Dallas, Texas 07/02/2015 (Financialstrend) – In what seems to be signs of the future times in the precious metals mining sector, equally matched gold mining firms headquartered in Canada have received the official go ahead from the Ontario Superior Court of Justice for their plan to merge with each other. The companies in question are $720 million market capped Alamos Gold Inc (NYSE:AGI) and AuRico Gold Inc (NYSE:AUQ) which has an $812 million market cap. The merged entities were waiting for final word from the Supreme Court tribunal which looks into the commercial sector. The court has given its approval to merge by way of a “plan of arrangement”. The court approved the deal on 26th June and the agreement is expected to come into effect from 2nd July of 2015.
Since the time of the court decision, the stock of AuRico Gold Inc (NYSE:AUQ) has come under pressure. It has shed close to 4 percent of its market valuation since 25th June. It is one of the largest gold production units in Canada. It has invested into mines located in North America, Northern Manitoba and Mexico. Ahead of the merger it has been developing projects in British Columbia and also expanding its operations in Manitoba.
Alamos Gold Inc (NYSE:AGI) shareholders have experienced a much harder fall, with close to 9.5 percent slide in the market valuation of their stock holding. It has mining operations in Mexico, Turkey and United States. The two big players in Canada had agreed to come together in order to pool in resources and tide over the prevailing situation of depressed pricing of gold in the international markets. The low price of gold had pushed these companies to tighten their belts and look at cost cutting in order to maintain profitability. The continued depression in the extended global economy has led to a similar move by other mining firms to look at consolidation with larger market players.