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Investors in AuRico Gold Inc. have given a cool reception to the company's $1.46-billion deal to take over Northgate Minerals Corp. , with shares down more than 15 per cent since the Monday morning announcement.

Some are suggesting AuRico is overpaying for Northgate and its flagship Young-Davidson asset being built in northern Ontario. Under the agreement, AuRico will pay 0.365 of a common share for each Northgate common share, equating to a 60 per cent premium to Northgate's closing price on Friday.

But several analysts still see upside to AuRico shares and the formation of a new intermediate gold company.

CIBC World Markets Inc. analyst Brian Quest is among the most upbeat, upgrading AuRico today to "sector outperformer," while maintaining a price target of $15.

We "believe that a gold producer operating in Australia, Canada, and Mexico, producing nearly 500,000 ounces of gold in 2012, should garner support in the years to come," Mr. Quest said in a research note.

And while most analysts say a competing bid is unlikely, Mr. Quest begs to differ. "We view the possibility of an interloper as relatively high for this transaction, as the offer price for Northgate is still relatively low enough on most metrics to allow almost any intermediate or senior producer to bid an extra 20 per cent and still have the acquisition accretive," he said.

Canaccord Genuity analyst Wendell Zerb maintained a "hold" rating and $13.45 price target, noting the combined company would face higher cash operating costs than AuRico would on its own. But he also sees a number of benefits, including reserve additions and an experienced management group to lead development of sometimes challenging assets.

Desjardins Securities Inc. analyst Brian Christie downgraded his rating to "hold" from "buy" but maintained a $15 price target. He's concerned that the deal will dilute the net asset value of the company, as an extra 107 million AuRico shares would be issued as part of the deal.

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For the second time in three months, Canaccord Genuity analyst David Tyerman has clipped his price target on Transat A.T. Inc.

Transat largely serves trans-Atlantic vacationers this time of year, a market that is facing increased competition as well as the headwinds created by weakening European economies.

"We believe the competitive situation in this market has deteriorated over the past three months as increased capacity may have resulted in more challenging pricing. Moreover, the outlook in TRZ's other markets has worsened. Economic worries in Europe and political unrest in North Africa does not bode well for TRZ's Europe segment, which derives a substantial portion of its revenues from the French leisure market," Mr. Tyerman said.

"We continue to believe that the forecast risk for TRZ is very high," he concluded

Downside: Mr. Tyerman cut his price target to $10.50 from $11.25 and maintained a "hold" rating.

Earlier: Canaccord downgrades Transat

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IBI Group Inc. , which provides a range of services focused on the development of cities, reported record revenues and improving profitability in its second quarter, with margins trending higher. "We see IBI's operating results continuing to improve as the company focuses on social and transit infrastructure development both domestically and internationally," commented CIBC World Markets Inc. analyst Paul Lechem.

Upside: Mr. Lechem upgraded IBI to "sector outperformer" while raising his price target by 25 cents to $16.75.

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Sprott Resource Corp. "provides compelling exposure" to private companies involved in oil and gas, agriculture and mining, Jennings Capital Inc. analyst Marc Charbin said in initiating coverage with a "buy" rating. "SCP's management team and board have a proven track record and continue to see more deal flow in the resource sector than perhaps most investors in the world," he said .

Upside: Mr. Charbin set a price target of $6.25.

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Amaya Gaming Group Inc. , a software development and lottery-based solutions provider, is likely to face delays in the launch of a number of initiatives in the near term, warned Canaccord Genuity analyst Eyal Ofir. "However, we expect the addition of Chartwell Technologies to offset some of the negative impact and help Amaya post robust top-line growth for the remainder of the year and into 2012," he said.

Downside: Mr. Ofir maintained a "speculative buy" rating and lowered his price target by $1 to $5.

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