Miner Hecla buys Canada's Aurizon for about $775M
COEUR D'ALENE, Idaho (AP) — Silver miner Hecla said Monday that it is buying gold miner Aurizon for about $775 million.
The acquisition has been approved by Aurizon's board.
Hecla Mining Co., which is based in Coeur D'Alene, Idaho, said it would buy all of the Canadian company's outstanding shares for cash and stock totaling 4.75 Canadian dollars ($4.63) each, 9 percent above the Friday closing price of Aurizon Mines Ltd.'s U.S.-traded shares. The companies said their agreement valued Aurizon at CA$796 million.
Aurizon's board in January rejected a buyout offer from Alamos Gold Inc., another Canadian gold producer. Alamos had bid CA$780, then worth about $792 million, for Aurizon.
Hecla shares slid 12 percent, or 56 cents, to $4.08 in morning trading. Aurizon's U.S.-traded shares rose 4.3 percent, or 18 cents, to $4.40.
Shareholders can chose to receive CA$4.75 Canadian in cash or 0.9953 of a Hecla share. Hecla will pay up to CA$513.6 million in cash and issue up to 57 million shares.
Hecla said that the combined company's mining assets would be in "politically stable" locations and would have a lower cost structure. Hecla expects its primary silver mines to produce between 8 million and 9 million ounces of silver in 2013, while Aurizon expects the Casa Berardi mine in Quebec to produce 125,000 to 130,000 ounces of gold this year.
Assuming the deal is approved by Aurizon shareholders, it's expected to close by the end of June. Based on current share prices, the combined company is expected to have a market capitalization of about $1.64 billion.