TORONTO, October 24, 2011 /PRNewswire/ --
Emergence of a New Leading Intermediate Gold Producer
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 ounces [ 1,2 ] 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