/THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO
U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
Trading Symbol: TSX:AR
TORONTO, Jan. 25, 2021 /CNW/ - Argonaut Gold Inc.
(TSX: AR) ("Argonaut" or the "Company")
is pleased to announce that it has entered into an agreement with a
syndicate of underwriters led by Cormark Securities Inc.
(collectively, the "Underwriters"), pursuant to which the
Underwriters have agreed to purchase , on a "bought deal" basis,
8,156,100 common shares to be issued as "flow-through shares"
with respect to "Canadian development expenses" ("CDE")
within the meaning of the Income Tax Act (Canada) and the regulations thereunder in
force as of the date hereof (the "Tax Act") (the "CDE
Flow-Through Shares") at a price of $2.82 per CDE Flow-Through Share (the "CDE
Offering Price") for gross proceeds to the Company of
approximately $23 million (the
"Offering").
The Underwriters also have an option to purchase that number of
additional CDE Flow-Through Shares equal to 15% of the number of
CDE Flow-Through Shares sold pursuant to the Offering at CDE
Offering Price, for market stabilization purposes and to cover
over-allotments for a period expiring 30 days after the date of
closing.
The proceeds from the sale of the CDE Flow-Through Shares will
be used on development expenses on the Magino project as permitted
under the Tax Act to qualify as CDE. The Company will
renounce all the CDE development expenses in favour of the
subscribers of the CDE Flow-Through Shares effective on or before
December 31, 2021.
The CDE Flow-Through Shares will be offered by way of short form
prospectus in each of the provinces of Canada, except for Québec, pursuant to
National Instrument 44-101 – Short Form Prospectus
Distributions and some may be resold in the United States pursuant to an exemption
from the registration requirements of the United States
Securities Act of 1933, as amended (the "U.S. Securities
Act") and in such other jurisdictions outside of Canada and the
United States as agreed to by the Company, in each case in
accordance with all applicable laws and provided that no
prospectus, registration statement or similar document is required
to be filed in such jurisdiction.
Closing is expected on or about February
11, 2021 and is subject to Toronto Stock Exchange and other
necessary regulatory approvals.
The CDE Flow-Through Shares have not been, and will not be,
registered under the U.S. Securities Act or any U.S. state
securities laws, and may not be offered or sold in the United States or to, or for the account or
benefit of, United States persons
absent registration or any applicable exemption from the
registration requirements of the U.S. Securities Act and applicable
U.S. state securities laws. This press release shall not constitute
an offer to sell or the solicitation of an offer to buy securities
in the United States, nor will
there be any sale of these securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful.
About Argonaut Gold
Argonaut Gold is a Canadian gold company engaged in exploration,
mine development and production. Its primary assets are the
El Castillo mine and San Agustin mine, which together form the El
Castillo Complex in Durango,
Mexico, the La Colorada
mine in Sonora, Mexico and the
Florida Canyon mine in Nevada,
USA. The Company also holds the development stage Magino
project, the advanced exploration stage Cerro del Gallo project and several other
exploration stage projects, all of which are located in
North America.
Forward-Looking Information
This press
release contains certain "forward-looking statements" and
"forward-looking information" under applicable Canadian securities
laws concerning the business, operations and financial performance
and condition of Argonaut Gold. Forward- looking statements and
forward-looking information in this press release include, but are
not limited to, statements with respect to closing of the Offering,
use of proceeds of the Offering, tax treatment of the CDE Flow
Through Shares, timing of the renunciation of the development
expenses. Except for statements of historical fact relating to
Argonaut, certain information contained herein constitutes
forward-looking statements. Forward-looking statements are
frequently characterized by words such as "plan," "expect,"
"project," "intend," "believe," "anticipate", "estimate" and other
similar words, or statements that certain events or conditions
"may" or "will" occur. Forward-looking statements are based on the
opinions and estimates of the management of Argonaut at the date
the statements are made, and are based on a number of assumptions
and subject to a variety of risks and uncertainties and other
factors that could cause actual events or results to differ
materially from those projected in the forward-looking statements.
Many of these assumptions are based on factors and events that are
not within the control of Argonaut and there is no assurance they
will prove to be correct. Factors that could cause actual results
to vary materially from results anticipated by such forward-looking
statements include risks of the mining industry, the spread of
COVID-19 and the impact of government policies to ameliorate
COVID-19, failure of plant, equipment or processes to operate as
anticipated, changes in market conditions, variations in ore grade
or recovery rates, risks relating to international operations,
fluctuating metal prices and currency exchange rates, changes in
project parameters, the possibility of project cost overruns or
unanticipated costs and expenses and labour disputes. These factors
are discussed in greater detail in Argonaut's (i) most recent
Annual Information Forms, and (ii) most recent Management
Discussion and Analysis, which are each filed on Argonaut's SEDAR
profile and provide additional general assumptions in connection
with these statements. Argonaut cautions that the foregoing list of
important factors is not exhaustive. Investors and others who base
themselves on forward-looking statements should carefully consider
the above factors as well as the uncertainties they represent and
the risk they entail. Argonaut believes that the expectations
reflected in those forward-looking statements are reasonable, but
no assurance can be given that these expectations will prove to be
correct and such forward-looking statements included in this
presentation should not be unduly relied upon. These statements
speak only as of the date of this presentation. Although Argonaut
have attempted to identify important factors that could cause
actual actions, events or results to differ materially from those
described in forward-looking statements, there may be other factors
that cause actions, events or results not to be anticipated,
estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Argonaut undertakes any obligation
to update forward-looking statements if circumstances or
management's estimates or opinions should change except as required
by applicable securities laws. The reader is cautioned not to place
undue reliance on forward-looking statements. Statements concerning
mineral reserve and resource estimates may also be deemed to
constitute forward-looking statements to the extent they involve
estimates of the mineralization that will be encountered if the
property is developed. Comparative market information is as of a
date prior to the date of this document.
For more information,
contact:
Argonaut Gold Inc.
Dan
Symons
Vice President, Corporate Development & Investor Relations
Phone: 416-915-3107
Email: dan.symons@argonautgold.com
SOURCE Argonaut Gold Inc.