(All amounts expressed in U.S. dollars unless
otherwise noted)
TORONTO, Nov. 1, 2021
/PRNewswire/ - Agnico Eagle Mines Limited (TSX: AEM) (NYSE:
AEM) ("Agnico Eagle" or the "Company") and
Kirkland Lake Gold Ltd. (TSX:KL, NYSE:KL, ASX:KLA)
("Kirkland Lake Gold") are
pleased to announce today that they have filed a joint management
information circular dated October 29,
2021 (the "Joint Circular") and related meeting and
proxy materials in connection with their respective special
meetings of shareholders (the "Meetings") scheduled to be
held on November 26, 2021. The
purpose of the Meetings is to seek approval for certain matters in
connection with their previously announced merger of equals (the
"Merger") to be effected by way of a plan of arrangement
under the Business Corporations Act (Ontario).
The Merger
Pursuant to the merger agreement dated September 28, 2021 (as amended, the "Merger
Agreement"), Kirkland Lake Gold
shareholders ("Kirkland Shareholders") will receive 0.7935
of an Agnico Eagle common share (the "Agnico Shares") for
each Kirkland Lake Gold common share
(the "Kirkland Shares") held. The Merger will require the
affirmative vote of at least two-thirds of the votes cast by
holders of Kirkland Shares present (virtually) or represented by
proxy and entitled to vote at the special meeting of Kirkland
Shareholders (the "Kirkland Meeting"). The issuance of
shares by Agnico Eagle in connection with the Merger is subject to
the approval of at least a majority of votes cast by holders of
Agnico Shares (the "Agnico Shareholders") present
(virtually) or represented by proxy and entitled to vote at the
special meeting of Agnico Shareholders (the "Agnico
Meeting"). Immediately upon completion of the Merger, existing
Agnico Shareholders and existing Kirkland Shareholders are expected
to own approximately 54% and 46% of the Agnico Shares in the
combined company, respectively (on a non-diluted basis).
Board of Directors' Recommendations
The Board of Directors of each of Agnico Eagle and Kirkland Lake Gold have unanimously approved the
Merger and recommend that their respective shareholders vote
"FOR" the matters put before them at the respective
Meetings.
Reasons for the Merger
In recommending the Merger, the Board of Directors of Agnico
Eagle and the Board of Directors of Kirkland Lake Gold considered a number of
factors including the following:
- Creating a World-Leading Senior Gold Producer. The
Merger will create the combined company which will continue under
the name Agnico Eagle Mines Limited, which will be a high-quality
senior gold producer with the lowest all-in sustaining cost per
ounce of gold, highest EBITDA margin and lowest-risk portfolio of
operating mines among its senior gold peers. The combined company
is expected to produce approximately 3.4 million of ounces of gold
in 2021 on a pro forma basis.
- Enhances Position in one of the Most Prolific and
Prospective Gold Regions in the World. The combined company is
expected to be Canada's leading
gold producer, with anticipated production in the country of
approximately 2.5 million ounces of gold in 2021, or approximately
75% of 3.4 million ounces of total expected gold production, on a
pro forma basis. The combined portfolio will be anchored by
high-quality gold production in Ontario, Quebec and Nunavut in Canada, as well as at the Fosterville Mine in
Victoria, Australia, Kittila in
the Lapland region of Northern
Finland and Pinos Altos and
La India in Northern Mexico.
- Unique Synergies to Drive Significant Value
Creation.
-
- The combination of Agnico Eagle and Kirkland Lake Gold creates a unique opportunity
to unlock significant operational, development and strategic
synergies along the Abitibi-Kirkland Lake corridor and to leverage
sector-leading technical expertise to create additional value
across the portfolio.
- The combined company is expected to generate over $0.8 billion and $2
billion in pre-tax synergies and optimization benefits over
the next five and ten years, respectively.
- While substantially unquantified, the Merger also offers
significant potential for more efficient sharing of established
competencies developed individually by Kirkland Lake Gold and Agnico Eagle, as well as
significant opportunity to successfully innovate as operations are
modernized.
- Maintain a Strong Leadership Team with a Proven
Track-Record. The combined company will benefit from the
combination of two strong management teams with proven
track-records of growing per share value in key metrics such as
production, mineral reserves, cash flow and net asset value.
- Unparalleled Track Record of Growing Mineral Reserves and
Mineral Resources. The Merger will combine the only two
companies among senior gold peers to have grown mineral reserves
and production per share over the last 10 years through consistent
investment in exploration and value-added acquisitions.
- Industry-Leading ESG with Ability to make Long-Term ESG
Investments. The combined company is positioned to be a leader
in environmental, social and governance initiatives, with one of
the lowest greenhouse gas emission rates per ounce, and will have
an enhanced ability, through the sharing of established
competencies, joined forces on innovation and scale, to be a more
effective collaborator with key suppliers, government and
communities, and to become net zero by 2050 or sooner.
- Enhances and Adds Flexibility to an Attractive Minesite and
Project Pipeline. The Merger will combine a robust pipeline of
growth projects and exploration opportunities. These projects are
located in existing mining camps and are expected to drive
manageable, relatively low-risk, high-return production growth over
the next decade and more. For example, there is an opportunity to
develop Agnico Eagle's Kirkland
Lake area greenfield development assets, with the benefit of
Kirkland Lake Gold's established
infrastructure at the Macassa Mine and the Holt Complex.
- Provides the Financial Strength to Increase Capital
Distributions to Shareholders While Investing in Growth
Projects. The increased financial strength of the combined
company is expected to provide enhanced financial flexibility to
fund both the robust pipeline of growth projects and to build on a
proven track record of growing sustainable capital returns to
shareholders while also maintaining a strong investment-grade
balance sheet.
- Strategic Alternative Process. The Board of Directors of
Kirkland Lake Gold has periodically
reviewed a range of strategic alternatives for creating shareholder
value and in the ordinary course of business Kirkland Lake Gold has had regular engagement
with several industry peers in that regard, including other
potential transactions. During the summer of 2021, Kirkland
provided due diligence access in connection with a potential change
of control transaction with two of the most logical prospective
counterparties, did not receive any compelling offers and
determined, supported by analysis from its financial advisors, that
the Merger was the best way to maximise value for Kirkland
Shareholders over the long term in light of the significant
synergies expected to be realized by the combined company.
- Extensive Due Diligence and Arm's Length
Negotiations. The Arrangement and the terms of the
Merger Agreement are the result of extensive due diligence and a
comprehensive negotiation process, undertaken with the oversight
and participation of Agnico Eagle's and Kirkland Lake Gold's respective legal counsel
and financial advisors.
- Stakeholder Analysis. The terms of the Merger Agreement
treat all stakeholders of Agnico Eagle and Kirkland Lake Gold, respectively, equitably and
fairly.
Additional details with respect to the reasons for the Merger as
well as its potential benefits and risks are described in the Joint
Circular, which Agnico Shareholders and Kirkland Shareholders are
urged to read carefully.
Approvals and Conditions to Closing
Completion of the Merger is subject to shareholder and court
approvals, approval of the Australian Foreign Investment Review
Board ("FIRB Approval"), and the satisfaction or waiver of
other customary closing conditions. The Toronto Stock Exchange (the
"TSX") has conditionally approved the listing of the Agnico
Shares to be issued in connection with the Merger, the Merger has
been approved under the Competition Act (Canada), and exemptive relief has been granted
by the Australian Securities and Investments Commission from
compliance with certain prospectus and share sale requirements. It
is currently expected that the effective date of the Merger will
occur as early as December 2021 or
during the first quarter of 2022.
The Meetings
In light of the ongoing impact of COVID-19 and the associated
public health measures, Agnico Eagle and Kirkland Lake Gold will be conducting separate
virtual-only Meetings via live webcast. Agnico Eagle and
Kirkland Lake Gold believe that a
virtual meeting gives all shareholders an equal opportunity to
participate regardless of their geographic location or the
particular constraints, circumstances or risks that they may be
facing as a result of COVID-19. Agnico Eagle and Kirkland Lake Gold shareholders will not be able
to attend the Meetings in person.
The Agnico Meeting will be held online at 10:00 a.m. (Toronto time) on November 26, 2021 in a virtual-only format, which
will be conducted via live webcast available online using the TSX
Trust virtual shareholder meeting platform at
https://virtual-meetings.tsxtrust.com/1233, password "agnico2021"
(case sensitive). The Kirkland Meeting will be held online at
11:00 a.m. (Toronto time) on November 26, 2021 in a virtual-only format, which
will be conducted via live webcast available online using the TSX
Trust virtual shareholder meeting platform at
https://virtual-meetings.tsxtrust.com/1231, password "kirkland2021"
(case sensitive). Agnico Eagle and Kirkland
Lake Gold shareholders of record as of the close of business
on October 13, 2021 will be eligible
to vote at the respective Meetings.
Mailing of the Joint Circular and related meeting and proxy
materials has commenced and shareholders of Agnico Eagle and
Kirkland Lake Gold should expect to
receive their respective meeting materials shortly. Agnico Eagle
and Kirkland Lake Gold shareholders
are encouraged to read the Joint Circular and its appendices
carefully and in their entirety. The Joint Circular has been filed
under Agnico Eagle's and Kirkland Lake
Gold's respective issuer profiles on SEDAR at www.sedar.com
and EDGAR at www.sec.gov.
How to Vote
All shareholders are strongly encouraged to submit their
completed form of proxy (in the case of registered shareholders) or
voting instruction form (in the case of non-registered shareholders
and, in the case of Kirkland Lake
Gold, holders of Kirkland CHESS Depositary Interests
("Kirkland CDIs") in Australia), or alternatively, to vote over the
internet or by other means, in each case, well in advance of the
Meetings and in accordance with the instructions included in the
Joint Circular and in the form of proxy or voting instruction form,
as applicable, so that as many shares as possible are represented
at the Meetings.
Agnico Shareholders must vote before 10:00 a.m. (Toronto time) on November 24, 2021 (or by 10:00 a.m. (Toronto time) on the day other than a
Saturday, Sunday or statutory or civic holiday which is at least 48
hours prior to any adjourned or postponed Agnico Meeting).
Kirkland Shareholders must vote before 11:00 a.m. (Toronto time) on November 24, 2021 (or by 11:00 a.m. (Toronto time) on the day other than a
Saturday, Sunday or statutory or civic holiday which is at least 48
hours prior to any adjourned or postponed Kirkland Meeting).
Holders of Kirkland CDIs must complete their voting instructions
before 11:00 a.m. (Toronto time) on November 23, 2021 in order to allow sufficient
time to collate the votes of such holders and submit them to
Kirkland Lake Gold's transfer agent
prior to the proxy cut-off time.
Detailed instructions for how to vote and participate at each
Meeting are included in the Joint Circular and a copy of the
applicable TSX Trust Virtual Meeting Guide is available on Agnico
Eagle's and Kirkland Lake Gold's
respective issuer profiles on SEDAR at www.sedar.com and EDGAR at
www.sec.gov. If you have questions regarding the portal for the
Meetings or require assistance in accessing the websites for the
Meetings, you may contact tsxtvgminfo@tsx.com.
Shareholder Questions and Assistance
If you have any questions regarding the Agnico Meeting, please
contact Agnico Eagle's strategic shareholder advisor and proxy
solicitation agent, Laurel Hill Advisory Group, by telephone at
1-877-452-7184 (toll- free in North
America) or at 1-416-304-0211 (for collect calls outside of
North America), or by email at
assistance@laurelhill.com.
If you have any questions about the Kirkland Meeting, please
contact Kirkland Lake Gold's
strategic shareholder advisor and proxy solicitation agent,
Kingsdale Advisors by telephone at 1-877-659-1824 (toll-free in
North America), at 1-800-155-612
(toll free in Australia) or at
1-416-867-2272 (collect calls outside of North America), or by email at
contactus@kingsdaleadvisors.com.
About Agnico Eagle Mines Limited
Agnico Eagle is a senior Canadian gold mining company, producing
precious metals from operations in Canada, Finland and Mexico. It has a pipeline of high-quality
exploration and development projects in these countries as well as
in the United States and
Colombia. Agnico Eagle is a
partner of choice within the mining industry, recognized globally
for its leading environmental, social and governance practices. The
Company was founded in 1957 and has consistently created value for
its shareholders, declaring a cash dividend every year since
1983.
About Kirkland Lake Gold Ltd.
Kirkland Lake Gold Ltd. is a low-cost senior gold producer
operating in Canada and
Australia that is targeting
1,300,000 - 1,400,000 ounces of production in 2021. The production
profile of Kirkland Lake Gold is
anchored by three high-quality operations, including the Macassa
Mine and Detour Lake Mine, both located in Northern Ontario, and the Fosterville Mine
located in the state of Victoria,
Australia. Kirkland Lake
Gold's solid base of quality assets is complemented by
district scale exploration potential, supported by a strong
financial position, extensive management expertise and an
overriding commitment to safe, responsible mining.
Cautionary Note Regarding Forward-Looking Information
The information in this news release has been prepared as at
November 1, 2021. Certain statements
in this news release, referred to herein as "forward-looking
statements", constitute "forward-looking statements" within the
meaning of the United States
Private Securities Litigation Reform Act of 1995 and
"forward-looking information" under the provisions of Canadian
provincial securities laws.
All statements, other than statements of historical fact, that
address circumstances, events, activities or developments that
could, or may or will occur are forward-looking statements. These
forward-looking statements can be identified by the use of words
such as "anticipate", "believe", "continue", "could", "estimate",
"expect", "future", "ongoing", "plan", "possible", "potential",
"may", "seek", "should", "will", "would" or the negative of such
terms and similar expressions. Forward-looking statements in this
news release include, but are not limited to statements and
information concerning: the Meetings; the reasons for, and
anticipated benefits of, the Merger to the parties and their
respective securityholders, including corporate, operational,
financial, scale and other synergies and the timing thereof; the
structure, steps, timing and effects of the Merger; the combined
company's future plans, market and growth profile, operating
margins, operating costs and overall strategy and performance;
estimates of future gold production; estimates regarding future
cost reductions, synergies, including pre-tax synergies and
optimization benefits and expectations of improved efficiencies,
financial flexibility, future innovation and integration
opportunities; comparisons of the combined company to senior gold
peers; expectations regarding the combined company's environmental,
social and governance initiatives; expectations regarding the
development of the combined company's development assets and
ability to fund growth projects; the anticipated mineral resources
and mineral reserves of the combined company; the receipt and
timing of the final order ("Final Order") of the Ontario
Superior Court of Justice (Commercial List) (the "Court")
and the effective date of the Merger; the satisfaction of
conditions for listing the Agnico Shares issuable under the Merger
on the TSX and the New York Stock Exchange and the timing thereof;
the timing, receipt and conditions of required regulatory, Court
and shareholder approvals for the Merger, including but not limited
to the receipt of FIRB Approval and the approval of the Kirkland
Shareholders and the Agnico Shareholders; the ability of Agnico
Eagle and Kirkland Lake Gold to
satisfy the other conditions to the Merger; the composition of the
shareholders of the combined company; the anticipated dividend
policy and capital allocation practices of the combined company
following completion of the Merger; and the expected operations and
capital expenditure plans for the combined company following
completion of the Merger. The combined and/or pro forma
financial information included in this news release does not
reflect what the actual financial and operational results would
necessarily have been had Agnico Eagle and Kirkland Lake Gold operated as a single combined
company for the periods presented, and such information does not
purport to project the combined company's financial results or
results of operations for any future period.
Forward-looking statements are necessarily based upon a number
of factors and assumptions that, while considered reasonable by
Agnico Eagle and Kirkland Lake Gold
as of the date of such statements, are inherently subject to
significant business, economic, operational, and other risks,
uncertainties, contingencies and other factors, including those
described below, which could cause actual results, performance or
achievements of Agnico Eagle and Kirkland
Lake Gold to be materially different from results,
performance or achievements expressed or implied by such
forward-looking statements and, as such, undue reliance must not be
placed on them. Forward-looking statements are also based on
numerous material factors and assumptions, including as described
in this news release, including with respect to: the ability of
Agnico Eagle and Kirkland Lake Gold
to satisfy, in a timely manner, the other conditions to the closing
of the Merger and the completion of the Merger on expected terms;
the ability to successfully integrate Agnico Eagle and Kirkland Lake Gold in a timely manner following
the completion of the Merger; Agnico Eagle's and Kirkland Lake Gold's present and future business
strategies; operations performance within expected ranges;
anticipated future production and cash flows; local and global
economic conditions and the environment in which Agnico Eagle and
Kirkland Lake Gold will operate in
the future; the price of gold, copper, silver and other key
commodities; projected mineral grades; international exchange
rates; anticipated capital and operating costs; and the
availability and timing of required stock exchange, regulatory,
governmental and other approvals for the completion of the
Merger.
Many factors, known and unknown, could cause actual results to
be materially different from those expressed or implied by such
forward-looking statements. Such risks include, but are not limited
to: the failure of Agnico Eagle and Kirkland Lake Gold to receive, in a timely
manner and on satisfactory terms, the necessary regulatory, stock
exchange, Court and shareholder approvals, including FIRB Approval,
the approval of the Kirkland Shareholders and the Agnico
Shareholders and the Final Order; the significant transaction costs
or unknown liabilities to otherwise satisfy the conditions to the
completion of the Merger, in a timely manner, or at all; the
failure to realize the anticipated benefits of the Merger in the
expected timeframes, or at all; and the additional risk factors set
out in the Joint Circular, including under the heading "Risk
Factors". Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
made. For a more detailed discussion of such risks and other
factors that may affect Agnico Eagle's and Kirkland Lake Gold's ability to achieve the
expectations set forth in the forward-looking statements contained
in this news release, see also the AIF and MD&A of Agnico Eagle
and Kirkland Lake Gold,
respectively, filed under their respective profiles on SEDAR at
www.sedar.com and included in Agnico Eagle's and Kirkland Lake Gold's Form 40-F filed on EDGAR at
www.sec.gov, as well as Agnico Eagle's and Kirkland Lake Gold's other filings with the
Canadian securities regulators and the SEC and Kirkland Lake Gold's filings on the Australian
Stock Exchange. Other than as required by law, Agnico Eagle and
Kirkland Lake Gold do not intend,
and do not assume any obligation, to update these forward-looking
statements.
Non-GAAP Measures
The information in this news release includes the following
non-GAAP financial measures: all-in sustaining costs per ounce of
gold sold ("AISC") and EBITDA margin. These financial
measures do not have any standardized meaning prescribed by IFRS
and are therefore unlikely to be comparable to similar measures
presented by other issuers, even as compared to other issuers who
may also be applying the World Gold Council ("WGC")
guidelines, which can be found at http://www.gold.org. Management
of Agnico Eagle and Kirkland Lake
Gold believe that the use of these non-GAAP measures will
assist analysts, investors and other stakeholders of the companies
in understanding the costs associated with producing gold,
understanding the economics of gold mining, assessing the
companies' operating performance, the combined company's ability to
generate free cash flow from current operations and to generate
free cash flow on an overall company basis, and for planning and
forecasting of future periods. However, AISC does have limitations
as an analytical tool as it may be influenced by the point in the
life cycle of a specific mine and the level of additional
exploration or expenditures a company has to make to fully develop
its properties. Accordingly, these non-GAAP measures should not be
considered in isolation, or as a substitute for, analysis of the
companies; results as reported under IFRS. Further information
relating to non-GAAP measures is set out in the Joint Circular
under the heading "Joint Management Information Circular –
Non-GAAP Financial Performance Measures". A reconciliation
of certain the non-GAAP measures presented in this news release is
contained in each of Agnico Eagle's and Kirkland Lake Gold's most recently filed annual
MD&A, which are available under their respective profiles on
SEDAR at www.sedar.com.
Third Party Data
Certain comparisons of the combined company to its senior gold
peers (such as all-in sustaining cost per ounce, EBITDA margin and
portfolio risk) are based on data obtained from Bloomberg, The
Fraser Institute, equity research reports or public disclosure of
the senior gold peers, obtained as of September 27, 2021 (unless otherwise stated).
Bloomberg is a software, data and media company which delivers
business and market news, data and analysis. The Fraser Institute
is a Canadian think-tank that produces research on a number of
topics, including energy, natural resources and the environment. An
equity research report is a document prepared by a research analyst
at a financial institution that provides a recommendation on
whether an investor should buy, hold, or sell shares of a public
company and often includes target price, investment thesis,
valuation, and risks assessment and are available from numerous
sources, including Bloomberg. Information publicly disclosed by the
senior gold peers includes continuous disclosure documents filed by
the senior gold peers on SEDAR and EDGAR, and such documents
include statements of mineral reserves and mineral resources,
historical production figures and cost and production guidance.
Neither Bloomberg nor The Fraser Institute has any affiliation to
Agnico Eagle or Kirkland Lake
Gold.
Where figures for the combined company are compared to its
senior gold peers, the data from Bloomberg, The Fraser Institute,
equity research reports or public disclosure, as applicable, has
been used to ensure consistency in the compared measures across the
combined company and the comparison group. Neither Agnico Eagle nor
Kirkland Lake Gold has the ability
to verify the Bloomberg, The Fraser Institute, equity research
reports or public disclosure figures and the non-GAAP financial
performance measures used may not correspond to the non-GAAP
financial performance measures calculated by Agnico Eagle,
Kirkland Lake Gold or any of the
senior gold peers.
Comparative Measures Based on Third Party Data
"Highest EBITDA margin" is a non-GAAP financial performance
measure based on estimates of this figure obtained from the most
recent equity research reports prepared in respect of Agnico Eagle,
Kirkland Lake Gold and the senior
gold peers obtained as of September 27,
2021. This term has no standardized meaning under IFRS, and
therefore may not be comparable to similar measures presented by
other companies. Financial comparisons between the combined company
and its senior gold peers are made on the basis of the data
presented in the equity research reports which may not be
calculated in the same manner as Agnico Eagle and Kirkland Lake Gold calculate comparable
measures.
"Lowest all-in sustaining cost" is a non-GAAP financial
performance measure based on the most recent 2021 guidance for each
of Agnico Eagle, Kirkland Lake Gold
and the senior gold peers as of September
27, 2021, sourced from each entity's public disclosure. This
term has no standardized meaning under IFRS, and therefore may not
be comparable to similar measures presented by other companies.
Financial comparisons between the combined company and its senior
gold peers are made on the basis of the data presented by each
entity in its public disclosure which may not be calculated in the
same manner.
"Lowest-risk portfolio" is an assessment of risk based on data
from The Fraser Institute's "Survey of Mining Companies 2020" (the
"Fraser Report") and historical production data for calendar
year 2020 included in the public disclosure of Agnico Eagle,
Kirkland Lake Gold and each senior
gold peer. The risk assessment is determined for the combined
company and each senior gold peer by using the Fraser Report scores
for mining jurisdictions across the world and weighting such scores
based on each entity's 2020 production in each of the applicable
jurisdictions.
The senior gold peers used for the purposes of these comparative
measures were Barrick Gold Corporation, Kinross Gold Corporation,
Newcrest Mining Limited and Newmont Corporation.
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SOURCE Agnico Eagle Mines Limited