Alamos Gold Inc. (TSX:AGI) entered into a definitive agreement to acquire Argonaut Gold Inc. (TSX:AR) for approximately CAD 390 million on March 27, 2024. Under the terms of the Agreement, each Argonaut common share outstanding will be exchanged for 0.0185 Alamos common shares and 1 share of SpinCo2 (the ?Exchange Ratio?). Alamos expects to issue approximately 20.3 million common shares as part of the Transaction, representing an equity value of approximately CAD 375 million on a fully diluted in-the-money basis. As part of the Transaction, Alamos will acquire Argonaut?s Magino mine, located adjacent to its Island Gold mine in Ontario, Canada. The integration of the two operations is expected to create one of the largest and lowest cost gold mines in Canada. Concurrently with the Transaction, Argonaut?s assets in the United States and Mexico will be spun out to its existing shareholders as a newly created junior gold producer (?SpinCo?). SpinCo will own the Florida Canyon mine in the United States, as well as the El Castillo Complex, the La Colorada operation, and the Cerro del Gallo project, located in Mexico. A break fee in an amount of CAD 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. In the event that this Agreement is terminated by Argonaut pursuant to subsection 7.2(c) hereof, Alamos shall pay to Argonaut an aggregate maximum amount of CAD 750,000. In connection with the Transaction, Alamos has agreed to provide Argonaut with a private placement equity financing in the amount of CAD 50 million priced at an 8% discount to Argonaut?s 5-day volume-weighted average share price as of March 26, 2024. The Private Placement Transaction is expected to close in early April 2024. Upon completion of the Transaction, existing Alamos and Argonaut shareholders will own approximately 95% and 5% of the pro forma company, respectively. The proposed Transaction will be completed pursuant to a plan of arrangement completed under the Business Corporations Act (Ontario). The Transaction will require approval by 66 2/3% of the votes cast by the shareholders of Argonaut at a special meeting of Argonaut shareholders expected to be held in June 2024. The directors and members of senior management of Argonaut, as well as Argonaut?s two largest shareholders have entered into support agreements pursuant to which they agreed to vote their shares in favor of the proposed Transaction. 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, as well as TSX and the NYSE shall have conditionally approved the listing thereon. The Agreement has been unanimously approved by the Boards of Directors of Alamos and Argonaut, and Argonaut?s board recommends that their shareholders vote in favor of the Transaction. The closing is expected in July 2024. As of April 4, 2024, Alamos Gold Inc. and and Argonaut Gold Inc. closing of their previously announced non-brokered private placement.

The Board of Directors of Argonaut has received an opinion from Cormark Securities Inc. that based upon and subject to the assumptions, limitations, and qualifications stated, the consideration to be received by Argonaut shareholders pursuant to the Transaction is fair, from a financial point of view, to Argonaut shareholders. CIBC Capital Markets is acting as financial advisor to Alamos and its Board of Directors. Kevin Morris and Braden Jebson of Torys LLP are acting as Alamos' legal advisors. Scotiabank is acting as financial advisor to Argonaut and its Board of Directors. Sander Grieve of Bennett Jones LLP is acting as Argonaut?s legal advisor. HBH Strategic Advisors acted as counsel to Argonaut?s Special Committee.