announce that they have entered into an agreement (the
"Arrangement Agreement") pursuant to which
Argonaut Gold has agreed to acquire all of the issued and
outstanding common shares of Prodigy by way
of a Plan of Arrangement (the
strong
operating experience and cash flow of Argonaut Gold and its
ability to successfully advance Prodigy's
Magino gold project, which has an indicated resource of more
than 6 million ounces (223 million tonnes at
0.87 g/t using a cut-off grade of 0.35 g/t).
Pursuant to the terms of the Arrangement announced today,
Prodigy shareholders will receive 0.1042 of an Argonaut Gold
share and C$0.0001 in cash per Prodigy share, representing
C$1.08 per share based on Argonaut Gold's 20-day
volume-weighted average price ("VWAP") and a premium of 54%
based on both companies' 20-day VWAPs as at October 12, 2012,
the last trading day prior to this announcement. The
transaction values Prodigy's equity at approximately C$341
million on a fully diluted in-the-money basis and implies an
enterprise value of approximately C$277 million.
Pro forma the transaction, Argonaut Gold will be owned
approximately 78% by current Argonaut Gold shareholders and
22% by current Prodigy shareholders (based on fully diluted
in-the-money shares outstanding). The terms of the
transaction have been unanimously approved by both companies'
Boards of Directors, with the commitment of votes from all
directors and officers of Prodigy, representing approximately
3.9% of Prodigy's shares, having been secured.