TORONTO (miningweekly.com) – The shareholders of Canadian miners Alamos Gold and AuRico Gold voted overwhelmingly in support of the proposed $1.5-billion merger of the companies, which will create a new midtier gold producer.

When the deal closed, a reconstituted Alamos would hold a diversified portfolio of assets in stable jurisdictions, underpinned by two top-tier producing mines – Young-Davidson, Canada, and Mulatos, Mexico – as well as a significant pipeline of high-quality development projects. The deal is expected to close by July 2.

AuRico shareholders voted 98.8% in favour of the transaction, while 90.6% of Alamos shareholders supported the transaction.

Under the terms of the merger, shareholders of Alamos and AuRico would each own half the combined company. Alamos shareholders would receive one share of the combined company, which would be named Alamos Gold and $0.0001 in cash for each share held.

AuRico shareholders would receive 0.5046 of the combined company's shares for each share held.

The new company was expected to produce between 375 000 oz and 425 000 oz of gold this year, with the potential to grow organically to more than 700 000 oz/y.

As part of the merger, the two companies would also spin-out a new company to be named AuRico Metals, which would be capitalised with $20-million and hold stakes in certain AuRico mines, including the Kemess project, in British Columbia.

AuRico Metals would have a stable, diversified revenue stream from three royalty assets, including a newly created 1.5% net smelter return (NSR) royalty on the Young-Davidson mine and the existing 2% and 1% NSR on Crocodile Gold’s Australia-based Fosterville and Stawell mines, respectively.

AuRico chairperson Alan Edwards would become chairperson of the new Alamos Gold and Alamos CEO John McCluskey would be CEO.

Five directors each from AuRico and Alamos would sit on the board.