Miner Hecla buys Canada's Aurizon for about $775M
Silver miner Hecla to buy Canada-based gold miner Aurizon in $775 million cash-and-stock deal
COEUR D'ALENE, Idaho (AP) -- Silver miner Hecla is adding a Canadian gold mine to its business by buying 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 Monday that it would buy 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 or 52 cents, or 11 percent, to $4.12 in midday trading. Aurizon's U.S.-traded shares rose 15 cents, or 3.6 percent, to $4.37.
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 its Casa Berardi mine in Quebec to produce 125,000 to 130,000 ounces of gold this year. Aurizon is also developing other gold properties.
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.
