11:08 AM EDT, 07/15/2024 (MT Newswires) -- Alamos Gold ( AGI ) said Monday it eliminated more than half of the Argonaut Gold's ( ARNGF ) hedge book and associated mark-to-market liability, providing Alamos with increased exposure to rising gold prices.

Alamos received US$116 million by delivering 49,384 ounces in 2025 under a gold sale prepayment agreement.

The company, which last week closed its US$325-million acquisition of Argonaut, used the proceeds eliminate gold forward purchase contracts previously entered into by Argonaut totaling 179,417 ounces in 2024 and 2025 with an average price of US$1,838 per ounce.

Alamos will continue to review opportunities to unwind the remaining Argonaut hedge book totaling 150,000 ounces in 2026 and 2027.

"This transaction has significantly enhanced our exposure to rising gold prices on attractive terms, most notably in the near term," said John McCluskey, Alamos' chief executive. "With the majority of the Argonaut hedge book now eliminated, we are even better positioned to capitalize on the favorable outlook for gold."

National Bank reiterated its outperform rating and $26.50 price target following the news.

The bank said in a Monday note that Alamos' move was "prudent" as it would increase its near-term price exposure to rising gold prices.

Alamos shares were last seen up $0.18 to $24.20 on the Toronto Stock Exchange.

Price: 24.17, Change: +0.15, Percent Change: +0.62