The planned merger of Toronto-based gold miners Agnico Eagle Mines Ltd. and Kirkland Lake Gold Ltd. may appease investors who are "indifferent" about gold, according to executives from both companies.

As consolidation continues in the gold industry, risk levels are important for investors, and the merger gives Agnico Eagle a low-risk business that can generate significant free cash flows, CEO Sean Boyd said during a Sept. 28 webcast.

"If consolidation is to be successful, it has to focus on taking advantage of regional consolidation opportunities that drive significant synergies and that also result in the best assets ending up in the strongest hands, and keeping the risk level low and the business high quality," Boyd said. "We believe we have accomplished all of those goals."

Agnico Eagle and Kirkland Lake expect the merger to drive $800 million in synergies within five years and $2 billion in pretax synergies within 10 years, and those estimates may increase, according to Boyd.

Under the merger terms, Kirkland Lake shareholders will receive 0.7935 of a common Agnico Eagle share for each common Kirkland Lake share, implying a combined market capitalization of about $24 billion. Closing is expected in December or in the first quarter of 2022.

The new Agnico Eagle will be 54%-owned by existing shareholders and 46%-owned by Kirkland Lake shareholders. The combined company is expected to produce 3.4 million ounces of gold in 2021, with 2.5 Moz of output coming from Canada.

The merger will create a gold producer with operations focused in the Abitibi greenstone belt that straddles Ontario and Quebec. The region hosts Agnico Eagle's LaRonde mine and its 50%-owned Canadian Malartic joint venture with Yamana Gold Inc. as well as Kirkland Lake's Detour Lake, Macassa and Holt mines.

The companies also own assets in the U.S., Australia, Sweden, Finland, Mexico and Colombia.

Kirkland Lake President and CEO Anthony Makuch said the merged company has operations in regions where it understands the geology, communities, climate and regulations. "I think the value creation that can come from that, it's hard to quantify," Makuch said.