SHERF Sherritt International Corp (PK)

Silver Standard Resources Inc. on Monday announced a friendly deal to buy Canadian gold mining company Claude Resources Inc. for around 337 million Canadian dollars ($253 million), largely in stock.

The deal is the latest among Canadian mining companies aiming to bolster their financial positions and portfolios amid a lengthy slump in precious-metals prices but as gold prices begin to show hints of a turnaround.

Last month, Vancouver-based Tahoe Resources Inc. agreed to buy Canadian gold producer Lake Shore Gold Corp. in a friendly, all-stock deal, giving Tahoe two mines near Timmins in northern Ontario.

Silver Standard said Claude shareholders, who will own about 32% of the combined company on closing, will receive cash and stock that values Claude shares at about C$1.65 each. The offer is a premium of about 30% to Claude's closing price on Friday.

News of the deal sent Claude shares up 14% to C$1.45 in Monday's trading.

The combined company, which will comprise Claude's Seabee gold mine in northern Saskatchewan and Silver Standard's Marigold gold mine in Nevada and Pirquitas silver mine in Argentina, is expected to produce about 390,000 gold equivalent ounces in 2016.

"With financial synergies and our strong balance sheet, the combined company is well positioned to maximize value from our assets and pursue further growth opportunities," Silver Standard Chief Executive Paul Benson said.

Gold prices have been turning around this year and hit a 13-month high Friday as investors bet the U.S. Federal Reserve will hold off on raising interest rates.

Stronger gold prices have been good news for Canadian gold miners, whose shares have helped push the Toronto Stock Exchange's materials index up 24% so far this year. Analysts are also positive about gold's near-term prospects. TD Securities on Monday increased its gold-price forecast for this year to $1,259 an ounce from its previous estimate of $1,150.

Write to Judy McKinnon at judy.mckinnon@wsj.com

(END) Dow Jones Newswires

March 07, 2016 10:55 ET (15:55 GMT)

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