Argonaut Gold to double share count with equity raise for Magino build

Argonaut Gold (TSX: AR) has entered into an agreement with banks and financial institutions to issue 434 million common shares to help it […]
The plant site at the Magino gold project in late November 2021. Credit: Argonaut Gold.

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Argonaut Gold (TSX: AR) has entered into an agreement with banks and financial institutions to issue 434 million common shares to help it finance the final construction of its Magino gold mine in Ontario.

Argonaut’s 100%-owned Magino mine is an underground, past-producing project located about 40 km northeast of Wawa. Construction to bring mine back into production as an open pit operation has been ongoing since October 2020.

In a news release Thursday night, Argonaut said the shares would be offered for 45¢ each, for gross proceeds of about $195 million. The offering is expected to close on July 5, and the company is seeking a “financial hardship” exemption from the Toronto Stock Exchange to complete the financing without shareholder approval. The financing will more than double Argonaut’s outstanding common shares, currently around 333 million. It would also see the company’s largest shareholder, GMT Capital, with a 27.5% share of the company, up from its current 20.3% holding.

Its agreement partners include BMO Capital Markets, Scotiabank, Cormark Securities, Canaccord Genuity Corp., RBC Capital Markets, Desjardins Capital Markets, Echelon Wealth Partners, Laurentian Bank Securities, Paradigm Capital, and Stifel GMP.

The share deal is in addition to a US$250 million debt financing agreement made with several lenders that is intended to help Argonaut pay off its debts and finance development and expansion at Magino and other producing assets.

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