Argonaut Gold and Alio Gold have entered into a definitive agreement for an at-market merger whereby Argonaut will acquire all of the issued and outstanding shares of Alio.
Argonaut is a Canadian company whose primary assets are the El Castillo and San Agustin mines, which together form the El Castillo Complex in Durango, Mexico, and the La Colorada mine in Sonora, Mexico. Advanced exploration projects include the Cerro del Gallo project in Guanajuato, Mexico, and the Magino project in Ontario, Canada.
Alio is also a Canadian company, whose cornerstone asset is its Florida Canyon mine in Pershing county, northern Nevada, United States. The company also owns the development stage Ana Paula project in Guerrero, Mexico.
Production from the merged company’s four producing mines is forecast at more than 235,000 gold equivalent ounces per year (oz/y).
Upon completion of the transaction, existing Argonaut and Alio shareholders will own approximately 76% and 24% of the pro forma company, respectively.
Argonaut President and CEO Pete Dougherty said, “This is a transaction that makes sense for both sets of shareholders. Combining complementary assets into one larger, more relevant company generates significant synergies.
“With a solid production base of over 235,000 gold equivalent oz expected this year, a strong balance sheet, and strong cash flow generation at current gold prices, we will be well positioned to evaluate and execute on growth opportunities from within the combined company’s development asset portfolio,” Dougherty said.