AuRico Gold and Northgate Minerals announced on August 29, 2011, a definitive acquisition agreement whereby AuRico will acquire Northgate in an all-share transaction. The agreement values Northgate at more than C$1.2 billion, based on AuRico share prices immediately following the announcement. The proposed transaction is subject to shareholder approval at AuRico and Northgate shareholder meetings scheduled for October 2011.
AuRico Gold was previously named Gammon Gold. The name change to AuRico Gold was effective June 14, 2011.
On receiving notice of the transaction, Primero Mining, which had announced an agreed transaction to acquire Northgate in mid-July 2011, waived its right to match the AuRico offer.
AuRico and Northgate combined will have five operating gold mines, a sixth mine targeting production in 2012, and three gold development projects. The combined company would have production totaling about 475,000 gold equivalent oz in 2011 and expected growth to 730,000 gold equivalent oz in 2013. Combined resources total about 19 million gold equivalent oz, excluding copper.
AuRico’s head office is in Toronto, Canada. Its assets include the Ocampo, El Chanate and El Cubo operating mines in Mexico. Projects include the Guadalupe y Calvo and the Orion advanced development projects, and six exploration properties, all in Mexico.
Northgate is headquartered in Vancouver, Canada. The company 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 oz of gold beginning in 2012.
Northgate has also announced positive results of a NI 43-101 preliminary assessment of its 100%-owned Kemess Underground project in north-central British Columbia. The report outlines development of an underground block/panel cave operation, producing an average of 95,000 oz/y of gold and 41.4 million lb/y of copper over a mine life of about 12 years.