Central to the acquisition is the Magino mine
The shareholders of Argonaut Gold have approved a special resolution for a takeover by fellow Canadian miner Alamos Gold.
The arrangement resolution received overwhelming approval with 99.58% of shareholders present in person, or represented by proxy, giving their thumbs up.
The companies in March announced that Alamos would buy smaller rival Argonaut in an all-stock deal valued at $325-million. The move is poised to create a gold miner with a combined long-term production potential exceeding 900 000 oz/y.
Central to the transaction is Alamos’ acquisition of Argonaut’s Magino mine, which is strategically located adjacent to its own Island Gold mine, in Ontario.
“Both assets complement each other well with large mineral reserve and resource bases, long mine lives, and existing infrastructure that can support the bright future for the larger combined operation. Together, Island Gold and Magino will create one of the largest and most profitable mines in Canada,” Alamos president and CEO John McCluskey said at the time.
Anticipated synergies from the integration of the two operations are expected to total a substantial $515-million.
Moreover, the addition of Magino to Alamos’ portfolio is projected to significantly ramp up the company’s gold production to more than 600 000 oz/y by 2026.
Simultaneous to the transaction, Argonaut’s assets in the US and Mexico will be spun out to its existing shareholders, forming a newly established junior gold producer. The spin-off will hold key assets, including the Florida Canyon mine, in the US, as well as the El Castillo Complex, the La Colorada operation and the Cerro del Gallo project, in Mexico.
Under the terms of the deal, each Argonaut common share outstanding will be exchanged for 0.0185 Alamos common shares and one share of SpinCo. The exchange ratio implies an estimated total consideration of C$0.40 an Argonaut common share.