QualityStocks would like to highlight AuRico Gold Inc. (NYSE: AUQ). AuRico Gold is a leading intermediate Canadian gold and silver producer with a diversified portfolio of high quality mines and projects in Mexico. The Company's three wholly-owned operating properties include the Ocampo mine in Chihuahua State, the El Chanate mine in Sonora State and the El Cubo mine in Guanajuato State.
In the company’s news yesterday,
AuRico Gold, in conjunction with Northgate Minerals Corp. (NYSE AMEX: NXG), announced entry into a definitive acquisition agreement whereby a new, leading intermediate gold production company will emerge.
President and CEO of AUQ, Rene Marion, described the resulting fusion of AuRico and Northgate as constituting a formidable force in the sector and will immediately position the “combined company as a pre-eminent intermediate gold producer with peer leading growth.” Marion was quite happy to point out the striking similarities between the two companies in terms of assets, projects and people, asserting that the logistical match-up would go swimmingly.
President and CEO of Northgate, Richard Hall, concurred wholeheartedly with his colleague at AUQ, highlighting the quality of the deal as a huge opportunity, both for Northgate shareholders and the market. Hall underscored the hard work Northgate personnel have put in, developing a strong portfolio of mineral properties in Canada and Australia, outlining the obvious production synergies this deal will create.
Highlights of the resulting business structure:
• Five operational gold mines with a sixth coming online in 2012
• Three promising gold development projects in Mexico, Canada and Australia, noted as being three of the top global hotspots for ideal mining jurisdictions
• Roughly 54% boost in production from 475k gold-equivalent ounces in 2012, to 730k in 2013 (based on combined midpoints of the production guidance from both companies)
Details of the agreement:
• AUQ will acquire all outstanding common shares of Northgate at a ratio of 0.365:1, a 45% premium to Northgate’s shareholders. (Based on the Aug. 26, 2011, TSX 20-day volume weighted average prices of both companies)
• Unanimous approval from the Board of each company will be executed via court approved plan of arrangement, with UBS Securities Canada Inc. and GMP Securities L.P. providing oversight
• The agreement would supersede a previous arrangement between Northgate and Primero Mining Corp. (announced on July 13, 2011), because according to Northagate the AUQ agreement is a “superior proposal” (decision reached by Northgate on Aug. 28, 2011). Northgate has subsequently paid the $25M termination fee and terminated the Primero agreement.
• The Sept. 21, 2011 Northgate Shareholders Meeting has been postponed until Oct. 2011, in order to allow for transaction approval via a required sixty six and two-thirds percent vote. A similar meeting will be held by AUQ on the same date in order to obtain a majority shareholder approval.
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Forward-Looking Statement:
This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Risks and uncertainties applicable to the company and its business could cause the company's actual results to differ materially from those indicated in any forward-looking statements.
