Kirkland Lake Gold Ltd. will acquire Detour Gold Corp. in all share deal. Under the terms of the transaction, all Detour Gold shares will be exchanged at a ratio of 0.4343 of a Kirkland Lake Gold share for each Detour Gold share. Upon completion, existing Kirkland Lake Gold and Detour Gold shareholders will own approximately 73% and 27% of the company, respectively.

The exchange ratio implies consideration of C$27.50 per Detour Gold common share based on the closing price of the Kirkland Lake Gold common shares on the Toronto Stock Exchange on November 22, representing a 24% premium to the closing price for Detour Gold shares. The implied equity value of the transaction is C$4.9 billion.

The acquisition adds a large-scale, long-life Canadian mine with current production of about 600,000 ounces per year (oz/y) to Kirkland Lake’s portfolio, which solidifies the company position as a leading gold producer with pro forma 2019 production of more than 1 million oz/y. It also adds 15.4 million oz gold to Kirkland Lake’s mineral reserve base.

“The acquisition of Detour Gold is an excellent fit for Kirkland Lake Gold,” said Tony Makuch, president and CEO of Kirkland Lake Gold. “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 backyard in northern Ontario. Detour Lake will provide the pro forma company with a 20-plus year mine life which provides unparalleled optionality and excellent growth potential for the benefit of all shareholders.”

In addition to shareholder and court approvals, the transaction is subject to applicable regulatory approvals. Both shareholder meetings and closing of the transaction are expected by the end of January 2020.