(all amounts are in U.S. dollars unless otherwise
indicated)
TORONTO, Oct. 9, 2012 /PRNewswire/ - AuRico Gold Inc.
(TSX:AUQ) (NYSE: AUQ), ("AuRico Gold" or "the Company") is
pleased to announce that it has entered into a definitive agreement
pursuant to which Minera Frisco,
S.A.B. de C.V. ("Minera Frisco") will acquire the Ocampo mine and the adjacent exploration
projects "Venus" and "Los Jarros" all located in Chihuahua State,
Mexico and a 50% interest in the
Orion advanced development project located in Nayarit State, Mexico from AuRico
Gold, for a total cash consideration of $750 million (the "Transaction"). Minera Frisco (BMV: MFRISCO, OTC: MSNFY) is a
leading Mexican mining company that was spun out of Grupo Carso
S.A. de C.V. (BMV: GCARSO, OTC: GPOVY) in November 2010 and is listed on the Mexican Stock
Exchange with a current market capitalization of approximately
$10.7 billion. The transaction is
expected to close in December
2012.
Upon closing of the Transaction, the Company
expects to use the net proceeds from the Transaction to eliminate
certain debt obligations, invest in internal growth opportunities,
provide sufficient working capital and liquidity for the Company
going forward and to undertake a significant return of capital to
shareholders.
Scott Perry,
President and CEO of AuRico Gold
commented, "Minera Frisco presented
a compelling, all-cash offer that will strengthen the Company's
balance sheet and repositions AuRico to execute on its strategy of
delivering consistent, reliable and sustainable production from our
two core assets in Canada and
Mexico. The Transaction will allow
us to deliver a meaningful return of capital to our shareholders,
significantly enhance our liquidity position, give us considerable
financial flexibility to support our current operations and examine
brownfield expansion opportunities. Following the Transaction, the
Company will be well positioned to meet its key objectives of
growing its profitability and cash flow through the long life, low
cost Young-Davidson and El Chanate operations located in
low risk jurisdictions while maintaining a strong organic growth
profile primarily driven by increasing production at Young-Davidson. In addition, we have gained a solid
partner to further evaluate and potentially advance the Orion
project in the coming years through the joint venture with
Minera Frisco."
The Transaction is subject to certain closing
conditions, including a standard review by the competition and
anti-trust commission of Mexico
and the approval of a simple majority of Minera Frisco's shareholders. The Transaction is
not subject to any financing conditions.
Advisors and Counsel
Credit Suisse Securities (Canada), Inc. is retained by AuRico Gold to act as its financial advisor and
has provided a fairness opinion to AuRico's Board of Directors.
Credit Suisse Securities (Canada),
Inc. has provided an opinion that, based upon and subject to the
assumptions, limitations, and qualifications stated in such
opinion, the consideration to be received by the Company pursuant
to the Transaction is fair from a financial point of view to the
Company.
BMO Capital Markets and CIBC World Markets Inc.
are acting as financial advisors to the Special Committee of
AuRico's Board of Directors. BMO Capital Markets and CIBC World
Markets Inc. have each provided an opinion to the effect that, as
of the date of such opinion and subject to the assumptions,
limitations and qualifications contained in such opinion, the
consideration to be received by the Company pursuant to the
Transaction is fair, from a financial point of view, to the
Company.
Fasken Martineau LLP is acting as legal counsel
to AuRico and Davies Ward Phillips
& Vineberg LLP is acting as legal counsel to the Special
Committee of AuRico's Board of Directors.
AuRico Conference Call and Webcast:
AuRico will hold a conference call and webcast
on Wednesday, October 10, 2012
starting at 10:00 a.m. Eastern
Time.
Conference Call Access:
Canada & U.S. Toll Free: |
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1-888-231-8191 |
International & Toronto: |
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1-647-427-7450 |
Conference Call Webcast:
The conference call event will be broadcast live
on the internet via webcast. To access the webcast please follow
the link provided below:
http://www.newswire.ca/en/webcast/detail/1041071/1130903
Archive Call Access:
If you are unable to attend the conference call, a replay
will be available until midnight, October
24, 2012 by dialing the appropriate number below:
Local Toronto Participants:
1-416-849-0833 |
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Passcode: #34757319 |
North America Toll Free: 1-855-859-2056
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Passcode: #34757319 |
Archive Webcast:
The webcast will be archived for 90 days by following the
link provided below:
http://www.newswire.ca/en/webcast/detail/1041071/1130903
About AuRico
Gold
AuRico Gold is a leading
Canadian gold producer with a diversified portfolio of high quality
mines and projects in North
America that have significant production growth and
exploration potential. Following the divestiture of Ocampo, the Company will be focused on its
core operations including the Young-Davidson gold mine in northern Ontario which declared commercial production
on September 1st, 2012 and
the El Chanate mine in Sonora State. AuRico's strong project
pipeline also includes several advanced development opportunities
in Mexico and British Columbia. AuRico's head office is
located in Toronto, Ontario,
Canada.
Cautionary Statement
Certain information included in this
presentation constitutes forward-looking statements, including any
information as to our projects, plans and future financial and
operating performance. All statements, other than statements of
historical fact, are forward-looking statements. The words
"expect", "believe", "anticipate", "will", "intend", "estimate",
"forecast", "budget", "schedule" and similar expressions identify
forward-looking statements. Forward-looking statements are
necessarily based upon a number of factors and assumptions that,
while considered reasonable by management, are inherently subject
to significant business, economic and competitive uncertainties and
contingencies. Known and unknown factors could cause actual results
to differ materially from those projected in the forward-looking
statements.
Such factors include, but are not limited to:
changes to current estimates of mineral reserves and resources;
fluctuations in the price of gold and silver; changes in foreign
exchange rates (particularly the Canadian dollar, Mexican peso and
U.S. dollar); the impact of inflation; changes in our credit
rating; employee relations; litigation; disruptions affecting
operations; availability of and increased costs associated with
mining inputs and labor; development delays at the Young-Davidson mine; technical challenges associated
with the construction of capital projects; operating or technical
difficulties in connection with mining or development activities;
inherent risks associated with mining and mineral processing; the
risk that the Young-Davidson, El Chanate and Ocampo mines and may not perform as planned;
the ability to realize the perceived benefits from the acquisition
of Capital Gold and Northgate; uncertainty with the Company's
ability to secure capital to execute its business plans; the
speculative nature of mineral exploration and development,
including the risks of obtaining necessary licenses and permits;
contests over title to properties; changes in national and local
government legislation in Canada,
Mexico and other jurisdictions in
which the Company may carry on business in the future; risk of loss
due to sabotage and civil disturbances; the impact of global
liquidity and credit availability and the values of assets and
liabilities based on projected future cash flows; risks arising
from holding derivative instruments; business opportunities that
may be pursued by, the company; the ability of Frisco to obtain
necessary approvals to complete the acquisition of the Ocampo mine and the ability of both parties to
complete the transaction. Many of these uncertainties and
contingencies can affect our actual results and could cause actual
results to differ materially from those expressed or implied in any
forward-looking statements made by, or on behalf of, us. Readers
are cautioned that forward-looking statements are not guarantees of
future performance. All of the forward-looking statements made in
this press release are qualified by these cautionary statements.
Specific reference is made to the most recent Form 40-F/Annual
Information Form on file with the SEC and Canadian provincial
securities regulatory authorities for a discussion of some of the
factors underlying forward-looking statements.
The Company disclaims any intention or
obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise,
except as required by applicable law.
SOURCE AuRico Gold Inc.