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Alamos Gold announces acquisition of Argonaut Gold


Published by
Global Mining Review,

Alamos Gold Inc. and Argonaut Gold Inc. have announced that they have entered into a definitive agreement whereby Alamos will acquire all of the issued and outstanding shares of Argonaut pursuant to a court approved plan of arrangement.

As part of the Transaction, Alamos will acquire Argonaut’s Magino mine, located adjacent to its Island Gold mine in Ontario, Canada. The integration of the two operations is expected to create one of the largest and lowest cost gold mines in Canada. Through the use of shared infrastructure, Alamos expects to unlock significant value with immediate and long-term synergies expected to total approximately US$515 million. The addition of Magino is expected to increase Alamos’ combined gold production to over 600 000 oz per year, with longer term production potential of over 900 000 oz per year. The combination materially enhances Alamos’ position as a leading, Canadian focused, intermediate producer, with growing production and declining costs. Concurrently with the Transaction, Argonaut’s assets in the US and Mexico will be spun out to its existing shareholders as a newly created junior gold producer (SpinCo). SpinCo will own the Florida Canyon mine in the US, as well as the El Castillo Complex, the La Colorada operation, and the Cerro del Gallo project, located in Mexico.

“This is a logical and attractive transaction for both companies. The combination of the adjacent Island Gold and Magino mines will immediately unlock tremendous value, with significant longer-term upside through further optimisations of the combined operation, and ongoing exploration success. 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, further enhancing our leading position as a Canadian focused intermediate gold producer,” stated John A. McCluskey, President and CEO of Alamos Gold.

“After considering a broad range of alternatives, we believe this Transaction provides a unique opportunity to place Magino in the hands of a well-capitalised and well-run company, who will be able to realise significant synergies given the proximity of the adjacent Island Gold Mine. We believe with adequate capital and an optimal expansion at Magino, the mine will deliver significant value to all stakeholders. We are grateful to our team at Magino for their significant contribution and hard work during mine and mill ramp-up. Similarly, we thank our exceptional teams in Mexico and Nevada for their continued hard work throughout the years,” added Richard Young, President and CEO of Argonaut Gold.


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