Value Microcaps Junior Miners

[checkmate28]

First Newmarket Swallows Crocodile Gold, Now Kirkland Lake swallowing Newmarket

Great value synergies and compliments, going to be fun to watch. LOL, people used to say that Tony Makuch didnt know what he was doing.


TORONTO, ONTARIO and VANCOUVER, BRITISH COLUMBIA--(Marketwired - Sept. 29, 2016) -Kirkland Lake Gold Inc. ("Kirkland Lake Gold") (TSX:KLG) and Newmarket Gold Inc. ("Newmarket") (TSX:NMI) are pleased to announce that they have entered into a definitive agreement (the "Arrangement Agreement") to merge the two companies, creating an exciting new mid-tier gold company (the "Transaction"). The combined company will have a market capitalization of approximately C$2.4 billion and produce over 500 koz of gold annually. Existing Kirkland Lake Gold and Newmarket shareholders will own approximately 57% and 43% of the combined company, respectively, on a fully-diluted in-the-money basis.

The combination of Macassa and Fosterville will form the production backbone of a new mid-tier, high quality gold producer with low cost production and superior free cash flow generation.

Kirkland Lake Gold operates its flagship Macassa Mine Complex in the historic Kirkland Lake gold camp, as well as the Holt, Holloway and Taylor gold mines (the "Holt Mine Complex") situated along the Porcupine-Destor Fault Zone, all located in northeastern Ontario. With the addition of Newmarket's Fosterville Gold Mine ("Fosterville") located in the state of Victoria, Australia and its other gold producing Cosmo and Stawell mines, the targeted gold production of the combined company will effectively be over 500 koz for the full year ended 2016. In addition, the combined company will have comprehensive technical capabilities to exploit its pipeline of development and exploration opportunities across a broad portfolio in both Tier-1 jurisdictions. This growth strategy will be supported by a strong balance sheet with a combined cash balance of over C$275 million along with superior free cash flow generation that amounted to C$92 million, on a combined basis, in the first half of 2016.

Highlights of the Transaction

Key investment highlights of the combined company include:

Creation of a new low-cost, mid-tier gold producer: Pro forma company will produce over 500 koz of gold in 2016 with cash costs of less than US$650/oz and all-in sustaining cash costs below US$1,015/oz.

Diversified production base: Combined company will operate seven mines and five mills in highly prospective gold camps with low geopolitical risk - Canada and Australia are two of the top mining jurisdictions in the world. Key in-country management structure, led by Darren Hall, will be kept in place to ensure seamless integration of the Australian operations.

Production profile anchored by three high-grade, low-cost operations: Production profile anchored by the Macassa, Fosterville and Taylor mines. Combined production in 2016 from these three assets alone will be over 330koz, with cash costs of under US$600/oz and AISC below US$800/oz.

Driving growth across two world class mining jurisdictions: This combination brings together a full complement of skill sets to position the combined company to take advantage of future profitable growth supported by the enhanced corporate financial strength. In addition, the combined company will have the ability to cross pollinate best practices to drive cost savings across the portfolio.


Expanded discovery and exploration potential: District-scale property positions in established gold camps in Canada and Australia with strong development and exploration pipeline to fuel future organic growth.


Strong balance sheet and healthy cash flow generation: Cash balance of over C$275 million and significant expected free cash flow generation in 2016 will provide industry leading financial strength and flexibility.

http://www.northernminer.com/press-releases/story/?id=1003866041