Agnico Eagle to buy Kirkland Lake Gold in $10.7 billion mega-merger

Canada’s Agnico Eagle Mines and Kirkland Lake Gold have announced a US$10.68 billion merger of equals, creating a company with a reserve base of 48 million ounces of gold and an extensive pipeline of development and exploration projects around the world.

The companies said the deal will establish the new Agnico Eagle as the gold industry’s highest-quality senior producer, with the lowest unit costs, highest margins, most favourable risk profile and industry-leading ESG practices.

“The merger will create a best-in-class gold mining company operating in one of the world’s leading gold regions; the Abitibi-Greenstone Belt of Northeastern Ontario and Northwestern Quebec, with superior financial and operating metrics,” the joint statement read.

“Consolidation within the Abitibi will also provide the new Agnico Eagle with significant value creation opportunities through synergies and other business improvement initiatives.” The new company is also uniquely positioned as the only gold producer in Nunavut and has profitable and prospective assets in Australia, Finland and Mexico.

Kirkland Lake’s Tony Makuch will be the chief executive of the combined company, while Agnico’s vice-chair and CEO Sean Boyd will become the executive chair.

The deal resembles a first piece of major gold sector M&A for some time, following a post-pandemic slump in activity. Earlier this month, South African miner AngloGold Ashanti agreed to acquire TSX-listed Corvus Gold in a deal valuing the exploration firm at C$570 million.