Proposed Business Combination with Rye Patch Gold

Proposed Business Combination with Rye Patch Gold

On March 19, 2018, Alio Gold Inc. and Rye Patch Gold Corp. announced they have entered into an agreement whereby Alio Gold will acquire, through a plan of arrangement (the “Arrangement”) all of the outstanding shares of Rye Patch. 

Under the Arrangement, each common share of Rye Patch will be exchanged for 0.48 common shares of Alio Gold.  The offer implies a value of C$1.57 per Rye Patch share, a 35% premium to Rye Patch shareholders, based on the 20-day volume weighted average trading price of Alio Gold shares on the TSX and Rye Patch shares on the TSX.V for the period ending March 16, 2018.  The offer values Rye Patch’s outstanding equity (undiluted) at approximately C$128 million.  The number of Alio Gold shares to be issued will be approximately 39.0 million based on the issued and outstanding shares as of the announcement date, subject to adjustment for options, warrants and restricted stock units vested prior to the Arrangement. The transaction is expected to close on or about May 25, 2018.  Existing Alio Gold and Rye Patch shareholders will own approximately 53% and 47% of the combined company, respectively, following the close of the transaction .

To read the news release click here

To listen to the webcast click here

Timing

Full details of the Arrangement will be included in the management information circulars of Alio Gold and Rye Patch and both circulars are expected to be mailed to their respective shareholders on or about April 17, 2018.  It is anticipated that both shareholder meetings and closing of the transaction will take place on or about May 25, 2018.