Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Alamos Gold Won't Raise Bid for Aurizon

Alamos Gold (NYSE: AGI  ) said that despite Hecla Mining (NYSE: HL  ) offering a higher bid to its own proposal to acquire Aurizon Mines (UNKNOWN: AZK.DL2  ) , it would not raise its consideration, as it believes its bid is superior.

In January Aurizon's management urged its shareholders to reject the C$780 million offer because it was too low and added development and geopolitic risks. Instead, they voted this week to approve a C$796 million offer Hecla made

Alamos says despite the lower bid, its offer is actually better for Aurizon shareholders because the Hecla proposal creates a "highly leveraged, hedged, debt-laden, financially constrained company."

Since Alamos is Aurizon's largest shareholder, with 16% of the stock, and because other large stakeholders have sided with it, Hecla may find it difficult to reach the required 66.67% approval threshold. Alamos also says Hecla is borrowing heavily to make the deal work; has hedged a large portion of its revenues from gold production; would dilute Aurizon shareholders' gold exposure because 80% of Hecla's revenues are from silver; and Hecla has produced less silver each year since 2009.

Alamos president and CEO John A. McCluskey was quoted as saying, "Our goals over the next few years include achieving production that positions us as one of the 25 largest gold mining companies in the world, while remaining among the 10 lowest-cost mining companies in the world."

Alamos' offer is open for acceptance until 5 p.m. today.


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2294292, ~/Articles/ArticleHandler.aspx, 10/1/2016 3:07:14 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 5 hours ago Sponsored by:
DOW 18,308.15 164.70 0.91%
S&P 500 2,168.27 17.14 0.80%
NASD 5,312.00 42.85 0.81%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/30/2016 4:03 PM
AGI $8.20 Down -0.10 -1.20%
Alamos Gold CAPS Rating: **
AZK.DL2 $0.00 Down +0.00 +0.00%
Aurizon Mines Ltd.… CAPS Rating: **
HL $5.70 Down -0.05 -0.87%
Hecla Mining CAPS Rating: **