Alamos Gold has signed a $770m agreement to acquire all issued and outstanding shares of Richmont Mines.  

Under the agreement, Alamos will offer 1.385 common shares in exchange for each Richmont common share.

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Once the transaction is completed, existing Alamos and Richmont shareholders will have around 77% and 23% of the pro forma company respectively.

Alamos Gold president and CEO John McCluskey said: "Our combination with Richmont reflects our core strategy of creating long-term value through operating high-quality assets. 

“The Island gold mine is a high-quality asset in every respect. We see excellent potential for reserve and production growth from one of the highest grade, lowest cost gold mines in Canada. 

“With this production base, growth, and balance sheet strength, Alamos will be the leading intermediate producer and presents a compelling revaluation opportunity for both Alamos and Richmont shareholders."

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"We see excellent potential for reserve and production growth from one of the highest grade, lowest cost gold mines in Canada."

Through the proposed acquisition, Alamos is expected to have gold production of more than 500,000oz this year anchored by three operations in Canada and Mexico. 

The acquisition comprises Island gold mine, which is an underground mine located in Ontario, Canada.

Alamos expects immediate cash-flow accretion from the mine, with stronger operating finances to assist internal growth activities of the pro-forma company. 

The combined entity is expected to have increased financial flexibility, supported by enhanced free cash-flow, no debt, and a balance sheet comprising cash and equity securities of around $229m. 

The transaction is subject to approval from shareholders of the respective companies and is expected to close in November. 

Separately, Richmont Mines has signed an agreement to sell the Beaufor Mine, the Camflo Mill and the Wasamac development project in Quebec to Monarques Gold.