New Management Circular to Learn From Today Argonaut Gold released the management circular regarding being aquired by Alamos. I always find it interesting to read the section "Background to the Arranagement". It gives us a chance to really see all the work that goes on behind the scenes to get a deal across the finish line. It's important to note that this was NOT a great deak for Argonaut shareholders, as Argonaut was in bad shape financially, and NEEDED to get a deal done or they'd run out of money. Luckily LME has a stong cash position and does NOT need to rush a deal. LME can take the time to get the right deal done for shareholders.
Below is the entire Background of the Arrangement section of the information circular from the Argonaut deal. It's super long and I don't expect folks to read it all....BUT for anyone wondering what special committees and financial advisors do, it gives you the full play by play. At one point, Alamos had submited a non-binding offer, but then withdrew it!
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Background to the Arrangement
The Argonaut Board has always had great confidence in the potential of the Magino mine. It still does.
However, the advent of the COVID-19 pandemic and the consequences of the timing of the war in Ukraine have had dramatic negative impacts on the timing and construction costs of the Magino mine, the ramp up of production from the Magino mine and the costs of debt financing incurred in connection with construction. These factors, together with increases in construction costs to C$980 million and recent construction delays, have hampered the results to date from the Magino mine and required Argonaut to undergo multiple financing raises of various types.
Since the construction decision for Magino was made on October 14, 2020, Argonaut has repeatedly disclosed the need for financing or strategic alternatives for the ongoing development of the Magino mine. Over this period, Argonaut has raised over US$700 million to support the construction and increasing costs of the Magino mine by way of: (i) equity financing of an aggregate of US$312 million, inclusive of US$91.5 million in flow through financing; (ii) US$82 million in streaming financing; (iii) a convertible debenture financing of US$57.5 million; and (iv) a term and revolver debt facility in the amount of US$250 million (of which US$230 million has been drawn). Argonaut has also obtained multiple waivers of certain financial covenants on the US$250 million Argonaut Loan Facilities beginning on January 18, 2023 with successive waivers now extending through June 28, 2024.
On December 4, 2023 in its news release announcing the closing of a C$80 million bought deal offering, Argonaut also announced that it would be pursuing a refinancing of its existing debt facility to better match its growth opportunities as the Corporation considered production optimization initiatives at its Florida Canyon and Magino mines. At its regularly scheduled board meetings on January 11 and 30, 2024, the Argonaut Board received updates on the refinancing plans of the Corporation. The Argonaut Board discussed the importance of keeping all options open to ensure a strong financial future for the Corporation. The Argonaut Board discussed the operational and financial challenges facing Argonaut and decided to retain financial advisors to assist the Argonaut Board in determining and assessing the options for a refinancing, a sale of the Corporation or a strategic business combination.
On February 2, 2024, Richard Young, the Chief Executive Officer of Argonaut, had discussions with representatives from Scotiabank, proposing that Scotiabank advise the Argonaut Board regarding strategic options. Scotiabank had been retained on prior occasions to provide Argonaut with financial advisory services.
On February 15, 2024, James Kofman, Chairman of the Argonaut Board, had lunch in Toronto with John McCluskey, Chief Executive Officer of Alamos. Mr. McCluskey indicated that if Argonaut opened a data room and provided diligence access, Alamos could move quickly to determine if a strategic combination was possible. Given pending decisions for Alamos regarding the construction of a new mill at its adjacent Island Gold mine property, Mr. McCluskey emphasized the importance of reaching a decision before Alamos made purchasing decisions regarding the new mill.
On February 16, 2024, Argonaut and Alamos entered into a confidentiality agreement providing for the disclosure of Argonaut confidential and proprietary information to Alamos.
Argonaut had previously established a virtual data room to provide access to Argonaut's confidential and proprietary information to parties considering participating in a refinancing of Argonaut debt. On February 17, 2024, Argonaut extended access to the virtual data room to parties considering an acquisition of Argonaut or other form of strategic transaction involving the Magino mine, provided those parties entered into confidentiality agreements with Argonaut. In addition to three separate refinancing parties already conducting due diligence in the Argonaut data room, seven additional corporate entities entered into confidentiality agreements and were provided data room access.
On February 21, 2024, a senior precious metals royalty and streaming company ("Refinancing Party 1") delivered a non-binding proposal to Argonaut proposing a gold stream and a term loan. The proposal had an expiry date of March 1, 2024.
On February 23, 2024, at a regular board meeting to review 2024 guidance and other matters, Mr. Young reviewed a presentation of Cutfield, Freeman & Co., mining finance advisors, in respect of refinancing proposals for Argonaut from three parties (including refinancing proposals from two other parties, "Refinancing Party 2" and "Refinancing Party 3", in addition to the proposal received from Refinancing Party 1).
The Argonaut Board formally approved the engagement of Scotiabank as financial advisor to the Argonaut Board and Cormark Securities Inc. as financial advisor to Argonaut. Mr. Kofman, a Vice Chairman of Cormark, recused himself from the vote in respect of the retainment of Cormark.
The Argonaut Board also proposed the establishment of a special committee of independent directors to supervise the review of refinancing and strategic alternatives and make recommendations relating thereto to the Argonaut Board.
On February 24, 2024, Alamos delivered a conditional, non-binding expression of interest to the Argonaut Board proposing a business combination of Argonaut and Alamos for an exchange ratio of Alamos Shares per Argonaut Share representing an implied consideration of C$0.48 per Argonaut Share. The expression of interest proposed for the parties to enter into exclusive negotiations until March 25, 2024.
On February 26, 2024, Argonaut released its 2024 guidance and provided an operational update. The operational update indicated that the Magino mine site was experiencing higher dilution rates than previously anticipated due to challenges with selectively mining the high-grade portions of the ore body. The release indicated that the average grade was expected to be 5-10% lower than that indicated in the technical report titled "Magino Gold Project, Ontario, Canada, NI 43-101 Technical Report, Mineral Resource and Mineral Reserve Update", dated effective as of February 14, 2022. In the same release, the Corporation announced that it was anticipating a refinancing of its current Argonaut Loan Facilities by the end of the first quarter in order to provide sufficient liquidity during its ongoing ramp-up phase and to support future growth objectives.
The closing price of Argonaut Shares fell from CAD$0.36 on February 23, 2024, the last trading day before February 26, 2024, to CAD$0.24 on February 26, 2024. Following the movement in the share price of Argonaut, Mr. McCluskey withdrew Alamos's expression of interest in a telephone call to Mr. Kofman on February 26, 2024.
By resolution dated February 28, 2024, the Argonaut Board formally established a Special Committee comprised of Mr. Atkinson, Mr. Kofman, Ms. Rogers and Ms. Walsh to supervise the review of refinancing and strategic alternatives and to make recommendations relating thereto to the Argonaut Board.
On February 28, 2024, the Special Committee held its first meeting. At that meeting, Ms. Rogers was appointed Chair of the Special Committee. The Special Committee appointed Clay Horner of HBH Strategic Advisors as Counsel to the Special Committee.
The financial advisors made presentations to the Special Committee on the interest received to date by strategic parties and assessed the potential financial and strategic merits of strategic transactions for Argonaut, including a sale of a stake in Magino, a full sale of Magino and a sale of Argonaut for cash or stock. The financial advisors also assessed the potential financial and strategic merits of a standalone plan with a refinancing. The financial advisors reviewed various financial projections prepared by Argonaut management, sensitivities thereto, and a preliminary financial analysis regarding the Corporation.
The financial advisors assessed the three refinancing proposals received to date and considered certain risks and issues associated with the refinancing proposals. The financial advisors concluded that the proposals from Refinancing Parties 2 and 3 were higher cost of capital alternatives, dilutive to Argonaut Shareholders and inadequate to meet the longer-term financing needs of Argonaut. The Special Committee decided to seek improvements in the proposal of Refinancing Party 1.
Representatives of Argonaut met with representatives of Alamos on March 1, 2024 to discuss technical due diligence matters.
On March 2, 2024, Refinancing Party 1 delivered a revised proposal to Argonaut improving some elements of its first proposal.
The Special Committee met on March 5, 2024 to receive an update from Scotiabank in respect of the virtual due diligence activities by the strategic parties, and Cormark's review of the revised proposal from Refinancing Party 1. The financial advisors considered certain issues and risks associated with the proposal from Refinancing Party 1 and advised that the March 2, 2024 proposal remained a likely deterrent to concluding a potential strategic business combination or sale in the future, and still did not represent a long-term financing solution. It was agreed that Scotiabank would provide potential strategic parties that had executed a confidentiality agreement with instructions for submitting strategic proposals by March 27, 2024.
On March 6, 2024, Argonaut released its 2023 fourth quarter and full-year financial results.
On March 8, 2024, Refinancing Party 1 delivered a further revised proposal to Argonaut improving some elements of its most recent proposal. That revised proposal was open for acceptance until March 15, 2024.
On March 12, 2024, Refinancing Party 1 delivered a further revised proposal to Argonaut improving some elements of its most recent proposal. That revised proposal remained open for acceptance until March 15, 2024.
Representatives of Alamos made a site visit to Magino on March 13 and 14, 2024.
On March 13, 2024, Refinancing Party 1 agreed to extend the date for acceptance of its revised proposal from March 15, 2024 to March 19, 2024, in exchange for a fee of C$2 million and an agreement by Argonaut to pay the out-ofpocket legal expenses of Refinancing Party 1 (associated with drafting of definitive financing agreements to achieve a refinancing closing target of end of the first quarter) if Argonaut did not elect to proceed with the transaction.
On March 14, 2024, the Special Committee met with Mr. Horner and representatives of Scotiabank and Cormark to receive an update from Cormark and Scotiabank in respect of the potential strategic alternatives and refinancing process and to consider the related issues and risks associated with each proposal. The financial advisors also provided comparisons to precedent transactions and the Corporation's standalone prospects. Given Alamos's ongoing diligence activities, and in order to provide time to consider the best available refinancing and strategic alternative option, the Special Committee approved an extension of the Refinancing Party 1 proposal to March 19, 2024 in accordance with the terms described above.
On the evening of March 14, 2024, Mr. McCluskey advised Scotiabank by e-mail that an arrangement proposal from Alamos would be provided on March 18, 2024.
On March 15, 2024, the Special Committee met and decided to propose a technical discussion between representatives of Argonaut and representatives of Alamos in respect of certain technical matters relating to the Magino mine. That discussion was subsequently held on March 16, 2024 through a virtual meeting.
On March 16, 2024, representatives of GMT Capital Corp. and Libra Advisors, LLC, the two largest Argonaut Shareholders, with aggregate holdings of approximately 442.8 million Argonaut Shares, representing ownership of approximately 40.5% of Argonaut Shares on such date, requested that the Special Committee facilitate a virtual meeting with Scotiabank and Cormark to review the financial advisors' presentations to the Special Committee.
On March 16, 2024, members of the Special Committee discussed and supported that meeting, subject to GMT Capital Corp. and Libra Advisors, LLC entering into confidentiality and trading standstill agreements. On March 16 and 17, 2024, the terms of those agreements were negotiated with representatives of GMT Capital Corp. and Libra Advisors, LLC by Mr. Horner and by Bennett Jones, corporate counsel to Argonaut. Those agreements were executed and GMT Capital Corp. and Libra Advisors, LLC were provided with the most recent presentations that the financial advisors had provided to the Special Committee. A virtual discussion was held on March 17, 2024 in the afternoon. Mr. Horner began the meeting by stating that the financial advisors would review the presentations and only answer questions about those presentations. The meeting proceeded on that basis.
On March 17, 2024, Alamos delivered a revised non-binding proposal (the "Revised Proposal") to Argonaut providing for a business combination by plan of arrangement between Argonaut and Alamos under which each Argonaut share would be exchanged in an arrangement for 0.0174 of an Alamos share and a share of a newly formed public corporation ("SpinCo"). SpinCo would hold the non-Magino assets and liabilities of Argonaut, including Florida Canyon and the Mexican assets. Alamos would subscribe for US$10 million of SpinCo Shares for a 19.99% interest in SpinCo. Alamos would also provide interim financing to Argonaut following shortly after execution of the arrangement documentation through a C$30 million private placement priced at the maximum discount (25%) permitted under TSX rules for an ownership interest in Argonaut. The Revised Proposal provided that it would be automatically withdrawn if shared with anyone other than the directors, officers and financial and legal advisors of Argonaut. The Revised Proposal also provided for exclusivity in favour of Alamos and provided that it would expire no later than 5:00 p.m. on March 28, 2024.
Following receipt of the Revised Proposal, the Special Committee met with Scotiabank and Mr. Horner to review the Revised Proposal and discuss the associated issues and risks. Since the Revised Proposal contemplated lock-up agreements with 'certain shareholders' (likely GMT Capital Corp. and Libra Advisors, LLC, Argonaut's two largest shareholders), the Special Committee asked Mr. Kofman to contact Alamos to request permission to discuss the Revised Proposal with those shareholders. Alamos granted that permission.
On March 18, 2024, Ms. Rogers, Mr. Horner and Ms. Yang, a member of the Argonaut Board who is affiliated with GMT Capital Corp., along with representatives of Scotiabank, discussed the Revised Proposal with Tom Claugus, the founder and Chief Executive Officer of GMT Capital Corp., and Ranjan Tandon, the Chief Executive Officer of Libra Advisors, LLC. Mr. Claugus asked Scotiabank to inform Mr. McCluskey that GMT Capital Corp. was supportive of an Argonaut-Alamos business combination but was seeking an increase to the exchange ratio of Alamos Shares per Argonaut Share to an implied consideration of C$0.40, no SpinCo and a larger interim private placement investment by Alamos in Argonaut of C$60 million, at a significantly smaller discount than the maximum permissible discount proposed by Alamos.
Scotiabank conveyed those requests in a telephone call with Mr. McCluskey. Mr. McCluskey declined the request to increase the exchange ratio of Alamos Shares per Argonaut share beyond an implied consideration of C$0.32 and explained that Alamos needed to maintain a SpinCo for several reasons, including because Alamos had not conducted sufficient due diligence on the assets to be transferred to SpinCo. Mr. McCluskey did agree to increase the amount of the private placement into Argonaut to C$50 million, of which C$10 million could be spent on SpinCo assets before closing of the transaction, in addition to the US$10 million that Alamos would invest in SpinCo as part of its capitalization as a public corporation.
On March 18, 2024, the Special Committee met with Scotiabank and Mr. Horner to review the status of discussions with Refinancing Party 1, Alamos, lenders to Argonaut and GMT Capital Corp. and Libra Advisors, LLC. Following this meeting, Ms. Rogers, Mr. Kofman, Ms. Yang, Scotiabank, and representatives of GMT Capital Corp. and Libra Advisors, LLC discussed the prior conversation between Scotiabank and Mr. McCluskey.
Subsequently that evening, representatives of GMT Capital Corp. and Libra Advisors, LLC discussed their requests with Mr. McCluskey. Mr. McClusky agreed to increase the proposed exchange ratio of Alamos Shares per Argonaut Share from an implied consideration of C$0.32 to an implied consideration of C$0.34 (exclusive of any value for SpinCo shares).
Later on March 18, 2024, Nils Engelstad, the General Counsel of Alamos, advised Scotiabank by e-mail that Alamos was prepared to increase the exchange ratio of Alamos Shares per Argonaut Share to 0.0185, representing an implied consideration of C$0.34 based on the 5-day VWAP ending March 17, 2024. Mr. Engelstad also confirmed that the Alamos private placement should be at the maximum discount price permitted by the TSX and otherwise confirmed the SpinCo financial matters discussed on the call between Mr. McCluskey and Scotiabank. Mr. Engelstad indicated that Alamos would be satisfied that Argonaut would recruit the necessary members of the management and board of SpinCo.
On March 19, 2024, the Special Committee met to review the respective merits and risks of proceeding with the latest proposal of Refinancing Party 1 and the proposed business combination with Alamos. The financial advisors provided their assessment of the financial and strategic merits of each proposal as compared to the other potential available alternatives, comparisons to precedent transactions, a comparison to the Corporation's standalone prospects, and certain issues and risks associated with the proposals. Mr. Young stated that, in his opinion, while the revised proposal of Refinancing Party 1 was a viable option, Argonaut would still require additional financing in the longer-term, and as a result, management favoured a business combination with Alamos given the long-term stability that it provided and the potential synergies in the combination of the Alamos Island Gold mine and the Magino mine. Cormark advised that it was continuing its work in connection with rendering an opinion in respect of the fairness of the consideration to be received by the Argonaut Shareholders under the proposed arrangement with Alamos. The Special Committee concluded that none of the refinancing proposals, including the most recent proposal of Refinancing Party 1, provided sufficient capital for Argonaut to carry out its business plan without significant risk of running out of capital. Even with optimistic business assumptions, the Special Committee concluded that maintaining the status quo was high risk and was unlikely to deliver value to Argonaut Shareholders.
On March 19, 2024, Mr. Claugus of GMT Capital Corp. made a telephone call to Mr. McCluskey in which he requested that the VWAP period for calculating the exchange ratio of Alamos Shares per Argonaut Share be increased from five days to 20 days, which would result in an increase to the exchange ratio. Mr. McCluskey declined GMT Capital Corp.'s requested modification to the exchange ratio calculation.
On March 20, 2024, Braden Jebson of Torys LLP, corporate counsel to Alamos, advised Mr. Horner that Alamos was proposing to seek approval of the Argonaut Board, subject to completion of transaction documentation for a transaction announcement before the opening of the markets on March 27, 2024. For Argonaut, this necessitated seeking a further waiver from its lenders from financial covenants on the Argonaut Loan Facilities as its existing waiver would expire on March 25, 2024. That waiver was subsequently obtained with effect through March 28, 2024.
On March 21, 2024, Torys provided Bennett Jones and Mr. Horner with a draft of the proposed Arrangement Agreement. Through the rest of that day, Mr. Savarie, the General Counsel of Argonaut, Bennett Jones and Mr. Horner reviewed the draft and prepared an issues list to review with the Special Committee and the financial advisors. On March 22, 2024, the issues list was provided to the Special Committee and the Special Committee met with the legal and financial advisors later that afternoon to review the issues and provide instructions to the legal advisors. Mr. Horner advised the Special Committee that, subject to settlement of a satisfactory approach in respect of the significant surety bond for reclamation obligations at the Florida Canyon property and the circumstances under which the C$20 million termination fee would be payable, the deal protection and superior proposal provisions in the draft agreement were otherwise customary.
From March 21, 2024 through the early morning hours of March 26, 2024, Bennett Jones, on behalf of Argonaut, and Torys, on behalf of Alamos, together with the respective General Counsels of both parties, continued to negotiate the Arrangement Agreement and the Plan of Arrangement. Three issues of continuing importance to Argonaut were ensuring that Alamos would provide support in respect of the surety bond at the Florida Canyon property to be transferred to SpinCo; extending the outside date for completion of the arrangement if required to obtain regulatory approvals; and reducing the termination fee payable by Argonaut to Alamos in circumstances where the Arrangement Agreement was terminated other than in connection with a superior proposal.
Ultimately, the parties agreed that Alamos would guarantee the Florida Canyon surety bond (up to US$55 million) in exchange for a 2% net smelter royalty at the Florida Canyon mine, which can be terminated by SpinCo at any time by releasing Alamos from its guarantee and will also terminate on a change of control of SpinCo upon which Alamos's guarantee will be released; that the termination date be extended from June 28, 2024 to September 6, 2024 if required to obtain certain regulatory approvals; and that the termination fee for Argonaut's failure to satisfy certain of its representations, warranties, covenants or agreements in favour of Alamos would be C$10 million while the termination fee for Argonaut completing an alternative acquisition proposal would be C$20 million.
On March 22 and 23, 2024, Scotiabank and Greg Fisher, the Chief Financial Officer of Alamos, exchanged e-mails regarding a smaller discount for the C$50 million private placement by Alamos in Argonaut and the proposed termination fee for a termination of the Arrangement Agreement. On March 23, 2024, Mr. Fisher confirmed to Scotiabank by e-mail that the maximum Alamos ownership interest in SpinCo would be 19.99% on the creation of SpinCo and that Alamos was willing to accept that the C$50 million private placement by Alamos in Argonaut would be priced at an 8% discount to Argonaut's 5-day VWAP as of March 26, 2024 and requested that Argonaut therefore accept the C$20 million arrangement termination fee proposed by Alamos.
On March 22, 2024, Argonaut received an unsolicited non-binding proposal from a gold mining company ("Strategic Party 2") proposing a business combination by a plan of arrangement under which Strategic Party 2 would acquire all the Argonaut Shares for an implied consideration of C$0.37 for each Argonaut Share payable in the shares of Strategic Party 2. Strategic Party 2 indicated that it still needed to complete due diligence, which would include a Magino site visit. Strategic Party 2 indicated that it had hired a financial advisor and counsel and expected to be in a position to make a definitive proposal within 30 days.
On March 23, 2024, the Special Committee met to review the proposal and consider the financial and strategic merits of a potential transaction with Strategic Party 2 as compared to the other available alternatives. The Special Committee received advice from Scotiabank that based on discussions with Strategic Party 2 and its need for extensive diligence, there was insufficient time to seriously consider its non-binding proposal as an alternative to the binding proposal from Alamos. The Special Committee accepted that advice. At the request of the Special Committee, Scotiabank advised Strategic Party 2 of this determination by the Special Committee.
On March 24, 2024, the Special Committee held discussions to review certain matters relating to retention plans, incentive compensation and termination payments in a without cause cessation of employment scenario following a change of control for several groups of Argonaut personnel. The Special Committee considered the circumstances of mine site employees, employees expected to transfer to employment with SpinCo, non-executive head office employees and a small number of executives with short tenure. Accordingly, on March 26, 2024, the Special Committee recommended and the Argonaut Board approved certain amendments to termination payment provisions involving four employees and the acceleration of some equity incentive grants for certain specified employees in light of an anticipated change of control of the Corporation.
On March 25, 2024, the Special Committee met to consider the status of the resolution of matters in the Arrangement Agreement and to set a timetable for meetings of the Special Committee and the Argonaut Board on March 26, 2024.
On March 25, 2024, Argonaut obtained an extension to the conditional waivers of certain financial covenants under the Argonaut Loan Facilities, with effect through March 28, 2024.
On March 26, 2024, the Special Committee met with Mr. Horner and Bennett Jones to consider the status of the resolution of matters in the Arrangement Agreement, the Plan of Arrangement and associated disclosure letter and schedules. After discussion and consideration, including a review of the transaction terms and other relevant matters, the Special Committee unanimously resolved to recommend the proposed arrangement to the Argonaut Board, subject to receiving an oral fairness opinion from Cormark at the Argonaut Board meeting later in the day, to be reflected in a subsequent written fairness opinion.
Later on March 26, 2024, the Argonaut Board and senior management met with Mr. Horner, Bennett Jones and representatives of Scotiabank and Cormark to receive the report and recommendation of the Special Committee. At that meeting, the legal advisors updated the Argonaut Board on the status of the negotiations of the Arrangement Agreement, the Plan of Arrangement and the Argonaut disclosure letter. Mr. Young reiterated that management supported the Arrangement. Mr. Kofman commented on the terms and impact of the Arrangement addressing the interests of all Argonaut stakeholders. Cormark reviewed the process leading to the Arrangement and the work and processes it had undertaken to be in a position to deliver its fairness opinion. Cormark provided its oral opinion, which was subsequently confirmed by delivery of a written opinion, that, as of March 26, 2024, and subject to the assumptions, limitations, and qualifications set out therein, the consideration to be received by Argonaut Shareholders pursuant to the Plan of Arrangement is fair, from a financial point of view, to Argonaut Shareholders. After a discussion and taking into consideration the unanimous recommendation of the Special Committee, its own assessment of the transaction and the interests of Argonaut Shareholders and other stakeholders, the Fairness Opinion and other relevant matters, the Argonaut Board unanimously determined that the Arrangement and the entering into of the Arrangement Agreement are in the best interests of Argonaut and that the consideration to be received under the Arrangement is fair to Argonaut Shareholders, unanimously approved Argonaut entering into the Arrangement Agreement and the ancillary agreements and unanimously resolved to recommend that Argonaut Shareholders vote in favour of the Arrangement.
As required pursuant to the Arrangement Agreement, GMT Capital Corp., Libra Advisors, LLC and members of Argonaut's senior management and the Argonaut Board executed their lock-up agreements dated March 27, 2024 committing to vote in favour of the Arrangement Resolution.
Early in the morning of March 27, 2024, Alamos and Argonaut executed the Arrangement Agreement. Concurrently with execution of the Arrangement Agreement, GMT Capital Corp., Libra Advisors, LLC and members of Argonaut's senior management and the Argonaut Board executed lock-up agreements dated March 27, 2024 committing to vote in favour of the Arrangement Resolution. A joint press release of Argonaut and Alamos was released prior to the commencement of trading on March 27, 2024.
On March 28, 2024, Argonaut obtained a waiver of certain financial covenants under the Argonaut Loan Facilities, which were conditionally waived until June 28, 2024 in order to facilitate the transaction under the Arrangement Agreement.
On April 4, 2024, Argonaut and Alamos announced the closing of a non-brokered private placement provided for in the Arrangement Agreement, pursuant to which Alamos subscribed for 13.8% of Argonaut's Shares for gross proceeds to Argonaut of C$50 million. The net proceeds from the private placement will be used by Argonaut to fund immediate liquidity needs related to the Argonaut Loan Facilities and operations, including the advancement of the Magino mine and for general working capital.