UPDATE 1-Kirkland Lake to acquire Newmarket Gold in growth push
(Adds details on transaction and operations, comments from executives on conference call, stock prices)
By Susan Taylor
TORONTO, Sept 29 (Reuters) - Canada's Kirkland Lake Gold will acquire Australian miner Newmarket Gold for about C$1 billion ($764 million) in stock, creating a mid-tier producer poised to grow, the companies said on Thursday.
The transaction is somewhat of an outlier, as gold mining executives say the rising price of bullion has made acquisitions costlier for a sector focused on financial discipline.
The combination makes "something we can build from," Kirkland Lake Chief Executive Officer Tony Makuch said on a conference call. Kirkland Lake will hold 57 percent of the new company, which will have the same name, and Newmarket shareholders will get 43 percent.
Shares of Kirkland Lake fell 6.5 percent to C$10.39 on the Toronto Stock Exchange after the deal was announced, while Newmarket gained 0.8 percent to C$4.87.
The transaction comes just 10 months after Kirkland Lake acquired fellow Canadian gold miner St Andrew Goldfields for about C$178 million in stock, creating an Ontario-focused producer with four mines and two mills.
The new Kirkland Lake will operate seven underground mines and five mills, producing more than 500,000 ounces of gold in 2016.
Output will be anchored by Kirkland Lake's Macassa and Taylor mines in Ontario and Newmarket's Fosterville mine in Victoria, Australia. Exploration around existing sites is expected to drive production growth, said Makuch. Continued...