Argonaut locks in financing for over-budget Magino project

24th June 2022

By: Mariaan Webb

Creamer Media Senior Deputy Editor Online


Font size: - +

The Magino gold mining project is in a strong position to move into production by the end of March next year, after developer Argonaut Gold secured $250-million in debt and announced a C$195-million equity raise complete the project.

The cost to complete the project has risen by another C$120-million, from the December estimate of C$800-million, Argonaut confirmed on Thursday.

To date, the company had committed about C$659-million, incurred about C$473-million and estimates that the project is 50% complete.

To bring the Magino over the finish line, Argonaut received a binding commitment letter from a syndicate of lenders for the financing of a six-year, $200-million term loan credit facility and a three-year revolving credit facility of $50-million.

The proceeds of the debt facilities would be used to refinance the company's existing debt and for general corporate purposes, including ongoing development and expansion capital of the Magino project.

Argonaut also entered into an agency agreement for a marketed offering of 434-million common shares at a discounted C$0.45 each for gross proceeds of C$195-million. The offering is led by BMO Capital Markets, Scotiabank and Cormark Securities.

A special committee, consisting of unconflicted members of the board, has considered the proposed terms of the offering, including the number of securities issuable, the number of offered shares issuable to insiders and the offering price being at a discount to the market price. The committee has recommended that the company approve the terms of the offering, Argonaut stated.

However, the firm has made application to the TSX for a "financial hardship" exemption from the requirements to obtain shareholder approval of the offering, arguing that without the offering, the company is in serious financial difficulty owing to the lack of available cash and funding resources.

As a consequence of its financial hardship application, the TSX will likely start a delisting review, but Argonaut believes that it will be in compliance with all continued listing requirements and will be in a strong financial position upon the closing of the offering and the facilities.

The company’s stock fell to a one-year low of C$0.54 a share on Thursday.

"Magino is a long life, low cost mine in an outstanding mining jurisdiction. This debt financing arrangement, alongside the proposed equity financing, will put Argonaut Gold in a strong financial position to complete the Magino project and move it forward into production by the end of Q1 2023,” said president and CEO Larry Radford.

Edited by Creamer Media Reporter


The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?