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Alamos Gold (NYSE:AGI) said Monday it agreed to a prepayment gold sale of $116M in exchange for the delivery of 49,384 oz in 2025, using the proceeds to close out gold 2024-25 forward purchase contracts previously entered into by Argonaut Gold totaling 179,417 oz.
Alamos (AGI) said the transaction eliminated more than half of the Argonaut hedge book and associated mark-to-market liability, while providing significantly increased exposure to rising gold prices.
The company’s acquisition of Argonaut was closed last week, and included Argonaut’s hedge book which included gold forward purchase contracts totaling 329,417 oz during 2024-27 at average forward prices on the contracts of $1,821-$1,860/oz.
The remaining Argonaut hedge book inherited by Alamos (AGI) consists of forward purchase contracts totaling 150K oz in 2026-27, and the company said it will continue to review opportunities to unwind the remaining 2026-27 forward purchase contracts.