Alamos Gold Inc. and Esperanza Resources Corp. announced that they entered a definitive contract. Alamos would obtain all the issued and remaining common shares of Esperanza. This would be done through a court-approved plan of arrangement.

Esperanza was a precious metals exploration and enhancement corporation. It concentrated on improving its major asset, the Cerro Jumil gold project based in Morelos State, Mexico.

According to the agreement, Esperanza's stockholders would get Can$0.85 in cash for every common share. This would represent roughly 38% to the company's 30-day volume-weighted average price that ended on July 11 this year.

The deal valued Esperanza's equity at about Can$69.4 million on a money-basis. Moreover, the stockholders of Esperanza would be issued with Alamos's five million warrant. The warrants would then be listed for trading on the Toronto Stock Exchange.

"Alamos is very pleased to announce this transaction with Esperanza," President and Chief Executive Officer of Alamos, John McCluskey, said. "Esperanza is an excellent strategic fit within our existing portfolio and in our view, is one of the best undeveloped opportunities and significant open pit targets in Mexico. We have followed Esperanza's progress for some time and see this as a truly compelling opportunity for our shareholders. While the transaction represents less than 5% of our market capitalization, it has the potential to grow our production in Mexico by more than 50%, or nearly 30% on a consolidated basis."