Alamos is a Canadian-based intermediate gold producer with diversified production from three operating mines in North America
Alamos acquires Manitou Gold. (Credit: Herbert Aust from Pixabay)
Alamos Gold Inc. (TSX:AGI; NYSE:AGI) (“Alamos” or the “Company”) is pleased to announce that it has entered into a definitive agreement (the “Agreement”) pursuant to which Alamos will acquire all of the issued and outstanding shares of Manitou Gold Inc. (TSX:MTU) (“Manitou”) by way of a court-approved plan of arrangement (the “Transaction”). The acquisition will consolidate Alamos’ existing ownership of Manitou shares and increase its regional land package around Island Gold with the addition of the Goudreau Property. This includes 40,000 hectares (“ha”) adjacent to and along strike from the Island Gold Mine, adding significant exploration potential across the relatively underexplored Michipicoten Greenstone Belt (see Figure 1). This is expected to increase Alamos’ land package around the Island Gold Deposit to 55,277 ha, a 267% increase.
The acquisition extends Alamos’ mineral tenure along strike to the east within the Goudreau Lake Deformation Zone, a primary control on gold mineralization within the Goudreau-Lochalsh segment of the Michipicoten Greenstone Belt. The expanded land package will now include the majority of the mineral tenure between the only two major mines within the belt – the Island Gold Mine and the past producing Renabie Gold Mine (aggregate production of 1.1 million ounces of gold from 1947-1991). The Goudreau Property also adds six additional belt-scale deformation zones hosting several gold occurrences, including Cradle Lake-Emily Bay, Loch Lomond, Missinaibi, Baltimore, Easy Lake and Renabie Deformation Zones.
Alamos has developed a systematic district-scale targeting and exploration approach for the area surrounding the Island Gold Mine. This approach can now be applied to the larger consolidated land package to rapidly generate and test new exploration targets.
Under the terms of the Agreement, Manitou shareholders will receive 0.003525 of an Alamos common share for each Manitou share, representing a value of C$0.05 per Manitou share, calculated based on the 20-day volume weighted average trading price of Alamos’ shares on the Toronto Stock Exchange immediately preceding February 28, 2023. This represents a premium of 95% based on Alamos’ and Manitou’s respective closing prices on February 27, 2023 and 88% premium to Manitou’s 20-day volume-weighted average price. Alamos currently owns 65.2 million Manitou shares, representing approximately 19% of Manitou’s basic common shares outstanding. Excluding Alamos’ existing ownership of Manitou, Alamos expects to issue approximately 1.0 million shares for total consideration of C$14 million.
The terms and conditions of the Agreement will also be disclosed in more detail in the Manitou management information circular. Completion of the Transaction is subject to customary conditions, including court approvals, a favourable vote of (i) a majority of the Manitou common shares voted at a special meeting of Manitou shareholders, other than shares held by Alamos and any other interested parties in the transaction; and (ii) at least 66 2/3% of the holders of Manitou common shares voted at a special meeting of shareholders, and the receipt of all necessary regulatory and stock exchange approvals. The Agreement includes a customary non-solicitation clause and right to match covenants.
Alamos’ Board of Directors has unanimously approved the Transaction. Torys LLP is acting as legal counsel for Alamos. Hillcrest Merchant Partners is acting as exclusive financial advisor to Manitou, and Fogler, Rubinoff LLP is acting as legal advisor to Manitou in connection with the transaction.
“Since our acquisition of Island Gold in 2017, much of our focus has been on near mine drilling where we have had tremendous success discovering more than four million ounces of high-grade Mineral Reserves and Resources. Through our acquisition of Manitou, we are more than tripling our land package along strike from Island Gold where we see excellent potential for additional high-grade discoveries across the prospective Michipicoten Greenstone Belt,” said John A. McCluskey, President and Chief Executive Officer.
Source: Company Press Release