Alamos Gold Inc. and AuRico Gold Inc. are set to merge their gold businesses in a US$1.5-billion transaction, which will create a mid-tier gold producer.
The deal only includes stocks and the shareholders of each company will own 50 per cent of the new company that will go by the Alamos name.
As soon as the deal became public, Alamos shares jumped 6.6 per cent to $7.90 and AuRico’s grew by 8.2 per cent to $4.09.
Since the market value for both companies is almost identical, this new merger will help them lower their cost of capital. The new venture is expected to produce around 400,000 ounces of gold in 2015, and more than 700,000 ounces of gold in 2018. CJ
