Prodigy Gold to merge with Argonaut Gold

16 October 2012 (Last Updated October 16th, 2012 18:30)

Canada's Argonaut Gold has signed an agreement to acquire Prodigy in a friendly takeover worth C$277m ($282m).

Magino project

Canada's Argonaut Gold has signed an agreement to acquire Prodigy in a friendly takeover worth C$277m ($282m).

Argonaut Gold will purchase all common shares in Prodigy for C$0.00001 in cash for each share, representing C$1.08 ($1.01) a share.

Prodigy shareholders will also receive 0.1042 of an Argonaut Gold share, following which recipients will own a combined 22% in Argonaut.

On completion of the transaction, Argonaut Gold will own the open pit Magino gold project in Ontario.

The project comprises an indicated resource of over 6 million ounces (223 million tonnes) at 0.87 g/t and is projected to generate 300,000oz-500,000oz of gold annually.

Argonaut Gold president and CEO Pete Dougherty said: "The Magino resource provides substantial flexibility for maximizing value creation using a higher grade cut-off.

"Argonaut Gold will own the open pit Magino gold project in Ontario."

"This transaction is both highly attractive to Prodigy shareholders as well as significantly accretive to Argonaut Gold shareholders on all key financial and operational metrics," Dougherty added.

Prodigy president and CEO Brian Maher commented on the acquisition: "We believe the price offered by Argonaut Gold is highly attractive for our shareholders, and that in addition to the premium our shareholders receive today, our shareholders now have the opportunity to participate in a company that has current production exposure and can both finance and develop Magino."


Image: Argonaut Gold will develop the Magino gold project, located in Ontario. Photo: courtesy of Prodigy Gold Incorporated.