Agnico Eagle Mines and rival Canadian gold mining company Kirkland Lake Gold have signed an all-stock merger of equals deal worth around $11bn.

The combined company will operate as Agnico Eagle Mines, a senior producer with operations mainly in the Abitibi-Greenstone Belt of northeastern Ontario and northwestern Quebec. The 2021 production of the combined company is expected to be around 3.4 million ounces.

Apart from Ontario and Quebec, the combined firm will have operations in Nunavut, Canada, Fosterville in Victoria, Australia, Kittila in the Lapland region of Finland, and Pinos Altos and La India in Mexico.

Currently, Agnico Eagle Mines has operating mines in Canada, Mexico, and Finland. It also has exploration and development activities in the three countries along with the US and Colombia.

Kirkland Lake Gold, on the other hand, operates the Macassa and Detour Lake mines in Ontario and the Fosterville mine in Victoria.

The Canadian senior gold producer is targeting a production of 1.3–1.4 million ounces in 2021.

Agnico Eagle Mines CEO Sean Boyd said: “The transaction creates a company with a strong platform of people, assets and financial resources to continue to build and operate a long term sustainable and self funding business.

“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 optimisation of our high-quality asset base.

“Over time, we believe that the gold industry will continue to evolve and consolidate and with this transaction we are well positioned take advantage of high-quality opportunities and be a true Canadian mining champion.”

As per the terms of the merger, Kirkland Lake Gold’s shareholders will be issued 0.7935 of an Agnico Eagle Mines common share for each common share held in Kirkland Lake Gold.

In the combined company, Agnico Eagle Mines’ existing shareholders will have a stake of around 54%, while the remaining 46% stake will be held by Kirkland Lake Gold’s shareholders.

Kirkland Lake Gold president and CEO Tony Makuch said: “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 realise 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.”

The merger deal, which is subject to approvals by shareholders of both the firms, regulatory approvals, and other closing conditions, is expected to close in December 2021 or in Q1 2022.

Earlier this month, Agnico Eagle Mines announced a C$6m ($4.73m) investment in Candelaria Mining, a Canadian gold development and exploration company. Candelaria Mining is focused on advancing two gold projects in Mexico.