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Shares of Alamos Gold (TSX:AGI) shot up this week as the gold producer announced it would be purchasing Argonaut Gold (TSX:AR) for $325 million. Shares of Alamos stock jumped by 7% at the news, with shares of AR stock shooting up by a whopping 30%.
What happened?
Both companies announced the $325 million deal on March 27 in an all-stock deal. Investors were excited, to say the least. The deal would bring Alamos’s annual gold production to a whopping 600,000 ounce per year. Furthermore, the potential long-term could shoot it up to even 900,000 ounces per year, according to a statement by the companies.
Right now, Alamos stock produces about 529,300 ounces of gold per year as of 2023 levels. While this is still a fraction of the millions produced by some of the largest companies in the world, it definitely will give Alamos stock more clout — and at a time when gold prices are surging.
Meanwhile, AR…
