Gold and silver stocks remained in negative territory on Monday afternoon as precious metals turned modestly lower. After opening near unchanged, the Philadelphia Gold & Silver Index (XAU) fell by 1.3% to end the day at 178.71.
COMEX gold futures settled unchanged at $1,730.90 per ounce, but subsequently dipped to as low as $1,726.00 in electronic trading. Silver futures ended with a loss of $0.09, or 0.2%, at $32.52 per ounce at the COMEX and later retreated to $32.25 per ounce.
The slight weakness in precious metals came as the U.S. dollar inched higher against a basket of the world’s most traded currencies.
Notable XAU components in the red included Eldorado Gold (EGO) and Silver Standard Resources (SSRI) – which slid by 2.3% to $14.57 and by 2.6% to $14.45 per share, respectively.
(Rankings and analysis of every XAU component available at GoldAlert Pro – http://pro.goldalert.com)
Gold and silver equities were unable to rally in spite of the latest multi-million dollar acquisition in the sector. Osisko Mining (OSK.TSX) announced that it has come to an agreement to purchase of Queenston Mining (QMI.TSX) for approximately C$550 million. Queenston owns one of the largest land areas in the Kirkland Lake region of Ontario, Canada – including stakes in ten gold deposits that contain current and historic mineral resources.
The friendly acquisition is an all-stock transaction whereby Osisko will offer 0.611 shares of OSK.TSX for each share of QMI.TSX – which represents a price of C$6.00 per share and a 45% premium to the volume-weighted average price of QMI.TSX over the past 30 days.
On Monday afternoon, shares of Queenston Mining climbed by 13.0% to C$5.66 while OSK.TSX dropped by 7.9% to C$9.04 per share.
While the deal has been approved by both companies’ boards of directors, due to the location of Queenston’s assets being in a relatively-high politically safe region, several analysts noted that a rival bidder could emerge. Stifel Nicolaus analyst Craig Stanley cited Agnico-Eagle Mines (AEM), AuRico Gold (AUQ), Gold Fields (GFI) as possible suitors.
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