Alamos Gold Inc.
TSX : AGI

Alamos Gold Inc.

May 30, 2006 09:22 ET

Alamos Gold Inc. Receives Consent for Early Debenture Conversion

TORONTO, ONTARIO--(CCNMatthews - May 30, 2006) - Alamos Gold Inc. (the "Company") (TSX:AGI) announces that it has received approval from the holders of its 5.5% Convertible Unsecured Subordinated Debentures due 2010 convertible debentures to amend the terms of the trust indenture governing such debentures to allow for early conversion of the outstanding debentures.

Having secured the approval of the debenture holders the Company is designating a conversion period during which holders of the debentures will receive a premium for early conversion.

Any Debentures converted into common shares between 9:00 a.m. (Toronto time) on June 1, 2006 and 5:00 p.m. (Toronto time) on June 22, 2006 (the "Incentive Conversion Period") will be entitled to receive, for each $100 principal amount of debentures that they convert: (i) 18.86792 common shares; (ii) additional common shares determined at the end of the Incentive Conversion Period with reference to the table set out on Appendix A; and (iii) additional common shares equal in value to $3.00 per $100 principal amount of Debentures converted at a deemed price per common share equal to the volume weighted average trading price of the common shares for the last five trading days of the Incentive Conversion Period.

The incentive will not negatively impact the rights of debentureholders who do not wish to participate. Debentureholders will not be obliged to convert their debentures during the Incentive Conversion Period and there will be no changes to the rights and privileges of debentureholders who do not elect to take advantage of this incentive.

The directors of the Company will have the discretion not to proceed with, or discontinue, the incentive at any time.

Alamos' common shares are traded on the Toronto Stock Exchange under the symbol "AGI" and its convertible debentures are traded under the symbol "AGI.DB".

Safe Harbor Statement under the United States Private Securities Litigation Act of 1995: Statements in this release that are forward-looking, including statements relating to the future recovery of the Mulatos Project, are subject to various risks and uncertainties concerning the specific factors identified about in Alamos periodic filings with the Ontario Securities Commission and the U.S. Securities Exchange Commission. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The Company does not intend to update this information and disclaims any legal liability to the contrary.

APPENDIX "A"

TABLE FOR DETERMINING THE NUMBER OF ADDITIONAL SHARES

The number of additional common shares issuable per $100 principal amount of debentures converted is based upon the last date of the Incentive Conversion Period (the "Effective Date") and the volume weighted average trading price of the common shares for the last five trading days of the Incentive Conversion Period (the "Volume Weighted Average Common Share Price"). If the Volume Weighted Average Common Share Price is between two amounts in the table or if the Effective Date is between two dates in the table, the number of common shares issuable in accordance with the table shall be determined by a straight-line interpolation between the number of additional common shares set forth for the higher and lower Volume Weighted Average Common Share Price amounts and the two dates, as applicable, based on a 365-day year.




Effective Volume Weighted Average Common Share Price

Date $3.96 $4.25 $4.75 $5.00 $5.75
---- ------ ------ ------ ------ ------
15-Jan-06 6.3846 5.9679 4.8243 4.3671 3.3278
15-Jan-07 6.3846 5.4214 4.1653 3.6747 2.5764
15-Jan-08 6.3846 5.1272 3.6555 3.0568 1.673
15-Jan-09 6.3846 4.9894 3.4504 2.8394 1.4978
15-Jan-10 6.3846 4.5703 2.1901 1.3181 0


Effective Volume Weighted Average Common Share Price

Date $6.25 $6.75 $7.25 $7.75 $8.25 Cont'd
---- ------ ------ ------ ------ ------
15-Jan-06 2.8286 2.4372 2.13 1.8808 1.6808
15-Jan-07 2.0711 1.6823 1.4056 1.1793 1.0167
15-Jan-08 1.0179 0.5549 0.2834 0 0
15-Jan-09 0.8991 0.4915 0 0 0
15-Jan-10 0 0 0 0 0


$8.75 $9.25 $9.75 $10.00 $11.00
------ ------ ------ ------ ------
15-Jan-06 1.5133 1.3767 1.2619 1.2098 1.0429
15-Jan-07 0.8784 0.7808 0.6963 0.6603 0.5542
15-Jan-08 0 0 0 0 0
15-Jan-09 0 0 0 0 0
15-Jan-10 0 0 0 0 0



$12.00 $13.00 $14.00 $15.00 $20 $25
------ ------ ------ ------ ------ ------
15-Jan-06 0.9174 0.8212 0.7444 0.6824 0.4899 0.3871
15-Jan-07 0.4841 0.4268 0.3873 0.3556 0.26 0.2073
15-Jan-08 0 0 0 0 0 0
15-Jan-09 0 0 0 0 0 0
15-Jan-10 0 0 0 0 0 0


The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Alamos Gold Inc.
    John A. McCluskey
    President and Chief Executive Officer
    (416) 368-9932 x203 or 1 (866) 788-8801
    or
    Alamos Gold Inc.
    Victoria Vargas de Szarzynski
    Investor Relations
    (416) 368-9932 x201 or 1 (866) 788-8801
    vvargas@alamosgold.com
    www.alamosgold.com