Alamos Gold is buying Richmont Mines in a takeover worth US$770 million.
The deal is an all-cash transaction, with Alamos (AGI.TO) offering $14.20 for each Richmont (RIC.TO) share.
"[Richmont’s] Island Gold Mine is a high quality asset in every respect," said Alamos CEO John McCluskey in a press release. "We see excellent potential for reserve and production growth from one of the highest grade, lowest cost gold mines in Canada."
The purchase is subject to a shareholder vote, which is expected to take place in November, with the deal seen closing later that month. The combined company sees total output this year at 500,000 ounces.
The two sides have agreed to a reciprocal US$35-million break fee if the deal doesn't proceed.
BMO Capital Markets served as financial advisor to Alamos. Macquarie Capital Markets Canada and Maxit Capital advised Richmont.
Richmont separately announced on Monday it will sell its Quebec assets to Monarques Gold in return for a 19.9 per cent equity stake in the corporation.