Kirkland Lake's largest shareholder says supports Newmarket deal

Wed Nov 23, 2016 2:01pm EST
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By Susan Taylor

TORONTO (Reuters) - Kirkland Lake Gold Inc's KLG.TO largest shareholder, Van Eck Associates, on Wednesday reaffirmed its support for the Canadian miner's proposed takeover of Newmarket Gold Inc NMI.TO as a deadline passed for shareholder proxy votes to be cast.

Toronto-based Kirkland Lake has offered to buy Newmarket, which operates mines and projects in Australia, in an all-stock transaction valued at about C$1 billion ($742 million).

"We're supportive of the merger," Van Eck fund manager Joseph Foster told Reuters, while declining to specify how the fund voted. "It's just creating a very attractive gold vehicle for us."

Van Eck Associates owned 19.83 million shares in Kirkland Lake, a 16.88 percent stake, as of Sept. 30, according to the latest Thomson Reuters data. It also held 23.07 million shares in Newmarket, or a 12.96 percent stake, as of Oct. 26, the data showed.

Kirkland Lake and Newmarket shareholders had a midmorning deadline on Wednesday to vote their proxies on the transaction, with results expected on Friday morning.

Some shareholders and analysts have publicly stated the Newmarket takeover offers few cost-cutting or revenue-generating opportunities, given that the miners' assets are in different countries.

And some investors argued that Kirkland Lake too hastily rejected three joint offers by Gold Fields Ltd (GFIJ.J: Quote) and Silver Standard Resources (SSO.TO: Quote) to acquire Kirkland Lake.

Kirkland Lake confirmed on Nov. 11 a Reuters report that Gold Fields and Silver Standard had made three joint bids for the midsize gold miner and recently sweetened their offer to about C$1.4 billion. The bidders' names and deal value were not previously disclosed.   Continued...

A worker inspects a new hoist installed at Kirkland Lake Gold's operations in the town of Kirkland Lake, Ontario, Canada October 4, 2011.  REUTERS/Euan Rocha/File Photo