Argonaut Gold Inc.
TSX : AR

Argonaut Gold Inc.

January 20, 2015 07:30 ET

Argonaut Gold Adopts Shareholder Rights Plan

TORONTO, ONTARIO--(Marketwired - Jan. 20, 2015) - Argonaut Gold Inc. (TSX:AR) (the "Company", "Argonaut Gold" or "Argonaut") announces today that its Board of Directors has adopted a shareholder rights plan agreement (the "Shareholder Rights Plan"). The Shareholder Rights Plan is effective immediately and is subject to ratification by shareholders of Argonaut Gold at its 2015 annual shareholder meeting. The Shareholder Rights Plan is also subject to the approval of the Toronto Stock Exchange. The Shareholder Rights Plan was not adopted in response to any specific proposal or intention to acquire control of Argonaut Gold. The Shareholder Rights Plan is similar to rights plans adopted by other Canadian companies and ratified by their shareholders.

The object of the Shareholder Rights Plan is to protect Argonaut Gold's shareholders from unfair, abusive or coercive take-over strategies, including the acquisition of control of Argonaut Gold through a take-over bid that does not treat all shareholders equally or fairly. The Shareholder Rights Plan will ensure that shareholders will have adequate time to properly assess the merits of any proposed take-over bid or similar transaction involving the shares of Argonaut Gold without undue pressure, will encourage the development of alternative transactions or competing take-over bids under the circumstances and will give the directors adequate time to fully consider any such take-over bid or similar transaction and any alternative transaction that may be proposed.

Under the terms of the Shareholder Rights Plan, one right has been issued with respect to each common share of Argonaut Gold issued and outstanding at 12:01 a.m. (Toronto time) today and one right will also be issued and will attach to each common share issued thereafter. These rights will become exercisable only when a person, including any party related to it, acquires or attempts to acquire 20 percent or more of Argonaut Gold's outstanding common shares without complying with the "Permitted Bid" provisions of the Shareholder Rights Plan, or without approval of Argonaut Gold's Board of Directors. Should such an acquisition occur or be announced, each right would, upon exercise, entitle a rights holder, other than the acquiring person and related persons, to purchase common shares of Argonaut Gold at a substantial discount to the market price at the time.

The rights are not triggered by the purchase of shares made pursuant to a "Permitted Bid", which is a take-over bid made to all holders of shares on identical terms and which is open for acceptance for not less than 60 days. A Permitted Bid must be made by way of a take-over bid circular prepared in compliance with applicable securities law and must comply with certain other conditions.

The Board of Directors has discretion to defer the time at which the rights become exercisable, to waive the application of the Shareholder Rights Plan and to amend the Shareholder Rights Plan.

To the best of the knowledge of the Board of Directors, no existing shareholder of Argonaut Gold owns greater than 20% of the outstanding common shares of Argonaut Gold.

The Board of Directors considered a number of factors in adopting the Shareholder Rights Plan. The Board of Directors believes that the Shareholder Rights Plan benefits shareholders by providing a substantially greater opportunity to protect the interests of all shareholders in the event that Argonaut Gold is put in play through a hostile take-over bid.

If ratified by the shareholders of Argonaut, the Shareholder Rights Plan will have a term of three years. The Shareholder Rights Plan is also subject to the execution of a definitive agreement with Argonaut's transfer agent.

A copy of the Shareholder Rights Plan will be available shortly under Argonaut Gold's profile on SEDAR at www.sedar.com.

About Argonaut

Argonaut is a Canadian gold company engaged in exploration, mine development and production activities. Its primary assets are the production-stage El Castillo Mine in the State of Durango, Mexico, the La Colorada Mine in the State of Sonora, Mexico, the advanced exploration stage San Agustin project in the State of Durango, Mexico, the advanced exploration stage San Antonio project in the State of Baja California Sur, Mexico, and the development stage Magino project located in Ontario, Canada.

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Cautionary Note Regarding Forward-Looking Statements

This press release contains "forward looking statements" and "forward-looking information" under applicable Canadian securities laws. Forward-looking information includes, but is not limited to, information with respect to shareholder ratification of the rights plan. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", "estimates", "intends", "anticipates" or "believes" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information is based on the reasonable assumptions, estimates, analysis and opinions of management made at the date that such statements are made.

Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including the risk factors disclosed elsewhere in the Company's public disclosure. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information contained herein is presented for the purposes of assisting investors in understanding the Company's plans and objectives and may not be appropriate for other purposes. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

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