Gold producers have been cutting costs, shedding assets or consolidating amid a slide in gold prices, which had fallen 8.4 percent in the past 12 months.
The deal is one of the biggest since Osisko Mining Corp OSK.TO sold most of its assets for C$3.9 billion to Yamana Gold Inc (YRI.TO) and Agnico Eagle Mines Ltd (AEM.TO) in April last year to thwart a hostile takeover bid from Goldcorp Inc G.T.
Alamos and AuRico expect the combined company, Alamos Gold Inc, to produce 375,000-425,000 ounces of gold in 2015 in Mexico and Canada. [ID:nMKWHpVb3a]
While Alamos produced 140,500 ounces of gold in 2014, AuRico produced 224,032 ounces.
Shareholders of Alamos and AuRico will each own half of
the combined company, the companies said on Monday.
Alamos shareholders will receive one share of the combined company and $0.0001 in cash, for each share held.
AuRico shareholders will receive 0.5046 of the combined company's shares, for each share held.
Alamos also said it would buy about 27.9 million AuRico shares, or 9.9 percent of the company, in a private placement at $2.99 per share for gross proceeds of about $83.3 million.
The merger is expected to close in the second quarter.
The companies also said a new company, AuRico Metals Inc, will be formed and capitalized with $20 million to hold interests in certain AuRico mines, including Kemess project in British Columbia.
AuRico Chairman Alan Edwards will serve as the chairman of the combined company, while Alamos Chief Executive John McCluskey will be the CEO.
The combined company's board will comprise 5 directors each from AuRico and Alamos, the companies said.
Maxit Capital LP served as 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.
(Reporting By Shubhankar Chakravorty in Bengaluru; Editing by Don Sebastian)
No comments:
Post a Comment