Alamos to acquire Richmont Mines, Monarques to acquire Richmont’s Quebec assets

Alamos Gold Inc. (TSX/NYSE: AGI) and Richmont Mines Inc. (TSX/NYSE: RIC) have entered into a definitive agreement pursuant to which Alamos will acquire all of the issued and outstanding shares of Richmont, further enhancing Alamos’ position as a leading intermediate gold producer.

Under the terms of the Agreement, all of the Richmont issued and outstanding common shares will be exchanged on the basis of 1.385 Alamos common shares for each Richmont common shar. The exchange ratio implies consideration of CDN $14.20 per Richmont common share, based on the closing price of Alamos common shares on the Toronto Stock Exchange (TSX) on September 8, 2017. This represents a 22% premium to Richmont’s closing price and a 32% premium based on both companies’ 20-day volume-weighted average prices, both as at September 8, 2017 on the TSX. This implies a total equity value of approximately US $770 million on a fully diluted in-the-money basis and an enterprise value of US $683 million.

Upon completion of the Transaction, existing Alamos and Richmont shareholders will own approximately 77% and 23% of the pro forma company, respectively.

BMO Capital Markets is acting as financial advisor to Alamos and its board of directors. Torys LLP is acting as Alamos’ legal advisor.

Macquarie Capital Markets Canada Ltd. and Maxit Capital LP are acting as financial advisors to Richmont and its board of directors. Fasken Martineau DuMoulin LLP is acting as Richmont’s legal advisor.

Concurrent with the announcement of the transaction, Richmont has agreed to sell all its Quebec assets, including the Beaufor Mine, the Camflo Mill and the Wasamac development project, to Monarques Gold Corporation (TSX-V: MQR; FSE: MR7). Monarques will retain Richmont’s Quebec-based site teams.

Monarques has completed a subscription receipt offering of $6,525,251 of a maximum of $10,000,000 with investors that include Richmont ($2.0 million), Fonds de solidarité FTQ ($1.0 million) and Probe Metals ($0.6 million).

Richmont will hold a 19.9% interest in the Corporation, inclusive of the $2.0 million investment by Richmont.

photo credit: Richmont Mines

Ted Liu

Ted Liu, M.Sc. (Mining, Queen's), MBA (Finance, Toronto), is the Editor of Private Capital Journal, CanadaMetals.ca, TechWire.ca, and the former Editor of Canadian Private Equity. Ted has been passionately tracking Canadian private capital industry since 1992, having most recently served as Research Director for The Canadian Venture Capital and Private Equity Association (CVCA).

Ted is the architect of CVCA infobase, and is the architect of CPE Media's Financings.ca, Canada's most sophisticated and advanced all private capital and public market financing database.