Toronto-based Alamos is offering $4.65 in cash or 0.2801 of an Alamos share for each Aurizon share with the cash portion capped at a maximum of $305 million and the stock portion limited to 23.5 million Alamos shares.
Aurizon shares rose $1.14 to $4.55 as nearly 16 million traded hands, making it one of the highest-volume issues on the Toronto Stock Exchange. Alamos shares were down $2.02 or nearly 12 per cent at $14.90 with about 2.5 million traded.
Alamos said the combined company would create a leading intermediate-sized gold miner that would be more attractive to the international investor community and give enhanced access to North American capital markets.
"We believe that our offer presents an attractive alternative for Aurizon shareholders," Alamos president and chief executive John McCluskey said in a statement.
"We believe the combined companies will form one of the strongest and lowest-risk production and growth profiles in the gold sector today."
Aurizon said it was working with advisers to review the offer.
"We will make recommendations on this proposal that we believe are in the best interest of Aurizon shareholders," the company said in a brief statement.
Alamos already owns about 26.5 million Aurizon shares, or about 16 per cent of its issued stock. Most of those shares were acquired recently from other Aurizon shareholders and announced Monday by Alamos along with the takeover bid.
Aurizon has eight properties in Quebec including the Casa Berardi gold mine as well as several development and exploration projects.
The company earned $5.5 million or three cents per share on $49.8 million in revenue for the quarter ended Sept. 30. That compared with a profit of $12.7 million or eight cents per share on $68.1 million in revenue a year earlier.
Aurizon produced 29,913 ounces of gold in the third quarter at an average cash cost of $759 per ounce. That compared with 44,457 ounces at a cash cost of $497 per ounce in the third quarter of 2011.
Alamos has operations in Mexico, including the Mulatos gold mine, and Turkey where it has two advanced-stage gold projects.