Further to its bulletin dated Oct. 26, 2020, the Toronto Stock Exchange issued a bulletin in the morning of Oct. 28, 2020, to report that Argonaut Gold Inc.'s 4.625 per cent convertible senior unsecured debentures began trading on an if, as and when-issued basis at the open on Oct. 28, 2020, under the symbol AR.DB.U and Cusip No. 04016A AA 9. As stated in its final short form prospectus dated Oct. 27, 2020, the company will issue $50-million (U.S.) principal amount of debentures, in the minimum principal amount of $1,000 each, in an offering. It expects to close the offering before the open on Oct. 30, 2020.

According to the TSX, subject to the closing of the offering prior to the opening on Oct. 30, 2020: (i) all trades in AR.DB.U in the if, as and when-issued market on Oct. 28, 2020, and Oct. 29, 2020, will be for special settlement two business days after the trade date and will appear on the settlement report from CDS. Parties who are entitled to receive debentures under the offering may sell such securities in the if, as and when-issued market without being subject to restrictions on short sales. Parties who are not entitled to receive debentures under the offering must comply with the short sale rule in all respects for any sales they make in the if, as and when-issued market.

The TSX reports that trading in the debentures on an if, as and when-issued basis will be on an interest-flat basis as interest accrues on the debentures only if they are issued upon the closing of the prospectus offering. If and when the offering closes on Oct. 30, 2020, the debentures will be quoted and traded on an accrued interest basis. That is, all bids, offers and trades of the debentures will reflect only the capital portion of the debentures and will not reflect accrued interest. Accrued interest must be reflected in the seller's and buyer's settlement amounts, and must be reflected on the confirmation with clients.

Upon closing, the TSX will issue a bulletin to confirm: (i) the closing; and (ii) that the debentures will no longer trade on an if, as and when-issued basis but will trade thereafter on a regular settlement basis. If the offering does not close, all of the if, as and when-issued trades will be cancelled. No securities will be delivered and no money will be owed by purchasers to sellers.

According to the TSX, the debentures will mature on Nov. 30, 2025, and will bear interest at 4.625 per cent per year. Assuming the offering closes on Oct. 30, 2020, the initial interest payment of $26.98 (U.S.) per $1,000 (U.S.) principal amount will be made on May 31, 2021. The holders of the debentures will have the option to convert the debentures into common shares of the company at $2.86 (U.S.) per share, at any time prior to the close of business on the earliest of: (i) the business day immediately preceding the maturity date; (ii) if called for redemption, the business day immediately preceding the date fixed for redemption; or (iii) if called for repurchase pursuant to a change of control (as defined in the prospectus), the business day immediately preceding the payment date. This conversion price represents a conversion rate of 350.1155 common shares per $1,000 principal amount of debentures.