TORONTO, ONTARIO -- (Marketwire) -- 03/19/13 -- Alamos Gold Inc. (TSX: AGI)(NYSE: AGI) -
All amounts in US dollars, unless stated otherwise
Alamos Gold Inc. ("Alamos" or the "Company") announced today that it will not extend its offer (the "Offer") for Aurizon Mines Ltd. ("Aurizon"), which will expire at 5 p.m. on March 19, 2013. Due to the break fee that would be payable to Hecla, the conditions to the Offer have not been met. As a result, Alamos will not take up any Aurizon shares that are tendered to the Offer.
The British Columbia Securities Commission ("BC Securities Commission") ordered on March 18, 2013 that the second Aurizon poison pill be cease traded immediately. "We are pleased that the BC Securities Commission has removed the second poison pill, which was another improper defensive tactic of the Aurizon board designed to prevent Aurizon shareholders from tendering to the superior offer - the Alamos offer," said John A. McCluskey, President and Chief Executive Officer of Alamos.
Despite the apparent premium implied by Hecla's offer, the 57 million Hecla shares to be issued by Hecla to Aurizon shareholders as consideration in fact makes the Hecla offer inferior to the Alamos offer. Alamos firmly believes that shares in the company resulting from the combination of Alamos and Aurizon would be far more valuable than shares in the heavily indebted company resulting from the combination of Hecla and Aurizon.
Unfortunately, however, the unusual break fee that the Aurizon board has agreed to give Hecla means that, for Alamos, the cost of acquiring Aurizon is now simply too high. "The Aurizon Board, by adopting this unique type of break fee, has foreclosed the opportunity for Aurizon shareholders to tender to Alamos' superior offer," said Mr. McCluskey. "In pursuing our growth objectives, we will not deviate from the fiscal discipline that has made us one of the world's most successful gold companies, and the payment of this break fee in these circumstances would violate that discipline," said John A. McCluskey, President and Chief Executive Officer.
"Alamos has no debt, a robust balance sheet, excellent cash flow, no hedging and an attractive near-term growth profile. We remain committed to our strategy and look forward to pursuing new initiatives that will drive value for our shareholders," said Mr. McCluskey. "Based on the current implied Hecla offer value, Alamos has approximately $480 million in cash and equity investments. We see tremendous value within the industry today, and the future of Alamos continues to be very bright."
Alamos is an established Canadian-based gold producer that owns and operates the Mulatos Mine in Mexico, and has exploration and development activities in Mexico and Turkey. The Company employs more than 600 people in Mexico and Turkey and is committed to the highest standards of environmental management, social responsibility, and health and safety for its employees and neighbouring communities. As of March 14, 2013, Alamos had 127,455,786 common shares outstanding (132,326,086 shares fully diluted), which are traded on the TSX and NYSE under the symbol "AGI".
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