Alamos buying Wawa mine: Richmont's Island Gold Mine was a prized target of Toronto miner.

• Position: MINING

Alamos Gold is proposing a friendly acquisition of Richmont Mines' flagship Island Gold Mine in a $933-million all-stock deal.

The Wawa-area mine is touted by Alamos as a high-grade, low-cost producer with plenty of upside to add ounces over the next few years.

"We're adding a high-quality asset in a great jurisdiction," said Alamos Gold president-CEO John McCluskey in a Sept. 11 conference call with analysts.

If the transaction is finalized this fall, he places Island Gold as a top-three operating asset that would propel Alamos among the top 10 North American gold miners, capable of producing more than 500,000 ounces a year.

"The addition of Island Gold elevates Alamos to a new level, solidifying its position as a leading intermediate gold producer," said McCluskey in his remarks.

Shareholder meetings at both companies to approve the transaction took place in mid-November.

Island Gold is located 83 kilometres northeast of Wawa and 15 kilometres from Dubreuilville. Commercial production began in October 2007 with 430,000 ounces produced in the decade since.

Alamos operates the Young Davidson mine near Matachewan. It's a six-hour drive between the two northeastern Ontario operations.

Alamos also owns the Mulatos and El Chanate mines in Mexico and has several gold prospects in the project pipeline in Canada, U.S., Mexico and Turkey, including its Lynn Lake gold deposit in Manitoba which is at the feasibility study stage.

The deal only involves the Island Gold Mine. Richmont announced it's selling off its Quebec properties, including its Beaufor Mine.

Island Gold is considered to have significant exploration potential as less than 15 per cent of the entire 7,700-hectare land package has been drilled off.

A mine and mill expansion is underway with ore production scheduled to increase from 930 tonnes per day to 1,100 tonnes over the next few years. Exploration along strike and at depth will add more reserves to the underground ramp and stope operation.

McCluskey said the courtship process involving Richmont Mines president Renaud Adams began in 2015.

McCluskey had long admired the "phenomenal job" Adams was doing at...