Alamos eliminates most of Argonaut’s gold hedge book
Canadian miner Alamos Gold has eliminated the majority of the inherited hedge book of Argonaut Gold, enhancing its exposure to rising near-term gold prices.
The company on Monday announced a gold sale prepayment agreement for $116-million in exchange for the delivery of 49 384 oz in 2025.
The gold prepayment was executed by Canadian Imperial Bank of Commerce (lead), Bank of Montreal, National Bank of Canada, and ING Capital Markets.
The proceeds of the prepayment were used to get rid of gold forward purchase contracts previously entered into by Argonaut, of 179 417 oz in 2024 and 2025 with an average price of $1 838/oz.
The transaction eliminated more than half of Argonaut’s hedge book and associated market-to-market liability.
As part of the recently closed acquisition of Argonaut, Alamos inherited Argonaut’s hedge book which included gold forward purchase contracts totalling 329 417 oz between 2024 and 2027. The average forward prices on the contracts ranged between $1 821/oz and $1 860/oz. The transaction has closed out all of the 2024 and 2025 forward purchase contracts.
The remaining Argonaut hedge book consists of forward purchase contracts totalling 150 000 oz in 2026 and 2027. This is expected to account for less than 12% of total consolidated production over that time frame.
“We expect our growing production and declining costs to drive significant free cash flow growth in the years ahead. With the majority of the Argonaut hedge book now eliminated, we are even better positioned to capitalize on the favourable outlook for gold,” said CEO John McCluskey.
Alamos will continue to review opportunities to unwind the remaining 2026 and 2027 forward purchase contracts.
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