TORONTO – Kirkland Lake Gold Inc. (TSX:KGI) plans to acquire St Andrew Goldfields Ltd. (TSX:SAS) in an all-stock deal that will create an Ontario-focused, intermediate gold producer.
The companies said in a joint announcement after markets closed that St Andrew shareholders will receive 0.0906 of a common share of Kirkland Lake for each St Andrew common share, or the equivalent of 47 cents per share based on Monday’s closing price for Kirkland stock.
The exchange ratio was also a 46 per cent premium based on both companies’ 20-day, volume-weighted average prices and a 25 per cent premium to St Andrew’s closing price on Monday, they said.
It also implies a total equity value of approximately $178 million on a fully diluted in-the-money basis.
St. Andrew shares closed up two cents at 38 cents on Monday, while Kirkland Lake stock was down two cents at $5.23.
Upon completion of the proposed transaction, subject to shareholder and other approvals, existing Kirkland Lake and St Andrew shareholders would own about 71 per cent and 29 per cent of the combined company, respectively.
Kirkland Lake Gold Inc. is a gold producer with assets in Kirkland Lake and current gold production in excess of 150,000 ounces a year.
St Andrew Goldfields Ltd. is a mining and exploration company with an extensive land package in the Timmins mining district of northeastern Ontario. It is expected to produce about 105,000 ounces of gold this year.