By Susan Taylor
TORONTO (Reuters) – Mid-tier Canadian miner Kirkland Lake Gold said on Friday its shareholders voted heavily in favor of its takeover of Newmarket Gold, confirming a Reuters story on Thursday.
The deal was backed by 82.6 percent of votes cast by shareholders of Toronto-based Kirkland Lake and over 99 percent of votes cast by shareholders of Vancouver-based Newmarket Gold, the companies said in a statement.
To succeed, the deal needed support from at least two-thirds of Kirkland Lake shares and more than half of Newmarket’s shares. The all-stock transaction, valued at some C$1 billion ($739.75 million) when announced Sept. 29, is expected to close Nov. 30.
Sources had told Reuters on Thursday that over 80 percent of Kirkland Lake shares and 90 percent of Newmarket shares were voted in favor of the deal.
Van Eck Associates, Kirkland Lake’s biggest shareholder with nearly 17 percent of its shares, reaffirmed its support of the deal to Reuters earlier this week, but declined to specify how it voted.
Some investors and analysts criticized the combination of companies because they saw no apparent efficiency or growth opportunities with Kirkland Lake’s assets in Canada and Newmarket’s in Australia.
Some shareholders worried that Kirkland Lake too hastily rejected three joint offers by Gold Fields and Silver Standard Resources to acquire Kirkland Lake. The two withdrew their offer on Nov. 18.
Executives at Kirkland Lake and Newmarket have said that their merger will create a larger company that drives increased analyst coverage and valuation.
The combined company will operate seven underground mines and five mills, which produced more than 500,000 ounces of gold in 2016. Output is anchored by Kirkland Lake’s Macassa mine in Ontario and Newmarket’s Fosterville mine in Victoria, Australia.
The acquisition follows Kirkland Lake’s purchase of St Andrew Goldfields earlier this year. That stock transaction, valued at about C$178 million, created a company with four mines and two mills in Ontario.
Shares of Kirkland Lake fell 1.6 percent to C$7.18 on the Toronto Stock Exchange and Newmarket stock dipped 0.3 percent to C$3.42 after the results were announced on Friday.
(With additional reporting by John Tilak in Toronto and Nicole Mordant in Vancouver; Editing by Marguerita Choy)