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Kirkland Lake Gold Ltd. has no intention of improving its $4.9-billion all-stock offer for Detour Gold Corp., despite calls from one of Detour’s biggest shareholders for a last-minute sweetener.

Toronto-based Kirkland offered 0.4343 of its own shares for each Detour share, a 24-per-cent premium to the Nov. 22 closing price.

“We can’t, and don’t intend to, change the terms,” Tony Makuch, chief executive of Kirkland Lake, said in an interview on Friday. “It’s a full and fair offer.”

Even though no other bidder surfaced with a higher offer for Toronto-based Detour, the market had been been anticipating that Kirkland might improve its bid. Over the past few weeks, shares in Detour consistently traded above Kirkland’s offer, before finally dropping a few cents below it, on Friday.

When the deal was announced, Kirkland shares fell by 17 per cent, wiping out much of the paper premium, as investors worried about the merits of one of the world’s most profitable miners buying a low-grade laggard.

Kirkland has repeatedly argued that the Detour acquisition will significantly add to its gold reserves. While Kirkland’s marquee Fosterville mine in Australia has been a spectacular success in terms of grade, it has a short mine life.

Despite expressing some reservations, two proxy advisory firms, Institutional Shareholder Services Inc. and Glass, Lewis & Co. gave the deal the thumbs-up this week, recommending that both Detour and Kirkland shareholders vote in favour.

Still, Doug Groh, portfolio manager with New-York-based Tocqueville Asset Management, Detour’s second-biggest shareholder, with a 4.4-per-cent stake, hasn’t been swayed.

“We’re not in favour of the deal as it now stands,” Mr. Groh said. “We think it’s very reasonable for Kirkland to reconsider the bid with less equity and a cash component. ”

Glass Lewis agreed with his thesis, and posited in the report that a 50-per-cent cash component would benefit shareholders on both sides of the deal.

Paying partly in cash would reduce “the dilutive impact of the share issuance,” for Kirkland, the proxy advisory firm wrote, and it would also give Detour stockholders ”immediate liquidity at the headline premium.”

While Kirkland’s shares have recovered some of the initial losses, it’s still trading 10 per cent below predeal levels, meaning a good chunk of the initial premium has vanished.

But Kirkland’s CEO made it clear that he has no leeway to offer cash.

Mr. Makuch says he would risk losing the support of his biggest shareholders, including Eric Sprott and Tom Stanley, both of whom have pledged to support the deal in its current format only, and not if the terms are changed.

(Mr. Stanley, president of Resolute Funds in Toronto, is also a holder of Detour shares, and he told The Globe and Mail he intends to vote those shares in favour of the deal).

Shareholders of both companies will vote on the deal Jan. 28. The threshold for the transaction to pass is a majority of votes cast for Kirkland Lake and at least two-thirds at Detour.

Whatever the outcome, nobody can accuse Detour of not conducting a thorough auction.

In a regulatory filing in December, the company said that as early as 2018, it was in communication with 12 potential merger partners, or buyers. Last year, the list of serious suitors was whittled down to about seven.

Toqueville’s Mr. Groh says that Toronto-based Kinross Gold Corp. was one of those companies. “Kinross did tell me that they had looked at it,” he said.

Another source familiar with the Detour takeover discussions, said that Kinross was "party A” in Detour’s recently published management information circular. In the materials, Party A was described as a “globally-focused mid-cap gold miner with similar operations to Detour.”

Kinross has operations in the United States, Russia and West Africa. Like Detour, Kinross is an open-pit mining specialist.

According to the circular, Party A was interested in buying Detour as early as 2018, held multiple discussions with the company, and conducted thorough due diligence. The company was one of the final few parties vying for Detour and, as recently as November, proposed buying Detour in an all-share transaction, offering to pay up to a 10-per-cent premium.

Kinross declined to comment for this story.

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