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Kirkland Lake Gold Ltd. T.KL

Kirkland Lake Gold Ltd is a Canada-based gold mining, development, and exploration company with a diversified portfolio of exploration projects. The production profile of the company includes the Macassa mine complex located in northeastern Ontario and the Fosterville gold mine located in the State of Victoria, Australia. Also, the company owns the Holt mine and the Detour mine. The company's mines and material mineral projects are located in Canada and Australia.


TSX:KL - Post by User

Comment by Goldbug52on Sep 30, 2021 5:21pm
222 Views
Post# 33947643

RE:Why I like the deal (what?)

RE:Why I like the deal (what?)
mercedesman wrote: First off, I am a KL shareholder.   Don't currently own any AEM.


I truly get why everyone is upset.  At first I was as well.  When you are the smaller co in a "merger" you always expect to receive a premium.  My instant reaction was one of anger.  However I have changed my mind somewhat after thinking about it further.  At the risk of being attacked, the reasons that I like the merger (even as a KL shareholder) are as follows:

1. The combined entities will benefit from millions in synergy savings.  Not possilbe as separate entities. The market will soon start to factor in the potential cost savings. Meaning the two names should appreciate faster ralative to other gold equities, or what they would have done without the merger.

2. Bigger is better.  Leads to Lower AISC's.  The multiples improve. Cost of Capital lowered.  Able to do future acquisitons less expensively (share price as currency).

3. In the past few years, the market has recently demonstrated that zero premium Gold Company takeovers result in increases to the combined MCs.  It is likely why you will see fewer and fewer premium-type mergers (unless it's a very big co., taking over a very small Co.)

e.g NEM and GC  (GC was languishing pre-combo)
Equinox and Leagold.(Leagold was doing well but soared much further and faster under Equinox) As a Leagold shareholder I was at first very upset, but saw a nice increase in the months following the merger.   This depends on the PoG co-operating, (or just staing the same) as always.

4. KLs decline in the past year ($ 54 to $ 41) was modest in relation to AEM's decline over the same period (from $ 84 to $ 51).  Most gold investors know that gold miners are undervalued.  I woudl argue that KL was at least a bit more fairly valued (relative valuations flucuate all the time)  To me that means AEM has more room to appreciate to get back to FMV  (meaning that KL shareholders pick up relatively more value by being linked to an even more undervalued Co)



Once Gold clears $ 1800 - $ 1900 I would not be surprised to see AEM leap back up over $ 75/share USD bringing KL shareholders along with it.  Perhaps/likely much higher than would have been possible on it's own.

OK  Target placed.  Fire away !

MM


You sound like an Agnico shill! However respectfully you're entitled to your opinion :-))!

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