PERTH (miningweekly.com) – An independent proxy advisory firm has confirmed that the proposed merger between gold miner Kirkland Lake Gold and TSX- and NYSE-listed Agnico Eagle Mines, should be supported by shareholders.

The two companies in September struck a C$13.4-billion ‘merger of equals’, under which Kirkland Lake shareholders would receive 0.7935 of an Agnico Eagle common share for each share held.

The transaction, which would establish the new Agnico Eagle, implies a combined market capitalisation of about $24-billion. Upon closing, existing Agnico Eagle and Kirkland Lake Gold shareholders would own about 54% and 46% of the combined company, respectively.

Upon closing of the merger, the company would have $2.3-billion of available liquidity, a mineral reserve base of 48-million ounces of gold and an extensive pipeline of development and exploration projects.

Kirkland Lake on Friday said that advisory firm Institutional Shareholder Services (ISS) had recommended that the company’s shareholders vote in favour of the merger, stating that there was "sound strategic rationale" for combining the two companies and the all-stock consideration provided an opportunity for shareholders to participate in the potential upside represented by a more diversified set of operating assets and exploration portfolio.

“We are pleased that ISS, a leading proxy adviser, has endorsed this deal and encouraged all shareholders to vote for the arrangement with Agnico Eagle,” said Kirkland Lake president and CEO Tony Makuch.

“The merger represents a truly unique opportunity to create a new leader in the gold mining industry, with the lowest unit costs, best risk profile, substantial financial strength, an extensive project pipeline to drive future growth and leadership in key areas of environmental and social governnance.

“The combined company, to continue under the Agnico Eagle name, will have a dominant position in one of the world’s great gold regions, the Abitibi region of northern Ontario and northwestern Quebec, which will provide significant value creation opportunities. The new Agnico Eagle will be a company deserving of a premium valuation, given its many competitive advantages, and will be ideally positioned to generate superior long-term returns for shareholders going forward. The endorsement of ISS is a positive step forward and we encourage all shareholders to vote their shares well in advance of the deadline on November 24.”