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KL Gold, St Andrew merger gets shareholder approval

Shareholders have approved a merger between Kirkland Lake Gold and St Andrew Goldfields . On Jan.
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St Andrew Goldfields’ Holt Mine and Mill

Shareholders have approved a merger between Kirkland Lake Gold and St Andrew Goldfields.

On Jan. 19, KL Gold shareholders voted in favour of the $178-million deal, which would give existing Kirkland Lake and St Andrew shareholders owning approximately 71 per cent and 29 per cent of the combined company, respectively.

"We are pleased with the overwhelming shareholder support received with respect to this transaction to create a multi-asset, Ontario-focused intermediate gold producer,” KL Gold CEO George Ogilvie said in a release.

“The acquisition of St Andrew will result in a combined entity with four mines and two mills in Ontario's southern Abitibi greenstone belt which will benefit from increased financial flexibility through its aggregated positive cash position and anticipated free cash flows.

“Our two businesses will be able to take advantage of asset diversification in a stable and safe jurisdiction, with economies of scale and best practices that will help create a better Kirkland Lake Gold. We believe that we are stronger together."

Kirkland Lake Gold’s camp includes the Macassa complex, which produces more than 150,000 ounces annually, and plans over the next three years to surpass 180,000 ounces as exploration projects are entered into the production stream.

St. Andrew has gold mining operations in the Timmins mining district with its Holt-Holloway Mines, and the recent addition of the Taylor Mine. The company expects to produce 105,000 ounces this year with expectations to bump up to 140,000 ounces in 2016.

The arrangement is expected to close on Jan. 26, subject to applicable regulatory and court approvals.