Northgate Minerals Down 8%, Below $4 On Heavy Trade, But No Fresh News; AuRico Seen Buying It Cheap
Takeover target Northgate Minerals (NGX.TO) is down 8% and has dipped below $4 with close to 5.3 shares traded.
A Bloomberg report recently said AuRico Gold Inc. (AUQ.TO) is paying the cheapest valuation for a takeover of a North American gold producer in seven years even as bullion trades at highs.
The Halifax, Nova Scotia-based company that mines the precious metal in Mexico agreed to buy Northgate Minerals for $1.28 billion in stock to add production in Canada and Australia, Bloomberg noted. Including net cash, AuRico's acquisition valued Northgate at 14.7 times earnings before interest, taxes, depreciation and amortization, the lowest since 2004 for a North American deal worth more than $1 billion, according to data compiled by Bloomberg.
AuRico is paying about 64% less per dollar of earnings than Canadian rival Kinross Gold Corp. (K.TO) did for Red Back Mining Inc. a year ago, even after gold surged to a high of US$1,913.50 an ounce recently, Bloomberg said.
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