(MENAFN) Canadian gold companies AuRico and Alamos announced a plan to merge their businesses, in a share swap valued at USD1.5 billion, The Peninsula Qatar reported.

The deal would create a medium-sized gold company with two operating mines in Mexico (Mulatos and El Chanate) and one in the Canadian province of Ontario (Young-Davidson).

According to the terms of the agreement, shareholders of both companies will each be holding 50 percent of the new company. The deal is subject to shareholder and regulatory approvals.

"The combination of diversified production from three mines and a pipeline of low-cost growth projects in safe jurisdictions equate to a leading gold intermediate," Alamos chief executive said.