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Cofece authorizes concentration between Argonaut and AP Mining

The Federal Economic Competition Commission (Cofece) of Mexico authorized the merger between Argonaut Gold lnc., Alliant Gold Corp. and Pinehurst Capital II Inc.

On November 20, 2020, Argonaut AP Mining and Pinehurst notified Cofece of their intention to carry out a concentration.

The foregoing in accordance with the provisions of article 90 of the Federal Law on Economic Competition.

Earlier, on September 10, 2020, Argonaut entered into a definitive agreement with AP Mining for the sale of all the issued and outstanding shares of Aurea Mining Inc. and its wholly owned subsidiary Minera Aurea (Project Owner Ana Paula).

In turn, AP Mining entered into a definitive agreement with Pinehurst dated September 10, 2020, pursuant to which Pinehurst and AP Mining have agreed to complete a business combination.

The objective of this combination is for Pinehurst to be the parent company and 100% of AP Mining’s issued and outstanding securities to be owned by the resulting Issuer, conditional on AP Mining completing the acquisition of the Ana Paula Project in accordance with the terms of the Agreement. Argonaut.

Concentration

Under the terms of the Argonaut Agreement, AP Mining will acquire all the issued and outstanding shares of Aurea Mining Inc. and its wholly owned subsidiary Minera Aurea by:

An aggregate purchase price comprised, in part, of US $ 30 million in cash at closing, a promissory note in the amount of C $ 10 million payable on the date the resulting Issuer announces the commencement of construction of the Ana Paula Project.

1% royalties from the smelter’s net returns.

A resulting number of ordinary shares of the Issuer that is equal to 9.9% of the outstanding ordinary shares of the Issuer immediately after the completion of the qualified transaction.

Cofece

A concentration is the merger, acquisition of control or any act by virtue of which companies, associations, shares, social shares, trusts or assets in general join that is carried out between competitors, suppliers, clients or any other economic agents.

Generally, companies concentrate with the objective of expanding markets and increasing their efficiency, which brings benefits to consumers. However, some concentrations can generate anti-competitive effects.

Therefore, Cofece has the power not to authorize or subject to the fulfillment of conditions those concentrations that have the purpose or effect of obstructing, diminishing, damaging or preventing economic competition or free competition.

With this, Cofece prevents the creation of market structures that represent risks to competition and free competition through the analysis of concentrations between economic agents.

Once these operations are analyzed, the Plenary of the Cofece can authorize them, subject them to the fulfillment of conditions or object to them when they generate risks to the competition.

 

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