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Alamos ready to close Dubreuilville mine acquisition deal

Court approval on July 5 will combine two gold mining operations
Drilling in the Magino Mine pit (Argonaut Gold photo)

Argonaut Gold shareholders have approved the merger with Alamos Gold, clearing the way for the consolidation of two gold mining operations in the Dubreuilville area of northeastern Ontario.

In a news release, Toronto’s Argonaut Gold said an overwhelming 99.58 per cent of its shareholders approved the merger at a special shareholders meeting on June 28. Alampos is acquiring all of the issued and outstanding shares of Argonaut.

The two Toronto companies entered into a definitive agreement on March 27 whereby Alamos would acquire all of the issued and outstanding shares of Argonaut in an all-share transaction valued at US$325 million. Alamos and Argonaut shareholders will own approximately 95 per cent and 5 per cent of this combined company, respectively.

Alamos’ target in this deal was Argonaut’s Magino Mine, which entered commercial production last November.

The two companies are next-door neighbours in the Michipicoten gold belt. Alamos’ underground Island Gold and Argonaut’s open-pit Magino Mine are about 300 metres apart. Alamos sees great synergies and cost savings with the acquisition by having access to Argonaut’s newer processing mill and in the exploration upside, at depth, at Magino.

The deal is expected to become official on July 5, pending a final approval order by the Ontario Superior Court of Justice. Argonaut shares will then be delisted from the TSX.

Magino was considered Argonaut’s flagship asset. 

The rest of Argonaut’s mine asset in Mexico and the Florida Canyon mine in the U.S. will be spun off into a separate subsidiary company, which could be sold off, though no agreements have been reached to date.