Alamos CEO says likely to drop Aurizon bid if it loses regulatory ruling

Tue Mar 12, 2013 6:29pm EDT
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* Says not willing to pay break fee to Hecla

* Alamos CEO reiterates not considering raising offer

* Hecla CEO says expects commission to leave poison pill in place

By Bhaswati Mukhopadhyay and Garima Goel

March 12 (Reuters) - Alamos Gold Inc said it was likely to walk away from a bid to buy Aurizon Mines Ltd if it loses a regulatory ruling on the merits of a poison pill adopted by Aurizon and the break fee committed to rival bidder Hecla Mining Co.

"We are not willing to pay a break fee to Hecla that essentially makes the transaction more expensive for us than it does for Hecla," Alamos CEO John McCluskey told Reuters.

Alamos, Aurizon's largest shareholder with a 16.11 percent stake, made a C$780 million hostile offer for the Canadian gold miner in January.

McCluskey said the C$27.2 million break fee pushes Alamos's cost of acquiring Aurizon beyond that of Hecla's.

"Hecla is bidding so little over and above our current bid that the break fee that is in place alone makes it even more expensive. That is quite an absurd situation," McCluskey said, reiterating that Alamos was not considering raising its offer.   Continued...