DBRS eyes Agnico Eagle Mines positively

DBRS said it placed the BBB issuer and senior unsecured notes ratings of Agnico Eagle Mines Ltd. under review with positive implications.

The review follows Agnico’s Wednesday announcement of a planned merger with Kirkland Lake Gold Ltd. in an all-equity transaction.

DBRS noted that at June 30, Kirkland Lake had about $25 million in operating and financial lease obligations with no long-term debt, and in the last 12 months ended June 30, 2021, generated cash flow from operations (before noncash working capital items) and EBITDA of about $1.428 billion and $1.779 billion, respectively.

“Because of Kirkland Lake’s low levels of debt, accretive cash flow and EBITDA, plus the material increase in size of the combined entity, DBRS Morningstar views the proposed transaction as credit positive for Agnico,” the agency said in a press release.

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