In a sector where investor confidence is extremely low, mining companies re-kindled efforts to explore alliances and partnerships to bring promising projects online and share the risk between parties during the recently concluded in-person Colorado mining conferences.
On Tuesday, global miners Agnico Eagle Mines Ltd (AEM) and Kirkland Lake Gold (KL) announced that they have agreed on a merger of equals, with the combined company to continue under the former’s name.
According to Bloomberg, executives at Agnico Eagle and Kirkland Lake began talking more than two years ago about combining the Toronto-based miners. Upon deal completion that is expected by Q1/22, Agnico Eagle Mines’ existing shareholders will have a 54% stake in the combined company, and the remaining 46% will be held by Kirkland Lake Gold’s shareholders.
The proposed merger will benefit Agnico, providing increased diversity by adding low-cost mines, incremental production and a strengthened ability to generate free cash flow that can be used to fund growth projects located in top-tier jurisdictions.
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