Benefits of the Detour Gold Acquisition

For Kirkland Lake Gold and shareholders, the Detour Gold acquisition:

  • Adds a long-life, high quality asset in a low-risk jurisdiction. The Detour Lake mine is a uniquely large-scale, long-life Canadian mine, with current production of approximately 600,000 ounces of gold per year and substantial growth potential.
  • Solidifies our position as a senior gold producer with industry-leading free cash flow. The acquisition is expected to provide Kirkland Lake Gold with enhanced scale with pro forma 2019 production targeted at approximately 1.5 million ounces of gold and analyst consensus 2019 free cash flow of almost US$700 million.
  • Bolsters our financial strength and capital markets profile. The combined net cash balance of Kirkland Lake Gold and Detour Gold at September 30, 2019 was US$630 million. The increased public float, liquidity, and access to capital, is expected to provide Kirkland Lake Gold with greater capacity to pursue further growth, make strategic investments to improve mining throughput and efficiency, and return capital to shareholders.
  • Increases Kirkland Lake Gold’s Mineral Reserve base and complements our existing operating profile. The acquisition is expected to add approximately 15.4 million ounces of gold to Kirkland Lake Gold’s Mineral Reserve base and extend our Mineral Reserve life index by eight years.
  • Enables value-creation through continued optimization and potential expansion of the Detour Lake mine. The financial strength and technical expertise of Kirkland Lake Gold is expected to support the continued optimization and potential expansion of the Detour Lake mine with opportunities to significantly increase production at improved unit costs and to expand current Mineral Reserves and Mineral Resources.
  • Provides attractive exploration upside. Detour Gold’s land position covers approximately 1,040 km2 along the northernmost sections of the Abitibi Greenstone Belt (including approximately 646 km2 on the existing Detour Lake property) in Ontario, Canada. The combination of free cash flow generating operations, significant in-mine growth potential and considerable regional exploration upside is a common feature among the Detour Lake mine and the Macassa mine in Canada and the Fosterville mine in Australia.
  • Delivers significant potential synergies. The acquisition is expected to generate approximately US$75-US$100 million in annual pre-tax synergies.
  • Creates immediate value. The acquisition is expected to deliver cash flow per share and net asset value per share accretion to Kirkland Lake Gold.

See “Reasons for the Recommendation of the Kirkland Board” in the Circular for more information