Argonaut to Buy Prodigy for $327 Million Adding Gold Project
Prodigy stockholders will receive 0.1042 of an Argonaut share and C$0.00001 in cash for each share of Vancouver-based Prodigy, the companies said today in a statement. The offer is valued at C$1.09 a share, a 58 percent premium, based on the Oct. 12 closing price, according to a calculation by Bloomberg.
The acquisition and development of Prodigy’s Magino gold project will help Reno, Nevada-based Argonaut meet its annual production target of 300,000 to 500,000 ounces of gold, the companies said. Argonaut shareholders would own about 78 percent of the combined entity.
“Magino is a highly attractive asset which has shown continued resource growth,” Argonaut Chief Executive Officer Pete Dougherty said in the statement.
Argonaut fell 8.6 percent to C$9.58 at 2:38 p.m. in Toronto, after earlier having the biggest intraday decline since October 2010. Prodigy rose 39 percent to 96 Canadian cents, the largest intraday gain since September 2010.
Argonaut’s financial adviser on the deal is BMO Capital Markets and its legal adviser is Fraser Milner Casgrain LLP. Prodigy is being advised by National Bank Financial Inc. and DuMoulin Black LLP.
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