Jefferies Reaffirms Bullish Stance on Alamos Gold (AGI), PT Raised to $39

Alamos Gold Inc. (NYSE:AGI) is one of the best precious metals stocks to buy now. On September 15, Jefferies analyst Fahad Tariq reiterated his Buy rating but raised the price target on the stock to $39.00 from $38.00. The reason for the higher price target is the divestment of its assets in Turkey at a much better valuation than expected.

On September 14, the company announced to have agreed to sell its wholly owned Turkish subsidiary Dogu Biga Madencilik Sanayi, which owns the Kirazli, Agi Dagi, and Camyurt projects located in northwestern Turkey.

Jefferies Reaffirms Bullish Stance on Alamos Gold (AGI), PT Raised to $39

Photo by Zlaťáky.cz on Unsplash

Alamos will receive $470 million in cash for the deal, a value that was significantly ahead of the consensus estimate of $273 million and Tariq’s own estimates of $19 million. According to the agreed-upon payment structure, the company will receive $160 million at the end of Q4 2025, upon the deal’s closure. This will be followed by payments of $160 million and $150 million in the two subsequent years after the deal closes.

The company expects to use these payments, which are secured by international financial institutions, to fund the development of its pipeline of growth projects and reduce its debt.

John A. McCluskey, President and Chief Executive Officer of Alamos, believes this deal has generated substantial value for the company. He plans to use the proceeds to strengthen and develop the lower-cost, high-return projects in North America, which will bolster its growth profile.

Alamos Gold Inc. (NYSE:AGI) is a Canadian intermediate gold producer with diversified production from three operations in North America, along with several development stage projects.

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Disclosure: None. This article is originally published at Insider Monkey.