Canadian gold producer Alamos Gold has completed the previously announced acquisition of all the issued and outstanding common shares that it did not already own of rival gold company Argonaut Gold.
Earlier this month, the deal secured a final order from the Ontario Superior Court of Justice as well as approval from the Federal Economic Competition Commission in Mexico (COFECE).
Through the deal, Alamos Gold adds Argonaut Gold’s Magino mine located near the former’s Island gold mine in Ontario, Canada.
Argonaut Gold’s assets in the US and Mexico have been spun out as a newly formed junior gold producer dubbed Florida Canyon Gold.
Under the terms of the transaction, shareholders of Argonaut Gold will receive 0.0185 of a Class A common share of Alamos Gold and 0.1 of a common share of Florida Canyon Gold in exchange for each issued and outstanding common share of Argonaut Gold.
As part of the acquisition, Alamos Gold has issued nearly 20.4 million Class A Shares and has around 419.7 million Class A Shares outstanding.
Shareholders of Alamos Gold and Argonaut Gold hold about 95% and 5% of the pro forma company, respectively.
In line with the completion of the deal, Alamos Gold has wrapped up a $10m private placement into Florida Canyon Gold. This will increase Alamos Gold’s equity interest in the newly created company to 19.99%.
Furthermore, Argonaut Gold’s common shares will be de-listed from the Toronto Stock Exchange (TSX) and Florida Canyon Gold’s common shares will commence trading on the TSX Venture Exchange (TSX-V).
Alamos Gold president and CEO John McCluskey said: “Through our acquisition of Argonaut, we have further enhanced our unique positioning as a Canadian focused, intermediate gold producer, with growing production and declining costs.
“The integration of Magino and Island Gold is expected to unlock significant synergies through the use of shared infrastructure.
“Together, they will create one of the largest and lowest cost gold mines in Canada with significant longer-term expansion potential supported by their long mine lives, and ongoing exploration success.”
