The deal is done with court approval given of Alamos Gold’s acquisition of its Dubreuillville mining camp neighbour, Argonaut Gold, and its flagship Magino open-pit mine.
The Toronto gold company announced July 12 that a final order was granted by the Ontario Superior Court of Justice to approve the all-share US$325-million transaction to acquire all of the issued and outstanding common shares of Argonaut. The court approved the plan of arrangement on July 5.
The acquisition merges Alamos’ Island Gold mine with Argonaut’s Magino open-pit operation, situated just over the property boundary. Magino entered commercial production last November. The combined operations, now dubbed the Island Gold District, provide Alamos with access to a new processing facility, built by Argonaut, which meshes nicely with a major underground mine expansion taking place at Island Gold. Magino also hosts great exploration potential to deliver high-grade gold from beneath the pit.
Argonaut’s remaining assets in the U.S. and Mexico will be spun off into a newly created junior gold producer named Florida Canyon Gold. It will be headquartered in Toronto. Approval for that new company was obtained by the Federal Economic Competition Commission in Mexico on July 11.
On July 16, Argonaut common shares will be delisted from the Toronto Stock Exchange. On the same day,. Florida Canyon common shares will commence trade on the TSX-Venture Exchange on the same day under the symbol “FCGV".
In the deal, Argonaut shareholders are entitled to receive 0.0185 of a Class A common share of Alamos and 0.1 of a common share of Florida Canyon Gold in exchange for each issued and outstanding common share of Argonaut
Alamos and Argonaut shareholders will own 95 per cent and 5 per cent of this junior miner, respectively.
Alamos is depositing a $10-million private placement into Florida Canyon Gold to boost its ownership stake to 19.99 per cent. The money is for working capital and general corporate purposes.
“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,” said John A. McCluskey, Alamos president-CEO, in a news release.
“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.”
Alamos is considered a mid-tier gold producer with Island Gld and the Young-Davidson mine outside Matachewan in northeastern Ontario. The company operates mines in the Mulatos District of the Sonora State in Mexico and has a pipeline of up-and-coming mine projects, including Lynn Lake in Manitoba.
