Canada-based intermediate gold producer Alamos Gold has agreed to take full ownership of gold and critical mineral explorer Orford Mining in a deal valuing 100% of the latter at around C$24m ($17.78m).
According to the terms of the agreement, shareholders of Orford Mining will be issued 0.005588 of an Alamos Gold common share for each Orford Mining share. This represents a deemed consideration of C$0.1 ($0.074) per Orford Mining share.
Currently, Alamos Gold owns 61.6 million shares of Orford Mining, representing nearly 27.5% of the latter’s basic common shares outstanding.
Alamos Gold intends to issue about 0.9 million shares for a total consideration of C$16m ($11.85m), excluding the former’s existing ownership of Orford Mining.
Through the takeover, Alamos Gold aims to consolidate its existing ownership of Orford Mining shares by adding the Qiqavik gold project located in Quebec, Canada.
Besides, Alamos Gold will acquire interests in various exploration stage critical mineral and gold projects in Quebec. These include West Raglan, the Joutel Properties, and Nunavik Lithium.
Alamos Gold president and CEO John McCluskey said: “Our acquisition of Orford is consistent with our strategy of building out a pipeline of high-quality, long-term projects, in good jurisdictions, to complement our near-term organic growth projects in Canada.
“Qiqavik fits that strategy perfectly as an attractive early-stage gold project, located in one of top mining jurisdictions in the world.”
The intermediate gold producer has diversified production from three operating mines in North America including the Young-Davidson and Island gold mines in northern Ontario, Canada, and the Mulatos mine in Sonora State, Mexico.
Alamos Gold also has a portfolio of growth projects, including the phase 3+ expansion at Island Gold, and the Lynn Lake project located in Manitoba, Canada.
Following the closing of the transaction, the Orford Mining shares are anticipated to be delisted concurrently from the TSX Venture Exchange (TSXV).
Orford Mining president, CEO and director David Christie said: “Orford’s properties have shown strong exploration promise, in particular the company’s Qiqavik Gold project in Nunavik which has widespread, high grade gold surface samples pointing to the camp scale gold potential of the property.
“We are confident that Alamos has the skill set and balance sheet to advance the Orford projects through the next stages of exploration and development.”
Subject to certain conditions, including requisite regulatory approvals, the deal is expected to close in April 2024.
