Kirkland in strategic alliance with world's top gold miner
Canadian gold miner Kirkland Lake on Monday announced that it had entered into a strategic alliance agreement with the world’s top gold miner, Newmont, to explore and develop opportunities around its Holt Complex, in Ontario.
Operations at the Holt Complex were suspended in April as part of Covid-19 protocols and remained idled, while Kirkland continued with a strategic review of the assets.
Newmont would pay Kirkland $75-million to acquire an option on certain mining and mineral rights related to the Holt mine, which Barrick built in the late 1980s.
The option does not involve the other Holt complex assets, including the Holloway and Taylor mines.
The strategic alliance would provide Kirkland with capital to evaluate strategic alternatives for the future of the mining complex, explore on its existing properties and evaluate other regional opportunities where the two groups could cooperate in the future. Newmont has exploration properties in Timmins.
Kirkland will act as manager of strategic alliance activities.
Newmont explained in a separate statement that it could exercise the option only if Kirkland restarted operations at the Holt mine and processed material subject to the Holt royalty.
Kirkland has the right to assume Newmont’s obligations under the Holt royalty at any time, in which case the option would terminate.
Newmont said that it would have no additional liability exposure in relation to the Holt royalty and that it would remove a $350-million liability for the royalty on its balance sheet, while recording a gain of about $275-million in net income from discontinued operations in its third-quarter results.
Kirkland’s stock closed 6.25% higher at C$70.26 a share. Newmont traded 7% higher at $48.35 a share in New York.
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