Kirkland Lake Buys Detour
Kirkland Lake buys Detour.
Kirkland Lake Gold buys Detour Gold for C$4.9 billion.
Detour Lake is a large-scale, long-life Canadian mine located within the northernmost Abitibi Greenstone Belt. The operation is situated in the area of the famous Detour Lake mine operated by Placer Dome which produced 1.8 million ounces of gold from 1983 to 1999. This deal adds a key component to Kirkland Lake’s portfolio anchored by the Macassa mine in northern Ontario and the Fosterville mine in Australia.
Tony Makuch of Kirkland Lake said: ‘The acquisition of Detour Gold is an excellent fit for Kirkland Lake. We have already taken two mining operations, Macassa and Fosterville, and transformed them into high-quality assets that generate industry-leading earnings and free cash flow. The addition of Detour Lake provides an opportunity to add a third cornerstone asset that is located in our back yard in Northern Ontario. Detour Lake will provide the pro forma company with a 20-plus year mine life which provides unparalleled optionality and growth potential for the benefit of all shareholders. The management team at Detour Gold has done an exceptional job of making improvements and building momentum at the mine. Once the transaction is completed, we will continue efforts to optimize current operations and begin engineering work to test expansion opportunities at Detour Lake, which we expect could lead to significant production growth, improved unit costs, and higher levels of mineral reserves and mineral resources.
Turning to exploration, we are planning extensive drilling at highly prospective exploration targets within the 1,040 km2 Detour Gold land position, where we believe there's considerable potential for new discoveries to support future mineral resource growth. The work we are planning around Detour Lake will be a key component of our corporate exploration program going forward. Other anticipated components of this program include ongoing drilling at Macassa to grow the South Mine Complex and identifying high-grade gold zones along the Amalgamated Break, as well as continued extensive exploration at Fosterville and Northern Territory.’
Mick McMullen of Detour Gold said: ‘This transaction recognizes the improvements we have made to re-engineer Detour Gold’s operations and business practices while providing our shareholders with an immediate premium and a unique opportunity to gain exposure to a diversified portfolio of low-cost, high-grade mines in prolific and low-risk mining jurisdictions. Our significant mineral resource base, exploration potential, and long-life production profile are a great addition to the Kirkland Lake Gold portfolio, and we are excited that we can share in the growth opportunities that exist going forward. Importantly, Kirkland Lake Gold’s strong balance sheet and cash-generating capabilities will support more investment in the exploration of Detour Lake to help unlock further growth potential.’
RBC Capital Markets served as financial advisor to Kirkland Lake. Cassels Brock & Blackwell and Dorsey & Whitney served as legal advisors.
BMO Capital Markets and Citigroup served as financial advisors to Detour Gold. Stikeman Elliott, Jones Day, and Squire Patton Boggs served as legal advisors.
Kirkland Lake Gold buys Detour Gold for C$4.9 billion.
Detour Lake is a large-scale, long-life Canadian mine located within the northernmost Abitibi Greenstone Belt. The operation is situated in the area of the famous Detour Lake mine operated by Placer Dome which produced 1.8 million ounces of gold from 1983 to 1999. This deal adds a key component to Kirkland Lake’s portfolio anchored by the Macassa mine in northern Ontario and the Fosterville mine in Australia.
Tony Makuch of Kirkland Lake said: ‘The acquisition of Detour Gold is an excellent fit for Kirkland Lake. We have already taken two mining operations, Macassa and Fosterville, and transformed them into high-quality assets that generate industry-leading earnings and free cash flow. The addition of Detour Lake provides an opportunity to add a third cornerstone asset that is located in our back yard in Northern Ontario. Detour Lake will provide the pro forma company with a 20-plus year mine life which provides unparalleled optionality and growth potential for the benefit of all shareholders. The management team at Detour Gold has done an exceptional job of making improvements and building momentum at the mine. Once the transaction is completed, we will continue efforts to optimize current operations and begin engineering work to test expansion opportunities at Detour Lake, which we expect could lead to significant production growth, improved unit costs, and higher levels of mineral reserves and mineral resources.
Turning to exploration, we are planning extensive drilling at highly prospective exploration targets within the 1,040 km2 Detour Gold land position, where we believe there's considerable potential for new discoveries to support future mineral resource growth. The work we are planning around Detour Lake will be a key component of our corporate exploration program going forward. Other anticipated components of this program include ongoing drilling at Macassa to grow the South Mine Complex and identifying high-grade gold zones along the Amalgamated Break, as well as continued extensive exploration at Fosterville and Northern Territory.’
Mick McMullen of Detour Gold said: ‘This transaction recognizes the improvements we have made to re-engineer Detour Gold’s operations and business practices while providing our shareholders with an immediate premium and a unique opportunity to gain exposure to a diversified portfolio of low-cost, high-grade mines in prolific and low-risk mining jurisdictions. Our significant mineral resource base, exploration potential, and long-life production profile are a great addition to the Kirkland Lake Gold portfolio, and we are excited that we can share in the growth opportunities that exist going forward. Importantly, Kirkland Lake Gold’s strong balance sheet and cash-generating capabilities will support more investment in the exploration of Detour Lake to help unlock further growth potential.’
RBC Capital Markets served as financial advisor to Kirkland Lake. Cassels Brock & Blackwell and Dorsey & Whitney served as legal advisors.
BMO Capital Markets and Citigroup served as financial advisors to Detour Gold. Stikeman Elliott, Jones Day, and Squire Patton Boggs served as legal advisors.
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