Alamos Gold To Acquire Esperanza Resources - Quick Facts

(RTTNews) - Alamos Gold Inc. (AGI, AGI.TO) and Esperanza Resources Corp. (ESPZF.PK, EPZ.V) entered into a definitive agreement pursuant to which Alamos has agreed to acquire all of the issued and outstanding common shares of Esperanza by way of a court-approved plan of arrangement.

As per the terms of the Agreement, Esperanza shareholders will receive C$0.85 in cash for each common share of Esperanza held, representing a premium of approximately 38% to Esperanza's 30-day volume-weighted average price for the period ending July 11, 2013. The transaction values Esperanza's equity at approximately C$69.4 million on a fully diluted in-the-money basis.

As per the deal, Esperanza shareholders will also receive 0.0625 of a warrant to purchase Alamos common shares at an exercise price of C$29.48 and expiring on May 24, 2017, resulting in the issuance of approximately five million Alamos warrants. Further, each outstanding Esperanza Warrant shall be exchanged for 0.15 of a warrant to purchase Alamos common shares at an exercise price of C$29.48 and expiring May 24, 2017, resulting in the issuance of approximately two million Alamos warrants.

The transaction is expected to be accretive to Alamos NAV, earnings and cash flow with virtually no dilution to Alamos shareholders.

The board of directors of Esperanza has unanimously approved the transaction and will recommend that Esperanza shareholders vote in favour of the transaction.

Each senior officer and each member of the board of directors of Esperanza has entered into lock-up agreements with Alamos pursuant to which each has agreed to vote in favour of the transaction, which together will represent approximately 6% of the issued and outstanding common shares of Esperanza.

Upon closing, Alamos will assume ownership of Esperanza's 100%-owned Esperanza gold project well as other various interests of Esperanza in Mexico and Peru. The Esperanza gold project is an advanced stage gold project in Morelos, Mexico, with a resource of 1.5 million ounces of gold and 16 million ounces of silver.

Completion of the transaction is subject to customary conditions, including court approvals, a favourable vote of at least 66 2/3% of the holders of Esperanza common shares voted at a special meeting of shareholders, and the receipt of all necessary regulatory and stock exchange approvals.

The Agreement includes a customary non-solicitation clause, right to match covenants and provides for the payment of a C$2.7 million break fee to Alamos under certain circumstances.