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Wednesday, May 31, 2023
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.


Alamos Gold to acquire Manitou Gold in $17.2M transaction, increases Ontario land package by 267%

The company’s land package near the Island Gold Deposit will grow by 40,000 hectares

Alamos Gold acquires Manitou Gold, increases Ontario land package by 267%
Gold mineralization at the Island Gold Deposit, Ontario, Canada. Photo via Alamos Gold

Alamos Gold Inc. (TSX: AGI) (NYSE: AGI) will expand its land package by 40,000 hectares (ha) after acquiring Manitou Gold Inc. (TSX: MTU) in a transaction valued at $17.2 million.

The Toronto companies announced Tuesday they have entered into a definitive agreement for Alamos to acquire Manitou Gold, its Goudreau Property and all of its issued and outstanding shares.

Acquiring Manitou’s property will increase Alamos’s land package near its Island Gold Mine in northern Ontario by 267 per cent for a total of 55,277 ha.

Alamos already owned 19 per cent of Manitou’s shares prior to the announced acquisition, approximately 65 million of them. Alamos says acquiring Manitou’s property will add significant exploration potential to the Michipicoten Greenstone Belt in the Wawa sub province near Lake Superior, which remains relatively unexplored.

Read more: Calibre Mining broke gold production records with 10% increase in 2022

Read more: Calibre Mining strengthens management team with two new vice presidents

Manitou believes the transaction will benefit its shareholders

Manitou shareholders will be receiving one Alamos share for every 284 shares they hold or 0.003525 of an Alamos share for each Manitou share — representing a value of $0.05 per Manitou share.

Manitou says the transaction will leverage the strong financial position and robust free cash flow of Alamos to further the Goudreau Project without continued equity dilution for those holding Manitou shares.

“Our management team and board of directors view this transaction as beneficial for all Manitou shareholders. It provides immediate value and the opportunity to continue to benefit as part of an established and well financed gold producer,” said Richard Murphy, Director and CEO of Manitou.

The expanded land package will include most of the mineral tenure between the two major mining operations within the Michipicoten Greenstone Belt, namely the Island Gold Mine and Renabie Gold Mine which produced 1.1 million ounces of gold between 1947-1991 and isn’t currently in operation.

“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 CEO of Alamos.

This year’s guidance for the Island Gold Mine indicates that it should produce between 120,000-135,000 ounces of gold with a total cash cost of US$600-$650 per ounce. As of the end of December last year, the mine had 291,000 ounces of measured and indicated mineral resources.

Alamos and O3 Mining Inc. (TSX-V: OIII) (OTCQX: OIIIF) made strategic investments in the Goudreau Project at the end of 2019.

Alamos also recently drilled one of its best holes at the Puerto Del Aire gold deposit adjacent to the Mulatos Mine in Sonora Mexico, intersecting 33.4 g/t Au over 26 metres.

Alamos’s stock price rose by 0.43 per cent today to $13.91 on the Toronto Stock Exchange.

Ontario and Quebec are Canada’s top gold producing provinces

Ontario and Quebec produced 70 per cent of the gold mined in Canada during 2021, according to data from Natural Resources Canada.

The value of Canadian gold exports that year was approximately $21 billion and Canada currently sits at spot #4 on the list of the world’s top gold producers, according to the World Gold Council.

Read more: Calibre Mining increases mineral resources and reserves at its Nicaragua and Nevada operations

Read more: Calibre Mining gold discovery could breathe life into historic mining community

Calibre Mining (TSX: CXB) OTCQX: CXBMF) is another Canadian gold producer with successful large-scale operations.

Calibre produced a record amount of gold last year, up 10 per cent from 2021, and sold 222,991 ounces thanks to its successful Nicaragua operations.

The company has budgeted $29 million for its exploration in Nevada and Nicaragua this year.

Calibre’s stock value rose by 6.54 per cent today to $1.14 on the Toronto Stock Exchange.


Calibre Mining is a sponsor of Mugglehead news coverage 


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