NEW YORK (TheStreet) -- Shares of Silver Standard Resources (SSRI) are slipping by 10.01% to $6.02 on heavy trading volume in mid-afternoon trading on Monday, as the mining company said it will acquire Canadian gold producer Claude Resources (CLGRF).
Silver Standard is offering 0.185 of a common share and C$0.001 in cash per Claude Resources share, according to a company statement. The deal values Claude at C$337 million in total, or about C$1.65 per share.
Claude shareholders will own about 32% of the combined company.
"Through this transaction we are adding a third high quality, strong cash flowing operation located in Canada, one of the best places in the world to operate mines. We also acquire a large underexplored land position with significant exploration upside," Silver Standard CEO Paul Benson said in a statement.
"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," he added.
Silver Standard is a Vancouver-based company engaged in the operation, exploration and development of precious metal resource properties.
About 3.48 million of Silver Standard's shares changed hands so far today compared to its average volume of 1.65 million shares per day.
Shares of Claude Resources are spiking 13.27% to $1.07 on heavy trading volume early Monday afternoon.
About 1.12 million of the company's shares were traded by this afternoon, much higher than its average volume of 198,760 shares per day.
Separately, TheStreet Ratings Team has a "Sell" rating with a score of D on the stock.
This is driven by some concerns, which should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks covered.
The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and weak operating cash flow.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: SSRI