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Kirkland Lake Gold Ltd
Symbol KL
Shares Issued 210,189,007
Close 2019-12-23 C$ 55.05
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Kirkland files info circular for Jan. 28 holder meeting

2019-12-23 09:12 ET - News Release

Mr. Anthony Makuch reports

KIRKLAND LAKE GOLD ANNOUNCES MAILING OF MANAGEMENT INFORMATION CIRCULAR IN CONNECTION WITH SPECIAL MEETING TO CONSIDER ACQUISITION OF DETOUR GOLD

Kirkland Lake Gold Ltd. has filed its management information circular and related meeting materials in connection with a special meeting of shareholders to be held on Jan. 28, 2020. The purpose of the meeting is to seek approval in connection with Kirkland Lake Gold's previously announced proposed acquisition of all of the issued and outstanding common shares of Detour Gold Corp. by way of a plan of arrangement under Section 192 of the Canada Business Corporations Act.

Shareholders of Kirkland Lake Gold should receive these meeting materials by mail shortly. The meeting materials, together with an investor presentation and other information, are also available at Kirkland Lake Gold's website, on SEDAR and on EDGAR.

Kirkland Lake Gold encourages shareholders to read the meeting materials in detail. To ensure that your Kirkland Lake Gold shares will be represented at the meeting, shareholders should carefully follow the voting instructions provided in the meeting materials. The deadline for the receipt of proxies is 11 a.m. ET on Jan. 24, 2020.

The arrangement agreement

Kirkland Lake Gold and Detour Gold entered into an arrangement agreement, pursuant to which Kirkland Lake Gold will acquire all of the issued and outstanding common shares of Detour Gold on the basis of 0.4343 of a Kirkland Lake Gold common share for each Detour Gold common share held. Upon completion of the arrangement, existing Kirkland Lake Gold and Detour Gold shareholders will own approximately 73 per cent and 27 per cent of the outstanding shares of the pro forma company, respectively.

Board recommendation

After consultation with the Kirkland Lake Gold management team and its financial and legal advisers, and following careful consideration, the board of directors of the company unanimously recommends that Kirkland Lake Gold shareholders vote for the proposed resolution.

Reasons for and benefits of the arrangement

In evaluating the arrangement and unanimously determining it to be in the best interests of Kirkland Lake Gold, as well as recommending that Kirkland Lake Gold shareholders support the arrangement, the board of directors of Kirkland Lake Gold reviewed a significant amount of technical, financial and operational information relating to Detour Gold and the anticipated benefits and advantages resulting from the arrangement, including, among others:

  • Adds a long-life, high-quality asset in a low-risk jurisdiction. The Detour Lake mine is a unique, large-scale, long-life, Canadian mine, with current production of approximately 600,000 ounces of gold per year and substantial growth potential.
  • Solidifies the company's position as a senior gold producer with industry-leading free cash flow. The arrangement is expected to provide Kirkland Lake Gold with enhanced scale, with pro forma 2019 production targeted at approximately 1.5 million ounces of gold and analyst consensus 2019 free cash flow of almost $700-million (U.S.).
  • Bolsters the company's financial strength and capital markets profile. The combined net cash balance of Kirkland Lake Gold and Detour Gold at Sept. 30, 2019, was $630-million (U.S.). The increased public float, liquidity and access to capital are expected to provide Kirkland Lake Gold with greater capacity to pursue further growth, make strategic investments to improve mining throughput and efficiency, and return capital to shareholders.
  • Increases Kirkland Lake Gold's mineral reserve base and complements its existing operating profile. The arrangement is expected to add to Kirkland Lake Gold's mineral reserve base and extend the company's mineral reserve life index by eight years.
  • Enables value creation through continued optimization and potential expansion of the Detour Lake mine. The financial strength and technical expertise of Kirkland Lake Gold are expected to support the continued optimization and potential expansion of the Detour Lake mine with opportunities to significantly increase production at improved unit costs and to expand current mineral reserves and mineral resources.
  • Provides attractive exploration upside. Detour Gold's land position covers approximately 1,040 square kilometres along the northernmost sections of the Abitibi greenstone belt (including approximately 646 square kilometres on the existing Detour Lake property) in Ontario, Canada. The combination of free-cash-flow-generating operations, significant in-mine growth potential and considerable regional exploration upside is a common feature among the Detour Lake mine and the Macassa mine in Canada and the Fosterville mine in Australia.
  • Delivers significant potential synergies. The arrangement is expected to generate approximately $75-million (U.S.) to $100-million (U.S.) in annual pretax synergies.
  • Creates immediate value. The arrangement is expected to deliver cash-flow-per-share and net-asset-value-per-share accretion to Kirkland Lake Gold.

Kirkland Lake Gold meeting

The meeting is scheduled for 11 a.m. ET on Jan. 28, 2020, at TSX Exchange Tower, 130 King St. West, Toronto, Ont., Canada, M5X 1C9. At the meeting, Kirkland Lake Gold shareholders will be asked to consider and vote on an ordinary resolution authorizing the issuance by the company of up to 77,407,217 Kirkland Lake Gold common shares pursuant to the arrangement.

Additional details

The company's management information circular outlines the benefits for Kirkland Lake Gold shareholders, as well as the risks related thereto, and provides details about the arrangement, including details on how shareholders can vote their Kirkland Lake Gold shares. For a more detailed description of the arrangement, readers should review the company's management information circular and visit the company's website.

Shareholder questions and assistance

If you have any questions or require assistance voting your shares, please contact Kingsdale Advisors, the company's strategic shareholder adviser and proxy solicitation agent, by telephone at 1-877-659-1821 toll-free in North America (1-416-867-2272 for collect calls outside of North America) or by e-mail at contactus@kingsdaleadvisors.com, or your professional adviser.

About Kirkland Lake Gold Ltd.

Kirkland Lake Gold is a growing gold producer operating in Canada and Australia that produced 723,701 ounces in 2018 and is on track to achieve significant production growth in 2019. Kirkland Lake Gold's solid base of quality assets is complemented by district-scale exploration potential, supported by a strong financial position with extensive management expertise.

We seek Safe Harbor.

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