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Alamos Gold Inc. is pleased to announce the completion of the previously announced acquisition of all the issued and outstanding common shares of Argonaut Gold Inc. not already held by Alamos. A Final Order was granted by the Ontario Superior Court of Justice on July 5, 2024 approving the Plan of Arrangement pursuant to which the Transaction was implemented. Approval from the Federal Economic Competition Commission in Mexico was also obtained on July 11, 2024.
As part of the Transaction, Alamos acquired Argonaut’s Magino mine, located adjacent to Alamos’ Island Gold mine in Ontario, Canada. Argonaut’s assets in the United States and Mexico have been spun out as a newly created junior gold producer named Florida Canyon Gold Inc. (“Florida Canyon Gold”). Under the terms of the Transaction, shareholders of Argonaut will be 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 (the “Exchange Ratio”).
Alamos issued approximately 20.4 million Class A Shares as part of the Transaction and on closing has approximately 419.7 million Class A Shares outstanding. Alamos and Argonaut shareholders own approximately 95% and 5% of the pro forma company, respectively. Concurrent with the closing of the Transaction, Alamos completed a $10 million private placement into Florida Canyon Gold, increasing Alamos’ equity interest to approximately 19.99% (the “Private Placement”). Argonaut’s common shares are expected to be de-listed from the Toronto Stock Exchange (the “TSX”) on July 16, 2024. Florida Canyon Gold’s common shares are expected to commence trading on the TSX Venture Exchange (the “TSX-V”) on July 16, 2024, under the symbol “FCGV”.
“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,” said John A. McCluskey, President and Chief Executive Officer.
Early Warning Disclosure
Immediately prior to the Private Placement, after giving effect to the Transaction, Alamos had beneficial ownership of, or control over, 17,482,518 common shares of Florida Canyon Gold, representing approximately 13.67% of the issued and outstanding common shares of Florida Canyon Gold. After giving effect to the Private Placement, Alamos had beneficial ownership of, or control over, 27,609,565 common shares of Florida Canyon Gold, representing approximately 19.99% of the issued and outstanding common shares of Florida Canyon Gold.
Alamos acquired the additional common shares of Florida Canyon Gold in connection with the Transaction to allow Florida Canyon Gold to fund its immediate liquidity needs as a newly created junior gold producer. The net proceeds from the Private Placement will be used by Florida Canyon Gold for working capital and general corporate purposes.
An early warning report in respect of the Private Placement will be filed in accordance with applicable securities laws and will be available on the SEDAR+ profile of Florida Canyon Gold at www.sedarplus.ca. To obtain a copy of the early warning report, once filed, please contact Alamos at Brookfield Place, 181 Bay Street, Suite 3910, Toronto, Ontario, M5J 2T3, Attention: Scott K. Parsons, 416-368-9932 x 5439.
The head office address of Florida Canyon Gold is 100 King Street West, Suite 3400, Toronto, Ontario, M5X 1A4.
Argonaut Convertible Debentures
As a result of the Transaction, holders of Argonaut’s outstanding 4.625% senior unsecured convertible debentures (the “Debentures”) will be entitled to receive Alamos common shares (in lieu of Argonaut common shares), based on the Exchange Ratio, on conversion of the Debentures, in accordance with the terms of the indenture governing the Debentures (the “Indenture”). Alamos and Argonaut have entered into a supplemental indenture with Computershare Trust Company of Canada, as trustee, to, among other things, evidence Alamos’ agreement to issue Alamos common shares to any debenture holder upon conversion of the Debentures.
Within 30 days of completion of the Transaction, Alamos will make an offer to purchase the Debentures as required under the terms of the Indenture.
The Debentures remain listed for trading on the TSX under the symbol “AR.DB.U”.
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