ARGONAUT GOLD AND ALIO GOLD ANNOUNCE FRIENDLY AT-MARKET MERGER

TORONTO and VANCOUVER, British Columbia, March 30, 2020 (GLOBE NEWSWIRE) -- Argonaut Gold Inc. (“Argonaut” or “Argonaut Gold”) (TSX: AR) and Alio Gold Inc. (“Alio” or “Alio Gold”) (TSX, NYSE-A: ALO) are pleased to announce that they have entered into a definitive agreement for an at-market merger (the “Arrangement Agreement”) whereby Argonaut will acquire all of the issued and outstanding shares of Alio (the “Transaction”).  Under the terms of the Arrangement Agreement, all of the Alio issued and outstanding common shares will be exchanged on the basis of 0.67 of an Argonaut common share per each Alio common share (the “Exchange Ratio”).

The Exchange Ratio has been agreed based on the volume-weighted average prices of Argonaut and Alio common shares over the 20 trading days ended on March 27, 2020.  Upon completion of the Transaction, existing Argonaut and Alio shareholders will own approximately 76% and 24% of the pro forma company, respectively, on a fully-diluted, in-the-money basis.

Transaction Highlights

• Creates Diversified Intermediate Producer:
  • Diversified platform with production from four operations totaling more than 235,000 gold equivalent ounces¹ annually.
  • Enhanced asset portfolio and Mineral Reserve and Mineral Resource base.
  • Improved geographical diversification with assets in Mexico, USA and Canada.
• Captures Significant Operating and Jurisdictional Synergies:
  • Argonaut has demonstrated operational excellence in open pit, heap leach mining over the last decade.
  • The Florida Canyon mine is in close proximity to Argonaut’s corporate headquarters.
  • Synergies at corporate and asset level G&A.
• Robust Growth Pipeline:
  • Strong internal growth optionality from strengthened asset base.
  • Mexico: Ana Paula and Cerro del Gallo.
  • Canada: Magino.
• Improved Capital Markets Scale:
  • Appeals to a broader institutional shareholder base.
  • Increases research coverage.
  • Improves trading liquidity.
• Financial Flexibility:
  • Pro forma $55 million cash and $25 million debt as at December 31, 2019.
  • $31 million available from Argonaut’s existing revolving credit facility.
  • Improved credit potential from cash flow growth.

Pete Dougherty, President & CEO of Argonaut stated: “This is a transaction which makes sense for both sets of shareholders.  Combining complementary assets into one larger, more relevant company generates significant synergies.  With a solid production base of over 235,000 gold equivalent ounces expected this year, a strong balance sheet and strong cash flow generation at current gold prices, we will be well positioned to evaluate and execute on growth opportunities from within the combined company’s development asset portfolio.”