Expert Analysis

Joe Mazumdar, Haywood Securities (10/16/12) "Prodigy Gold Inc. has agreed to a friendly combination with Argonaut Gold, a junior gold producer with its assets based in Mexico. Our valuation is based on the transaction value to Prodigy shareholders ($1.08). . .the estimated value represents a 70% premium to the price at our initiation ($0.63, November 1st, 2011) and an 8% premium to our previous target price ($1). . .the combined entity will provide higher liquidity, lower financing risk, diversified asset base (Mexico and Canada) with continued exposure to the Magino gold project (22% ownership of Newco) with a proven management team."

Don Blyth, Paradigm Capital (10/16/12) "Prodigy Gold Inc. and Argonaut Gold announced a friendly deal whereby Argonaut will acquire Prodigy in an all‐share deal. . .the deal values Prodigy at CA$1.08/share, and equates to a premium of 54% based on the 20‐day VWAP prices of both companies. . .our initial impressions are that the deal makes logical sense; Prodigy shareholders benefit from the immediate premium, as well as exposure to Argonaut's current gold production, while maintaining exposure to the Magino development going forward. . .most importantly, however, the deal substantially reduces the equity dilution risk that Prodigy shareholders faced in the status quo (go‐it‐alone) scenario."

Pope & Company Morning Notes (10/15/12) "Prodigy Gold Inc. and Argonaut Gold Inc. have entered into an agreement for Argonaut to acquire all of the shares of Prodigy by way of a plan of arrangement. The combined entity will benefit from the strong operating experience and cash flow of Argonaut and its ability to successfully advance Prodigy's Magino gold project, which has an indicated resource of more than 6 Moz. . .a PFS on Magino is expected in Q1/13."