AuRico Gold Completes Acquisition of Northgate Minerals Corporation
TORONTO, Oct.
26, 2011 /CNW/ - AuRico Gold Inc.
(TSX:AUQ) (NYSE:AUQ) ("AuRico") is
pleased to announce that it has completed its previously announced
acquisition of Northgate Minerals Corporation (TSX:NGX) (NYSE-Amex:NXG)
("Northgate").
With
the completion of this strategic acquisition, AuRico is now positioned
as a new leading intermediate gold producer with five operating mines
and Young-Davidson targeting production at the end of Q1 2012.
Ocampo
and Young-Davidson alone have the potential to produce over 500,000 gold
equivalent ounces at lowest quartile cash costs.
With a strong balance
sheet and a robust and growing cash flow profile, the new company is led
by an experienced management team with a proven track record of
creating value in the industry.
"We
are pleased to complete this transformational acquisition and begin to
leverage the potential of our expanded asset base.
The combination of
our key assets significantly expands our production profile and
establishes the company as a leading intermediate, low cost producer
with a substantial growth platform and a compelling valuation
opportunity," stated Rene Marion, President and Chief Executive Officer
of AuRico.
The
acquisition was carried out by way of a plan of arrangement pursuant to
the provisions of the Business Corporations Act (British Columbia) and
was approved by the Supreme Court of British Columbia. Shareholders of
both AuRico and Northgate voted overwhelmingly in favour to approve
AuRicos acquisition of Northgate at their respective special meetings
of shareholders each held on October 24, 2011.
Under the terms of the
acquisition, AuRico, among other things, acquired all of the issued and
outstanding common shares of Northgate on the basis of 0.365 AuRico
common shares for each common share of Northgate.
In connection with the
acquisition, AuRico will amalgamate with Northgate and Northgate will
be delisted from trading on the TSX and NYSE Amex effective Wednesday,
October 26, 2011.
AuRicos
lead financial advisor for the transaction was UBS Securities Canada
Inc.
and AuRicos legal counsel was Fasken Martineau DuMoulin LLP.
UBS
Securities Canada Inc.
provided a fairness opinion to the Board of
Directors of AuRico.
Northgates
lead financial advisor for the transaction was GMP Securities L.P.
and
Northgates legal counsel was Torys LLP.
GMP Securities L.P.
and
Macquarie Capital Markets Canada Ltd.
provided fairness opinions to the
Special Committee and Board of Directors of Northgate.
About AuRico Gold:
AuRico
Gold is a leading intermediate Canadian gold and silver producer with a
diversified portfolio of high quality mines and projects in Canada,
Mexico and Australia.
The Company currently has five operating
properties including the Ocampo mine in Chihuahua State, the El Chanate
mine in Sonora State, the El Cubo mine in Guanajuato State, as well as
the Fosterville and Stawell gold mines in Victoria, Australia.
The first
production from the exciting Young-Davidson gold mine in northern
Ontario is expected by the end of Q1 2012 as the mine ramps up
production to over 200,000 ounces of annual production by 2014.
AuRicos
strong pipeline of development and exploration stage projects includes
advanced development properties in Mexico and British Columbia and
several highly prospective exploration properties in Mexico.
AuRicos
head office is located in Toronto, Ontario, Canada.
Cautionary Statement
Cautionary
Note to US Investors - The United States Securities and Exchange
Commission (the "SEC") permits US mining companies, in their filings
with the SEC, to disclose only those mineral deposits that a company can
economically and legally extract or produce.
This press release uses
certain terms, such as "measured", "indicated" and "inferred"
"resources", that the SEC guidelines strictly prohibit US registered
companies from including in their filings with the SEC.
US investors are
urged to consider closely the disclosure in AuRicos Annual Report on
Form 40-F, which may be secured from AuRico or from the SECs website at
http://www.sec.gov.
No
stock exchange, securities commission or other regulatory authority has
approved or disapproved the information contained herein.
Certain
statements included herein, including information as to the future
financial or operating performance of AuRico or Northgate, their
respective subsidiaries and their respective projects, constitute
forward-looking statements.
The words believe, expect,
anticipate, target, continue, estimate, may, and
similar expressions identify forward-looking statements.
Forward-looking
statements include, among other things, statements regarding the
anticipated closing of the AuRico-Northgate transaction and the timing
thereof, the anticipated benefits of the AuRico-Northgate transaction
including the ability to create value therefrom anticipated future
financial and operational performance, the future price of gold and
silver and the ratio of their prices, the de-risking of operations,
future exploration results of its exploration and development programs
and the success of AuRico or Northgates exploration approaches, AuRico
or Northgates ability to delineate additional resources and reserves as
a result of such programs, statements regarding their respective
financial exposure to litigation, targets, estimates and assumptions in
respect of gold and silver production and prices, operating costs,
results and capital expenditures, mineral reserves and mineral resources
and anticipated grades, recovery rates, future financial or operating
performance, margins, operating and exploration expenditures, costs and
timing of completion of the Ocampo expansion program and improvements to
the heap leach pad, costs and timing of the development and
commencement of production of new deposits, costs and timing of
construction, costs and timing of future exploration and reclamation
expenses, including anticipated 2011 results, operating performance
projections for 2011, AuRico or Northgates ability to fully fund their
respective business model internally, 2011 gold and silver production
and the cash and operating costs associated therewith, the ability to
achieve productivity and operational efficiencies, and the timing of
each thereof.
Forward-looking statements are necessarily based upon a
number of estimates and assumptions that, while considered reasonable by
the Company, are inherently subject to significant business, economic,
competitive, political and social uncertainties and contingencies.
The
operating and financial performance of the Company will be affected by
changes in the actual gold equivalency ratio realized in 2011.
Many
factors could cause the Companys actual results to differ materially
from those expressed or implied in any forward-looking statements made
by, or on behalf of, AuRico or Northgate.
Such factors include, among
others, known and unknown uncertainties and risks relating to additional
funding requirements, reserve and resource estimates, commodity prices,
hedging activities, exploration, development and operating risks,
illegal miners, political and foreign risk, uninsurable risks,
competition, limited mining operations, production risks, environmental
regulation and liability, government regulation, currency fluctuations,
recent losses and write-downs, restrictions in any of AuRico and
Northgates loan facilities, dependence on key employees, possible
variations of ore grade or recovery rates, failure of plant, equipment
or process to operate as anticipated, accidents and labour disputes.
Investors are cautioned that forward-looking statements are not
guarantees of future performance and, accordingly, investors are
cautioned not to put undue reliance on forward-looking statements due to
the inherent uncertainty therein.
This
news release shall not constitute an offer to sell or a solicitation of
an offer to buy any securities, and shall not constitute an offer,
solicitation or sale in any state or jurisdiction in which such an
offer, solicitation or sale would be unlawful. The securities to be
offered by AuRico have not been and will not be registered under the
United States Securities Act of 1933, as amended (the "U.S.
Securities
Act"), or any state securities laws and may not be offered or sold in
the United States absent registration or an applicable exemption from
the registration requirements of the U.S.
Securities Act. AuRico
intends to offer and sell its securities in the United States pursuant
to the exemption from registration set forth in Section 3(a)(10) of the
U.S.
Securities Act.
For further information:
For further information please visit the AuRico Gold website at http://www.auricogold.com or contact:
Anne Day | | | Keren Yun |
Director of Investor Relations | | | Director of Investor Relations |
AuRico Gold Inc. | | | Northgate Minerals Corporation |
647-260-8880 | | | 416-216-2781 |