Emergence of a New Leading Intermediate
Gold Producer
TORONTO,
Oct. 24, 2011 /PRNewswire/ -
AuRico Gold Inc. (TSX:AUQ) (NYSE:AUQ) ("AuRico") and
Northgate Minerals Corporation (TSX:NGX) (NYSE-Amex:NXG)
("Northgate") are pleased to announce that shareholders of both
companies have voted overwhelmingly in favour of the acquisition of
Northgate by AuRico at their respective special meetings held
earlier today. Shareholders of AuRico voted 99.1 percent in favour
of the transaction while Northgate shareholders voted 98.6 percent
in favour. The transaction is expected to close on October 26, 2011.
"We are pleased that shareholders of both
companies have sent a clear message in support of the transaction.
The combination of the companies will create a new leading
intermediate gold producer with a robust production profile, a low
cost base, an attractive growth platform and a compelling
valuation," stated Rene Marion,
President and Chief Executive Officer of AuRico. "Our proven
management teams will immediately focus attention on leveraging the
potential of our expanded asset base to create value for our
shareholders."
"We greatly appreciate the support of our
shareholders in approving the transaction with AuRico. The
Management team and the Board of Northgate firmly believe that this
transaction will create a platform of value creation for
shareholders in the months and years to come," stated Richard Hall, President and Chief Executive
Officer of Northgate. "The combined company has a bright future and
will be led by a strong and experienced management team with a
proven track record in the industry."
Transaction Highlights:
- Northgate shareholders will be entitled to receive 0.365 of an
AuRico common share for each Northgate common share.
- Emergence of a new leading intermediate gold company with
expected 2011 production of 475,000 Aue ounces1,2 and
peer leading growth of approximately 54% to 730,000+3
Aue ounces by 2013
- Large resource base of approximately 19 million gold equivalent
ounces (excluding copper)
- Five operating mines, a sixth targeting production at the end
of Q1 2012, with 2 cornerstone assets in Ocampo and Young-Davidson that alone have the potential to
produce over 500,000 gold equivalent ounces at lowest quartile cash
costs
- Fully un-hedged exposure to record gold and silver prices
generating significant free cash flows
- Strong balance sheet
- Experienced management team with a proven track record of
building and operating
- Geopolitically diversified asset portfolio across three of the
most attractive mining jurisdictions (Mexico, Canada, and Australia)
- Adding together the midpoints of AuRico's production guidance
(265,000 - 295,000 gold equivalent ounces) and Northgate's
production guidance (190,000 - 200,000 gold ounces)
- Gold equivalent ounces include silver ounces produced and sold
converted to gold equivalent based on AuRico's long-term gold
equivalency ratio of 55:1
- As per street consensus
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
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. AuRico's strong pipeline of
development and exploration stage projects include the Guadalupe y
Calvo advanced development property in Chihuahua State and the
Orion advanced development property in Nayarit State, along with several exploration
properties throughout Mexico.
AuRico's head office is located in Toronto, Ontario, Canada.
About Northgate Minerals:
Northgate Minerals Corporation is a gold and
copper producer with mining operations, development projects and
exploration properties in the Americas and Australia. Northgate currently owns and
operates the Fosterville and
Stawell gold mines in Victoria
Australia, and is building the Young-Davidson gold mine in northern Ontario, which is targeting a 15-year mine
life with average annual production of 180,000 ounces of gold
commencing in 2012.
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 AuRico's Annual Report on Form 40-F,
which may be secured from AuRico or from the SEC's 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 Northgate's exploration
approaches, AuRico or Northgate's 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 Northgate's 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 Company's 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
Northgate's 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.
SOURCE AuRico Gold Inc.