Kirkland Lake Gold CEO on Agnico Eagle Mines merger, electrification

As a part of session moderated by Henry Lazenby, multimedia content material producer with CMJ’s sister publication, The Northern Miner, Makuch fielded questions from the viewers, together with these about why Agnico Eagle didn’t supply a sizeable premium on the Kirkland Lake share value.

“Kirkland Lake Gold has a observe file of rising itself as an organization,” he mentioned. “In making a premium deal, it’s a must to see new worth that may be created. If we insisted on a premium, it’s the identical as me saying to shareholders we haven’t created the worth we may have for you.”

The mega-merger was introduced on Sept. 28 – a deal that can create a top quality, senior producer with 48 million oz. of gold in reserves. The boards of each firms have authorized the association, and present Agnico CEO Sean Boyd will grow to be chair of the board.

The deal carries $2 billion price of financial savings via synergy. However the place will they arrive from?

In keeping with Makuch, financial savings could be discovered by sharing exploration data, expertise, processing alternatives, infrastructure, and the help of native communities and regulators each Agnico Eagle and Kirkland Lake have.

If Kirkland Lake embarks on a challenge that may take it three or 4 years, reminiscent of creating a wise mine, Makuch mentioned they’d look to an Agnico mine the place it has already been accomplished, and the implementation timeline can be shortened.

“Unlocking expertise will play a giant half in lowering prices,” Makuch mentioned. “We depend on exploration expertise to drive worth in our trade. . . If we will discover an oz. of gold for $5 or $10, then improve the sources for $150 an oz., you’ve gotten created worth.”

Likewise, expertise and R&D will play a giant half in unlocking synergy.

The merger is price an estimated C$13.5 billion as Kirkland Lake shareholders will obtain 0.7935 of an Agnico Eagle frequent share for every of their shares.

Kirkland Lake’s strengths are the Macassa and Detour Lake gold mines in Ontario and the Fosterville gold mine in Victoria, Australia. Agnico Eagle has constructed its energy on the Meadowbank, Canadian Malartic, Goldex, Hope Bay, LaRonde, and Meadowbank gold mines in Canada. The corporate additionally has gold mines in Mexico (Pinos Altos and La India), and Finland (Kittila). Each firms have pipeline tasks that create a synergy for the long run.

Aggressive exploration to proceed

“The brand new Agnico Eagle is at all times going to be an aggressive explorer, and we’ve got the capital sources to try this,” he added.

Makuch additionally sees benefits to electrifying underground past financial savings on air flow, based mostly on expertise implementing battery electrical tools at Kirkland Lake’s operations in Ontario.

“Such vehicles are already fitted with computer systems. (That’s) how we will create a wise or autonomous piece of kit. Then you possibly can join all of them and create a wise mine,” he mentioned.

The merged Agnico-Kirkland Lake will keep the purpose of net-zero carbon emissions by 2050 or earlier than.

“We will get to web zero if we shut all our mines,” Makuch mentioned, “however we need to function our mines.” Which means enhancing processes, going electrical, adopting good applied sciences, and at all times search sustainability.

“The large problem is folks. Improvements and alter want educated folks and other people with new abilities,” he mentioned. He needs the brand new firm to get away from underground diesel engines and the publicity of individuals to diesel exhaust fumes.

He mentioned that to create a sustainable enterprise, half is expertise, and half is how folks and the setting are handled, how processes are improved, how enterprise help could be extra environment friendly – on the similar time preserve prices on the low finish of the trade.

“Over the subsequent few years, there are going to be thrilling occasions,” Makuch promised.

A load of concepts for the long run

Moreover keynote speaker Tony Makuch, the morning keynote at CMJ Reimagine Mining Symposium was given by George Hemingway, managing companion and head of innovation observe at Stratalis. He spoke on easy methods to harness developments to get mining’s message to the general public.

There have been future-focused panels on the pathway to decarbonization in mining; easy methods to get the general public to view mining positively sponsored by SRK; as properly one on capturing information past line of website sponsored by Emesent. Additionally seeking to the long run, speaker Brad Terhune of Costmine supplied pointers for estimating challenge prices, and Don Duval of Norcat outlined how mining firms are rushing up their adoption of expertise.

CMJ thanks all its sponsors together with Sandvik (world), Eaton (silver), Eaton (silver), BBA (bronze) and KalTire (bronze) and company presenter Exyn Applied sciences.

(This text first appeared within the Canadian Mining Journal)

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