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Alamos Gold Announces the Sale of Esperanza Gold Project for Total Consideration of up to $60 Million
TORONTO, Feb. 28, 2022 (GLOBE NEWSWIRE) -- Alamos Gold Inc. (TSX:AGI; NYSE:AGI) (“Alamos” or the “Company”) announced today that it has entered into a binding a
About this update from Alamos Gold Inc.
[{"type":"text","content":" TORONTO, Feb. 28, 2022 (GLOBE NEWSWIRE) -- Alamos Gold Inc. (TSX:AGI; NYSE:AGI) (“Alamos” or the “Company”) announced today that it has entered into a binding agreement to sell its non-core Esperanza Gold Project (“Esperanza”) located in Morelos State, Mexico to Zacatecas Silver Corp. (“Zacatecas Silver”) for total consideration of up to $60 million (the “Transaction”). The Transaction is comprised of the following: (i) $21 million of total consideration upon closing of the Transaction, including: $5 million in cash; $10 million of Zacatecas Silver shares (12.14 million common shares at a price of C$1.05) (“Initial Shares”); and A silver metal stream valued at approximately $6 million based on consensus long-term silver price estimates. Under the stream, Alamos is entitled to receive 20% of the silver produced from Esperanza at a cash price of 20% of the prevailing spot silver price, subject to a maximum of 500,000 ounces of silver delivered to Alamos. (ii) $39 million of additional consideration upon the completion of the following milestones (“Contingent Payments”): $5 million within 60 days following Zacatecas Silver receiving approval of the Environmental Impact Assessment Report for Esperanza; $14 million within 60 days of the earlier of (i) completion of a feasibility study on Esperanza, or (ii) Zacatecas Silver announcing a construction decision on Esperanza; and $20 million within 180 days of commencement of commercial production from Esperanza. The sale of Esperanza is consistent with Alamos’ strategy of monetizing and maximizing the value of its non-core assets while focusing on advancing its strong portfolio of high-return growth projects. With the monetization of Esperanza, Alamos has surfaced nearly $100 million in total consideration over the past two years through the sale of non-core assets and gains on the sale of equity securities in other companies. Upon closing of the transaction, it is expected Alamos will own approximately 15% of Zacatecas Silver common shares outstanding. Combined with the silver stream and Contingent Payments, this will provide Alamos with meaningful ongoing exposure to Esperanza. With respect to the Contingent Payments, Zacatecas Silver may issue shares to satisfy 50% of such payments, subject to Alamos holding no more than 19.99% of Zacatecas Silver on a partially-diluted basis. The sh...