Northgate Minerals Shares Surged: What You Need to Know
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
So what: The all-stock deal values Northgate at roughly $1.5 billion, representing about a 45% premium to its Friday closing price. If the transaction goes through, AuRico stands to nearly double its gold resources, with production increasing to 470,000 ounces in 2011 from a previous 280,000 ounces.
Now what: The deal -- in which Northgate owners will get 0.365 of an AuRico share for each of theirs -- is expected to close in late October subject to shareholder and regulatory approval. "We're excited about this announcement given the acquisition will create a premier intermediate gold producer operating in three of the top mining jurisdictions in the world," AuRico CEO Rene Marion said. So while Northgate shares are probably all popped out for now, AuRico -- whose shares are down double-digit percentages today -- might be worth looking into.
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At the time this article was published Fool contributorBrian Pacamparaowns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool'sdisclosure policyalways gets a perfect score.
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