On Friday, Gold Fields Ltd. (GFI, Financial) announced it has retracted the latest offer it made with Silver Standard Resources Inc. (SSRI, Financial) to buy Kirkland Lake Gold Inc. (TSX:KLG, Financial).
The last offer of 1.44 billion Canadian dollars ($1 billion) was rejected by Kirkland Lake Gold because its advisers determined it was “not financially superior to its own plan to acquire Newmarket Gold Inc.” This was the last of three joint bids from Gold Fields and Silver Standard Resources that Kirkland Lake Gold  has turned down.
Gold Fields says that it “remains interested in pursuing negotiations toward a board-supported transaction with Kirkland Lake in the event that Kirkland Lake's shareholders reject the Newmarket transaction.”
Kirkland’s shareholders will meet on Nov. 23 to vote on the acquisition of Newmarket Gold Inc. (TSX:NMI, Financial), an all-stock deal valued CA$1 billion.
If Kirkland Lake Gold’s shareholders approve the deal, the company will be merged with Newmarket Gold to form a new mid-tier gold company.
In a letter, Anthony Makuch, Kirkland Lake Gold’s president, CEO and director, assured shareholders they will benefit from a combined portfolio of high-quality assets composed of seven mines and five mills situated in Canada and Australia once the merger is completed. The combined business will be run in two countries that are characterized by a friendly mining jurisdiction where it can easily reach or exceed the target of 500,000 ounces of gold produced annually. The projected cash costs are below $600 per ounce of gold produced and an all-in sustaining cost (AISC) below $800 per ounce of gold produced.
Kirkland Lake Gold is a Canadian gold miner with assets in northeastern Ontario, one of the most prolific gold areas of Canada, where the miner aims to produce between 270,000 to 290,000 ounces of gold in 2016. Its assets in this area inculde the Macassa Mine Complex, the Holt Mine Complex, and the Holloway and Taylor mines.
On Friday, Kirkland Lake Gold Inc. closed at CA$7.78, down 0.18 (2.26%) from the previous trading day and has gained 60.74% year to date.
Gold Fields Ltd. closed at $3.24, down 0.04 (-1.22%) from the previous trading day with 6,749,703 shares traded on the New York Stock Exchange. The South African miner has gained 16.97% year to date.
Silver Standard Resources closed at $9.99, up 0.09 (0.91%) from the previous close. A volume of 1,694,000 shares were traded on the Nasdaq and the stock has gained 92.86% year to date.
Newmarket Gold Inc. closed at CA$3.48, down 0.03 (-0.85%) from the prior trading day with 1,789,443 shares traded on the Toronto Stock Exchange. The gold stock has gained nearly 157.78% year to date.
Disclosure: I have no positions in any stock mentioned in this article.
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