Alamos Gold Inc. [AGI-TSX, NYSE] has agreed to acquire all the shares of Orford Mining Corp. [ORM-TSXV] that it doesn’t already own by way of a plan of arrangement deal that is valued at $24 million (on a 100% basis) or 10 cents per Orford share.
Under the terms of the deal, Orford shareholders will receive 0.005588 of an Alamos common share for each Orford share held. The transaction value is calculated based on the 20-day volume weighted average trading price of Alamos shares on the Toronto Stock Exchange for the period ending on January 12, 2024. The transaction is non-arms-length as Alamos currently owns 61.6 million Orford shares, representing a 27.5% interest.
Alamos expects to issue 0.9 million shares for a total consideration of $16 million.
The acquisition will consolidate Alamos’s existing ownership of Orford shares through which the company will add the highly prospective Quqavik Gold Project in Quebec. 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.
“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,’’ said Alamos President and CEO John A. McCluskey. Qiqavik fits that strategy perfectly as an attractive early-stage gold project, located in one of the top mining jurisdictions in the world,’’ he said.
“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.’’
All directors and senior officers of Orford have entered into support and voting agreements under which they have pledged to vote their shares in favour of the transaction.
Alamos is an intermediate gold producer with diversified production from three operating gold mines in North America, including Young – Davidson and Island gold mines in northern Ontario, and the Mulatos gold mine in Sonora, Mexico.
Orford was in the news last year, when it identified over 50 high priority targets with lithium pegmatite potential on exploration properties in Nunavik, Quebec.
The announcement came after Orford said it has raised $1.92 million, marking the first tranche of a previously announced $6.2 million non-brokered private placement. The company said Alamos Gold participated in the financing in bid to maintain its interest in Orford.
Orford shares advanced on the news rising 100% or $0.045 to $0.09 on volume of 390,300. The shares previously traded in a 52-week range of 26 cents and $0.035.
In advance of its summer lithium exploration program beginning in early July, 2023, Orford said it had used available geochemical data, rock mapping and its recent multispectral remote sensing data analysis to identify over 50 high priority target areas that show compelling indicators of lithium bearing pegmatites.