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Published : April 13th, 2015

Canada's Alamos Gold, AuRico merger may spark rival bids

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Keywords :   Canada | G Mexico | Gold | Gold Miners | Growth | Mexico |

Canada's Alamos Gold, AuRico merger may spark rival bids

(Recasts with possible competing bids)

By Nicole Mordant and Shubhankar Chakravorty

April 13 (Reuters) - Canadian gold miners Alamos Gold Inc and AuRico Gold Inc unveiled a $1.5 billion merger plan on Monday, setting the stage for possible competing offers as miners scout for assets amid slowing growth and weaker gold prices.

The combined mid-sized producer, with operations in Canada and Mexico, will have 2015 output of 375,000 to 425,000 ounces of gold.

Although analysts said the deal makes sense for the two miners - Alamos has excess cash and AuRico has a mine in Ontario that is ramping up production - competing offers could emerge.

"We believe AuRico, particularly Young-Davidson (Ontario mine), offers a compelling asset at current valuation levels for an interloper and as such, we see room for a potential premium deal to occur," Raymond James analyst Phil Russo said in a note to clients.

Possible suitors could include Canadian miners Goldcorp Inc , Yamana Gold Inc and Agnico Eagle Mines Ltd .

A Yamana spokesman declined to comment, and Goldcorp and Agnico did not immediately respond to requests for a statement.

A stumbling block to a competing bid may be a $83.3 million side deal Alamos struck to buy a 9.9 percent stake in AuRico via a private placement for C$2.99 a share, a 21 percent discount to AuRico's closing price on Friday.

This deal is not contingent on the acquisition closing, so any rival bidder for AuRico would have to pay a premium to buy out those shares, on top of standard break fees.

AuRico shares rose 7 percent to C$4.04, while those in Alamos were up 6 percent at C$7.86 in afternoon trading.

ALAMOS GOLD INC

Alamos and AuRico shareholders will each own about half the combined company, which is called Alamos Gold.

A new company, AuRico Metals Inc, will be formed to hold interests in certain AuRico assets, including the Kemess project in British Columbia.

AuRico Chairman Alan Edwards will be chairman of the combined company, while Alamos Chief Executive John McCluskey will be CEO. Five directors each from AuRico and Alamos will sit on the board.

Maxit Capital LP was Alamos' financial adviser, while Torys LLP was its legal counsel in Canada and the United States.

AuRico was advised by Scotiabank. Its Canadian legal counsel was Fasken Martineau and its U.S. legal counsel was Paul Weiss.

(Editing by Don Sebastian. Editing by Andre Grenon)

Read the rest of the article at finance.yahoo.com
Data and Statistics for these countries : Canada | Mexico | All
Gold and Silver Prices for these countries : Canada | Mexico | All

VanEck Vectors Global Alternative Energy ETF

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CODE : AEM.TO
ISIN : CA0084741085
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Agnico Eagle Mines is a gold producing company based in Canada.

Agnico Eagle Mines produces gold, copper, lead, silver and zinc in Canada, in Finland and in Mexico, develops copper, gold, lead, silver and zinc in Canada, and holds various exploration projects in Canada.

Its main assets in production are LARONDE, LARONDE (EL COCO) MINE, MEADOWBANK and LARONDE EXTENSION in Canada, PINOS ALTOS in Mexico and KITTILA in Finland, its main assets in development are LAPA, GOLDEX and LARONDE in Canada and its main exploration properties are BOUSQUET MINE, JOUTEL, NIGHTHAWK, GERMAN PROPERTY, MOUNTJOY PROPERTY, THORNLOE, REID, NW DELORO, CARR - WILKIE, WHITNEY TISDALE, WARK, EASTER DOME, MELIADINE, ELLISON, BOUSQUET AND ELLISON, COLOMAC MINE, CABALLO BLANCO PROPERTY and VICTORY LAKE in Canada and MORELOS SUR in Mexico.

Agnico Eagle Mines is listed in Canada, in Germany and in United States of America. Its market capitalisation is 5.2 billions as of today (US$ 3.7 billions, € 3.5 billions).

Its stock quote reached its lowest recent point on October 29, 1999 at 10.10, and its highest recent level on November 14, 2024 at 109.24.

Agnico Eagle Mines has 47 442 200 shares outstanding.

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TORONTO (AEM.TO)NYSE (AEM)
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