Alamos Gold Inc. is moving forward with an agreement to acquire Richmont Mines Inc., creating a new top 10 North American gold producer. The friendly acquisition was announced Sept. 11 and valued around $933 million.

When the deal is complete, Alamos shareholders will own 77 per cent of the new company and Richmont shareholders will own the remaining 23 per cent.

The exchange ratio of 1.385 Alamos common shares for each Richmont share is valued at $14.20, representing a 22 per cent premium to Richmont's TSX closing price as at Sept. 8.

John McCluskey, president and CEO of Alamos Gold said in a release that he saw the acquisition of Richmont’s 100-per-cent-owned Island Gold mine as reflecting Alamo’s core strategy of “creating long-term value through operating high-quality assets.”

The high-grade underground mine located in northeast of Wawa, Ontario, produced 49,882 ounces in the first half of 2017 with an all-in-sustaining-cost (AISC) of $751 per ounce. That figure improved to a record low for the company of $677 in the second quarter of 2017.

The acquisition will complement Alamos’ current portfolio of three North American mines, including the Young-Davidson mine near Timmins, Ontario, and the El Chanate and Mulatos mines in Sonora, Mexico.

“The Island Gold mine is a high-quality asset in every respect,” said McCluskey in a release. “We see excellent potential for reserve and production growth from one of the highest-grade, lowest-cost gold mines in Canada.”

Along with the Alamos acquisition, Richmont announced the sale of their properties in Quebec to Monarques Gold Corp. The divestiture of Beaufor mine, Camflo mill and the Wasamac development project were not a condition of the acquisition. Instead it came as the result of a strategic review process that Richmont disclosed in the first quarter of 2017.

“Our shareholders will maintain exposure to the potential of the Island Gold mine, which is now firmly established as one of the lowest cost operations in the Americas,” said Renaud Adams, president and CEO of Richmont in a release.

Pending the approval of shareholders of both firms, the transaction is expected to close in November 2017.