Two northern Ont. gold mines to merge, creating one of Canada's largest
Two northern Ontario gold mines are planning to become one creating "one of the largest and lowest cost gold mines in Canada" and saving US$515 million over the life of the operations.
Alamos Gold announced its intention to buy Argonaut Gold in a news release Wednesday morning.
Gold from Island Gold mine in Dubreuilville, Ont. (Alamos Gold)
The agreement was unanimously approved by the boards of directors for both companies, the release said, and Argonaut's two largest shareholders have entered into "lock-up agreements."
Both have mining operations in the town of Dubreuilville, located nearly 300 kilometres north of Sault Ste. Marie.
Argonaut's Magino mine is adjacent to Alamos' Island Gold mine.
Map of Magino and Island Gold mines in Dubreuilville. (Alamos Gold)
"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," Alamos said.
"This includes operating synergies of US$375 million, through the use of the larger centralized mill and tailings facility at Magino, and capital savings of US$140 million with the mill and tailings expansions at Island Gold no longer required."
The combined gold production is expected to increase by approximately 25 per cent to more than 600,000 ounces per year with potential to grow further to more than 900,000 ounces per year.
The production increase is expected to come after the Phase 3+ expansion is complete in 2026.
"The two deposits contain mineral reserves of 4.1 million ounces, and total mineral reserves and resources of 11.5 million ounces supporting a mine life of more than 19 years, with significant exploration upside," Alamos said.
Evolution of land position within the Michipicoten Belt, Ontario (Alamos Gold)
Argonaut's U.S. and Mexico assets will be "spun out to its existing shareholders as a newly created junior gold producer SpinCo."
This includes the Florida Canyon mine, the El Castillo Complex, the La Colorada operation and the Cerro del Gallo project.
"Under the terms of the agreement, each Argonaut common share outstanding will be exchanged for 0.0185 Alamos common shares and 1 share of SpinCo," Alamos said.
"With 88 per cent of the combined company’s net asset value supported by its Canadian assets, solidifying Alamos’ position as the 3rd-largest gold producer in Canada."
For the purchase to go through, 66.67 per cent approval during an Argonaut shareholder vote is needed.
Argonaut's two largest shareholders represent a 40 per cent interest and have already entered into lock-up agreements in support of the purchase. Its directors and senior management have also entered into support agreements.
A special meeting is expected to be held in June.
"In addition to shareholder and court approvals, the transaction is subject to applicable regulatory approvals and the satisfaction of certain other closing conditions customary for a transaction of this nature," the news release said.
"Additionally, a break fee in an amount of C$20 million is payable to Alamos by Argonaut in certain circumstances, if the transaction is not completed, and an expense reimbursement fee is payable by Alamos to Argonaut in certain circumstances if the transaction is not completed."
CTVNews.ca Top Stories
Feds 'not interested' in investing in LNG facilities: energy minister
Energy and Natural Resources Minister Jonathan Wilkinson says the federal government is 'not interested' in subsidizing future liquefied natural gas (LNG) projects, including the electrification of projects currently in the works.
Chants of 'shame on you' greet guests arriving for the annual White House correspondents' dinner
An election-year roast of U.S. President Joe Biden before journalists, celebrities and politicians at the annual White House correspondents' dinner Saturday.
Aerial photos show wide devastation left by tornado in China's Guangzhou
Aerial photos posted by Chinese state media on Sunday showed the wide devastation of a part of the southern city of Guangzhou after a tornado swept through the day before, killing five people, injuring dozens others and damaging over a hundred buildings.
Global measles cases nearly doubled in one year, researchers say
The number of measles cases around the world nearly doubled from 2022 to 2023, researchers say, presenting a challenge to efforts to achieve and maintain elimination status in many countries.
Fair share: the right office solution can take finding the right partner
The rise of remote and hybrid work has made it harder to justify a full office, so more are leaning on co-working spaces that they share with many others for convenience and cost savings. The choice, however, comes at the expense of privacy and control.
A top Qatari official urges Israel and Hamas to do more to reach a ceasefire deal
A senior Qatari official has urged both Israel and Hamas to show "more commitment and more seriousness" in ceasefire negotiations in interviews with Israeli media, as pressure builds on both sides to move toward a deal that would set Israeli hostages free and bring potential respite in the nearly seven-month-long war in Gaza.
What Trudeau's podcast appearances say about the Liberals' next ballot box question
Trudeau recently appeared on four podcasts as he travels the country talking up the Liberals' latest budget, which he's pitching as a plan to inject more economic fairness into society for those under 40 — a cohort that has kept Trudeau in power since 2015 but is increasingly turning to Conservative Leader Pierre Poilievre.
Russian drones set a hotel ablaze in a Ukrainian Black Sea city
Russian drones early Sunday struck the Black Sea city of Mykolaiv, setting a hotel ablaze and damaging energy infrastructure, the local Ukrainian governor reported, while ammunition shortages continued to hobble Kyiv's troops in the more than two-year-old war.
A munitions explosion at a Cambodian army base kills 20 soldiers, but its cause is unclear
Security was tight around a military base in southwestern Cambodia on Sunday, a day after a huge explosion there killed 20 soldiers, wounded others and damaged nearby houses.