US silver producer Hecla Mining (NYSE:HL) announced Monday it will buy Canadian Aurizon Mines (TSX:ARZ) (NYSE:AZK), for about $774 million (Cdn $796m) to gain control of a gold mine in Quebec.
The bid comes only a month after the Vancouver-based company rejected a hostile offer from fellow Canadian miner Alamos Gold (TSX:AGI).
The offer is valued at $4.75 per share, 10 cents more than the bid by Alamos, which had offered a mix of stock and cash valued at $4.65 per share.
Aurizon said Hecla offered a substantial amount of cash plus shares in a company that will be worth about $1.6 billion after the combination.
"Hecla and Aurizon together create a unique precious metals company with three long-life, high-grade, low-cost mines in some of the best mining jurisdictions in the world," Hecla CEO and President Phillips Baker said in a statement.
Investors welcome the news. Shares in Aurizon were up 18 cents at $4.53 on the Toronto Stock Exchange on Monday at 12:57 pm ET.
The company has eight properties in Quebec, including the Casa Berardi gold mine, as well as several development and exploration projects.
Last month Aurizon said it was negotiating with a number of potential buyers for its Casa Berardi, which is expected to produce 125,000 to 130,000 ounces of gold this year.
Toronto-based Alamos has a mine and mineral rights in Mexico and an advanced development project in Turkey, while Hecla has mines in Alaska and Idaho, where its headquarters is located, as well as land packages in several other US states and in Durango, Mexico.
The American silver producer expects to generate between eight million to nine million ounces of the precious metal this year from its primary silver mines.
A successful transaction will require Aurizon shareholders to tender a minimum of 66% of shares, and a special Aurizon shareholder meeting is scheduled for May 2013. If the deal is approved and all court and regulatory approvals are received, the agreement is expected to close in the second quarter of 2013.
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