BNS TakeOUR TAKE: Positive. AEM and KL announced a merger of equals by way of a plan of arrangement for a combined company value of ~$24B. Shareholders of AEM would own ~54% and KL’s would own ~46% of the merged company, operating under the Agnico Eagle brand. KL shareholders will receive 0.7935 of an AEM share; a 1% premium to the 10-day VWAP (9% discount to yesterday’s close). This merger will create a Canadian gold mining powerhouse: producing ~3.4 Moz at AISC of ~$900/oz in 2021 (production guided to grow to 3.6 Moz by 2023) and generating run-rate EBITDA of ~$3B-$4B and FCF of ~$1B-2B per annum at spot prices. While the deal is slightly NAVPS dilutive for AEM at first glance, we believe this is more than offset by the upside potential at KL’s high-quality assets (e.g., recent 10 Moz resource increase at Detour not included in KL’s current NAV), ~$2B of pre-tax synergies, exploration upside at both asset bases (further optionality), low geopolitical risk and re-rating potential of the combined company. The new AEM would become another attractive alternative to GOLD and NEM for generalist investors. That said, there is risk to completing the deal as-is given the small premium offered and likely interest from other senior gold producers.