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A new mining boss at Island Gold

Shareholders approve Alamos acquisition of Richmont Mines
Richmont Mines Island Gold
Richmont MInes' Island Gold mine, northeast of Wawa.

It looks like a done deal.

Alamos Gold and Richmont Mines jointly announced that shareholders of both companies have overwhelmingly voted in favour of the acquisition at the respective special meetings, Nov. 16.

Alamos will acquire all of the issued and outstanding shares of Richmont.

The deal was approved by 98.46 per cent of votes cast by Alamos shareholders and 92.56 per cent of votes cast by Richmont shareholders. 

The transaction officially closes Nov. 23 and is subject to the usual regulatory approvals.

The acquisition gives Alamos two producing mines in northeastern Ontario about a six-hour drive from each other.

The friendly acquisition, a $933-million all-stock deal, was first announced Sept.11.

The target for Alamos was Richmont’s Island Gold Mine, near Wawa, where an expansion into a new high-grade gold extension to the east and at depth is underway. It’s considered a high-grade, low-cost producer with plenty of upside to add ounces over the next few years.

Island Gold is located 83 kilometres northeast of Wawa and 15 kilometres from Dubreuilville.

Commercial production began in October 2007 with 430,000 ounces produced in the decade since.

Alamos is a Toronto mid-tier gold miner with operations in Canada, U.S., Mexico, and Turkey. It operates the Young Davidson mine near Matachewan. 

In early November, Richmont posted net earnings of $4.8 million in its third-quarter results and marked record production of 26,659 ounces of gold at Island Gold, and 76,541 ounces of gold over the first nine months of this year. It positions the mine to exceed the high end of annual production guidance of between 87,000 and 93,000 ounces.

"With the acquisition of Richmont we are strengthening our asset base and profitability,” said Alamos president-CEO John McCluskey in a news release. 

“We are very pleased with the strong support for the transaction and expect to create significant value for shareholders as we deliver on the expansion at Island Gold and continue to unlock its exploration potential.”

Renaud Adams, Richmont’s president-CEO, was equally enthused.

"This strategic transaction delivers on our commitment to create long-term sustainable value as our shareholders will benefit from having meaningful ownership in a diversified intermediate producer with a portfolio of high-quality assets and a proven and experienced management team while maintaining exposure to the significant potential of the Island Gold Mine.”