Alamos Gold Announces Acquisition of Orford Mining Including the Qiqavik Gold Project
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Insights
The acquisition of Orford Mining Corporation by Alamos Gold Inc. represents a strategic move to expand Alamos' portfolio of gold and critical mineral projects. The transaction, valued at C$16 million, will result in the issuance of approximately 0.9 million new Alamos shares, reflecting a modest dilution for current shareholders. The valuation of Orford at C$0.10 per share, based on a 20-day volume weighted average, appears to be a calculated investment considering the long-term potential of the assets involved, particularly the Qiqavik Gold Project.
From a financial perspective, the deal's impact on Alamos' balance sheet and earnings will depend on the exploration success and subsequent development of the acquired properties. Investors should monitor the progress of exploration and potential resource estimates as these will be key drivers of the acquisition's value creation. The strategic nature of this acquisition suggests a positive outlook for Alamos' growth trajectory, provided the projects deliver on their geological promise.
The Qiqavik Gold Project, with its location in the mining-friendly jurisdiction of Quebec and the potential for multiple significant new greenfield discoveries, is poised to be a cornerstone asset for Alamos. The project's early-stage exploration results have already identified over 40 highly prospective targets, which is notable for a previously underexplored property. The geological characteristics of the Cape Smith Belt, likened to other significant gold belts globally, further underscore the potential for high-grade gold occurrences.
For the West Raglan and Joutel Properties, the partnerships and option agreements in place, such as with Wyloo Metals, are crucial for mitigating exploration risks and funding. The earn-in milestones achieved by Wyloo at West Raglan indicate confidence in the project's prospects. The Joutel Eagle Property's proximity to past-producing operations adds to its attractiveness, considering the historical gold production in the region.
The inclusion of critical mineral projects, particularly those with Lithium-Cesium-Tantalum (LCT) bearing pegmatites, aligns with the increasing demand for battery metals and diversifies Alamos' portfolio beyond gold. This is a strategic hedge against gold price volatility and positions Alamos in the burgeoning market for electric vehicle and energy storage materials.
The geological significance of the acquisition lies in the diversity and prospective nature of the assets. The Qiqavik Break, a major crustal-scale structure, is a key geological feature that controls the gold mineralization in the Qiqavik Gold Project. The identification of a gold geochemical dispersal train suggests the presence of mineralization that has yet to be drill tested, highlighting the exploration upside.
The West Raglan property's nickel, copper, platinum group elements (PGE) and cobalt (Co) mineralization, hosted in ultramafic units of the Lac Esker Suite, are particularly noteworthy. These units are analogous to those hosting significant nickel sulphide mineralization elsewhere in the Cape Smith Belt, indicating the potential for similar discoveries on the property.
For the Nunavik Lithium properties, the discovery of Lithium-Cesium-Tantalum (LCT) bearing pegmatites is significant, as these are sought after for their use in high-tech applications, including electric vehicles and electronics. The identification of new exploration targets based on till geochemical results is an encouraging sign for the potential of these properties.
TORONTO, Jan. 15, 2024 (GLOBE NEWSWIRE) -- 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 Orford Mining Corporation (TSXV:ORM) (“Orford”) by way of a court-approved plan of arrangement (the “Transaction”). The acquisition will consolidate Alamos’ existing ownership of Orford shares through which the Company will add the highly prospective Qiqavik Gold Project, located in Quebec, Canada. Alamos will also be acquiring interests in several exploration stage critical mineral and gold projects in Quebec, including West Raglan, the Joutel Properties, and Nunavik Lithium.
Under the terms of the Agreement, Orford shareholders will receive 0.005588 of an Alamos common share for each Orford share. This represents a value of C
“Our acquisition of Orford is consistent with our strategy of building out a pipeline of high-quality, long-term projects, in good jurisdictions, to complement our near-term organic growth projects in Canada. Qiqavik fits that strategy perfectly as an attractive early-stage gold project, located in one of top mining jurisdictions in the world. We see excellent long-term potential within the underexplored Qiqavik district and look forward to building off Orford’s success with a larger and sustained exploration program,” said John A. McCluskey, President and Chief Executive Officer.
Qiqavik Gold Project
The
Orford commenced exploration on the project in 2016, and since that time has identified over 40 highly prospective targets across the previously underexplored property through mapping, prospecting, till sampling, geophysics, and limited drilling.
These targets include several high-grade boulder and gold grain-in-till trends, as well as outcrop gold showings across the property. In addition, a significant 4 km wide by 3 km long gold geochemical dispersal train has been identified in till down-ice (NE) from a segment of the Qiqavik break, or a related secondary structure, in the central portion of the Qiqavik project area which has not yet been drill tested.
The Cape Smith Belt is Paleoproterozoic (1.8-1.9 billion years in age), which is consistent with, and has undergone similar geological/tectonic evolution as other significant gold belts globally including the Trans-Hudson in Canada, the Ashanti Gold Fields in West Africa, the Tapajos-Parima Belt in Brazil, and the Tanami Region in Australia.
As supported by the exploration completed to date, and given the scale of the property, Qiqavik has the potential for multiple significant new greenfield discoveries.
West Raglan
The West Raglan Property is currently under an Option agreement with Wyloo Metals Pty. Ltd., whereby Wyloo can earn up to up to
The West Raglan property is a large 646 km2 property situated in the Cape Smith Belt in the Nunavik Region of Northern Quebec. West Raglan Ni, Cu, PGE, Co mineralization is hosted in the ultramafic units of the Lac Esker Suite (1.89-1.87 Ga). These ultramafic units host all known nickel sulphide mineralization in the Cape Smith Belt, including Glencore's Raglan mine (North Trend) and Canadian Royalties’ Nunavik Nickel mine (South Trend). The West Raglan property covers a 50-km strike of both the "North" trend, that hosts Raglan- style deposits, and the "South" Trend, that hosts Canadian Royalties-style deposits.
Joutel Properties, Abitibi Quebec
Joutel Eagle is located along the historical Eagle-Telbel Mine Trend in the Abitibi Greenstone belt. Orford can earn
Nunavik Lithium
The
Prior to the execution of the Arrangement Agreement, Alamos owned 61,660,902 common shares and 6,260,075 common share purchase warrants of Orford, representing a securityholding percentage of approximately
This news release is being issued under the early warning reporting provisions of applicable securities laws. An early warning report with additional information in respect of the foregoing matters will be filed and made available under the SEDAR+ profile of Orford at www.sedarplus.ca. To obtain a copy of the early warning report, you may also contact Nils F. Engelstad, Senior Vice President, General Counsel of Alamos Gold Inc. at (416) 368-9932 ext. 5407. Alamos’ address is Brookfield Place, 181 Bay Street, Suite 3910, Toronto, Ontario, Canada, M5J 2T3.
Qualified Persons
Chris Bostwick, FAusIMM, Alamos Gold’s Senior Vice President, Technical Services, has reviewed and approved the scientific and technical information contained in this news release. Chris Bostwick is a Qualified Person within the meaning of Canadian Securities Administrator’s National Instrument 43-101.
About Alamos
Alamos is a Canadian-based intermediate gold producer with diversified production from three operating mines in North America. This includes the Young-Davidson and Island Gold mines in northern Ontario, Canada and the Mulatos mine in Sonora State, Mexico. Additionally, the Company has a strong portfolio of growth projects, including the Phase 3+ Expansion at Island Gold, and the Lynn Lake project in Manitoba, Canada. Alamos employs more than 1,900 people and is committed to the highest standards of sustainable development. The Company’s shares are traded on the TSX and NYSE under the symbol “AGI”.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Scott K. Parsons
Senior Vice President, Investor Relations
(416) 368-9932 x 5439
All amounts are in United States dollars, unless otherwise stated.
The TSX and NYSE have not reviewed and do not accept responsibility for the adequacy or accuracy of this release.
Cautionary Note
This news release contains or incorporates by reference “forward looking statements” and “forward-looking information” as defined under applicable Canadian and U.S. securities legislation. All statements, other than statements of historical fact, which address events, results, outcomes or developments that Alamos expects to occur are, or may be deemed to be, forward-looking statements. Forward-looking statements are generally, but not always, identified by the use of forward-looking terminology such as “expect”, “assume”, “anticipate”, “believe”, “potential”, “intend”, “prospective” or variations of such words and phrases and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved or the negative connotation of such terms.
Forward-looking statements in this news release include, but may not be limited to, information pertaining to the expected receipt of approvals required for the Transaction; expected completion of the acquisition of Orford by Alamos; the prospective Qiqavik Gold Project, exploration potential and programs and other statements that express management’s expectations or estimates of future plans and performance, operational, geological or financial results, estimates of amounts not yet determinable and assumptions of management.
Alamos cautions that forward-looking statements are necessarily based upon a number of factors and assumptions that, while considered reasonable by Alamos at the time of making such statements, are inherently subject to significant business, economic, technical, legal, political and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements and undue reliance should not be placed on such statements and information. Investors are cautioned not to assume that all or any part of additional mineral deposits that may be acquired are, or will be, economically or legally mineable or that they will ever be converted into Proven and Probable Mineral Reserves (as that term is defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects and the Canadian Institute of Mining, Metallurgy and Petroleum – CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended).
Risk factors that may affect Alamos’ ability to achieve the expectations set forth in the forward-looking statements contained in this news release include, but are not limited to, not receiving the requisite approvals for completion of the Transaction and the actual results of potential exploration activities.
For a more detailed discussion of other risk factors that may affect Alamos’ ability to achieve the expectations set forth in the forward-looking statements in this news release, see Alamos’ latest 40-F/Annual Information Form and Management’s Discussion and Analysis, each under the heading “Risk Factors”, available on the SEDAR+ website at www.sedarplus.ca or on EDGAR at www.sec.gov. The foregoing should be reviewed in conjunction with the information and risk factors and assumptions found in this news release.
Alamos disclaims any intention or obligation to update or revise any forward-looking statements, whether written or oral, or whether as a result of new information, future events or otherwise, except as required by applicable law.
Figure 1: Orford Mining Project Locations
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/804f771d-051d-4939-ab5c-5237babdd0e8
FAQ
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