined company, called Kirkland Lake Gold, will have a market cap of nearly C$2.4-billion with yearly output of more than 500 000 oz of gold, spread across seven mines in Ontario and Australia.
The merger with Kirkland comes a little over a year after Newmarket completed a transformational merger of its own, pushing production up to about 200 000 oz/y.
Under the agreement, Newmarket shareholders will receive 0.475 shares of the combined Kirkland company for each existing share of Newmarket.
Kirkland also comes into the deal after completing its own set of acquisitions, including Ontario-based St Andrew Goldfields last November.
Kirkland Lake shareholders’ stock will be exchanged at a ratio of 2.1053 Newmarket shares per Kirkland share. Kirkland will emerge from the transaction with 57% ownership of the combined company, and Kirkland’s CEO Tony Makuch will head the combined company.
An interesting link between the two companies is Kirkland Lake chairperson Eric Sprott, who owns 13.5% of Newmarket’s stock and 6.7% of Kirkland’s outstanding stock.
The deal is expected to close by the end of the year, subject to customary approvals.