Agnico Eagle, Kirkland Lake Gold Complete Merger

Agnico Eagle (TSE: AEM) (NYSE: AEM) and Kirkland Lake Gold (TSE: KL) (NYSE: KL) announced Wednesday they have successfully completed their previously announced merger, creating a Canadian gold giant.

Toronto-based Agnico has mines in Canada, Finland and Mexico, along with exploration and development activities in these countries and in the U.S. and Colombia. Kirkland Lake Gold owns the Macassa mine and the Detour Lake mine, both in Canada, and the Fosterville mine in Australia. 

Combined Company to Be Led by Sean Boyd

The combined company will continue as Agnico Eagle Mines Limited. The stock will continue to trade on the Toronto Stock Exchange (TSX) and the New York Stock Exchange (NYSE) under the symbol AEM.

In total, Agnico Eagle issued approximately 209,274,263 common shares to former Kirkland Lake Gold shareholders in consideration for their shares. As of Wednesday, the new Agnico Eagle had a market capitalization of approximately $22.4 billion.

The combined company will be led by Sean Boyd as executive chairman, Anthony Makuch as CEO and Ammar Al-Joundi as chairman.

Wall Street’s Take

On February 3, Barclays analyst Matthew Murphy upgraded AEM to Buy from Hold with a price target of $69 (C$87.65). This implies 38.4% upside potential.

Murphy stated that weakening economic growth and cost inflation will present challenges for the mining sector in 2022.

The analyst remains neutral on the sector as a whole, but recommends “tactical rotation” from late-cycle copper miners into gold names, which he believes now represent an “attractive hedge against risks of central bank error.”

The rest of the Street is bullish about AEM with a Strong Buy consensus rating based on eight Buys and two Holds. The average Agnico Eagle price target of C$90.47 implies an upside potential of about 42.8% to current levels.  

TipRanks’ Smart Score

Agnico Eagle scores a 6 out of 10 on TipRanks’ Smart Score rating system, indicating that its stock has a good chance of performing in line with the overall market.

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