Canadian miner Agnico Eagle Mines will buy out fellow bullion producer Kirkland Lake Gold in an all-stock deal, which consolidates assets in the Abitibi greenstone belt of north-eastern Ontario and north-western Quebec.

In the C$13.4-billion “merger of equals”, announced on Tuesday, Kirkland Lake shareholders would receive 0.7935 of an Agnico Eagle common share for each share held. News agency Reuters calculates that the deal values Kirkland shares at C$50.63 a share.

Kirkland’s stock closed at C$53.89 a share on Monday, as rumours of a potential deal emerged on Sunday.

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.

The new Agnico Eagle would be a high-quality senior producer and the companies said it would have the lowest unit costs, highest margins, most favourable risk profile and industry-leading best practices in key areas of environmental, social and governance (ESG).

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.

Besides the assets in the Abitibi, the new Agnico Eagle is established as the only gold producer in Nunavut and well positioned internationally with profitable and prospective assets in Australia, Finland and Mexico.

The new Agnico Eagle would be led by a combined board and management team, with Agnico Eagle’s current CEO, Sean Boyd, becoming executive board chairperson and Kirkland Lake CEO Tony Makuch taking up the CEO role for the combined company.

Ammar Al-Joundi would be president, Jeffrey Parr vice chairperson and Jamie Sokalsky lead director.

“This merger starts a new chapter in Agnico Eagle’s 64-year history and creates the leading low risk global gold company with growing production, low costs and strong ESG leadership.

“Kirkland Lake is an excellent cultural fit with Agnico Eagle, and we look forward to working together to further grow our business through exploration, mine development and optimization of our high-quality asset base,” commented Boyd in a statement.

Makuch said that the deal would create an industry leader with a dominant position in the Canadian market that deserved a premium valuation.

“The transaction represents a true merger of equals, with the business of both companies to benefit from the significant financial strength of the merged company, the extensive pipeline of development and exploration projects to drive future growth, and the potential to realize significant operational and strategic synergies along the Abitibi-Kirkland Lake corridor. It is the right deal for our company and its shareholders, our people, the communities where we operate, and all of our key stakeholder groups.”