Northgate Minerals Corp
Symbol NGX
Shares Issued 214,731,597
Close 2006-05-19 C$ 4.05
Recent Sedar Documents
Northgate Minerals to make offer for Aurizon Mines
2006-05-23 08:54 ET - News Release
Also News Release (C-ARZ) Aurizon Mines Ltd
Mr. Ken Stowe of Northgate reports
NORTHGATE MINERALS CORPORATION ANNOUNCES OFFER FOR ALL OUTSTANDING SHARES OF AURIZON MINES LTD.
Northgate Minerals Corp., together with a wholly owned subsidiary, will make an offer to acquire all the outstanding shares of Aurizon Mines Ltd. Aurizon shareholders will be offered 0.741 of a Northgate common share for each Aurizon common share, which implies an offer price of $3.00 per share (based on Northgate's May 19, 2006, closing price on the Toronto Stock Exchange of $4.05). The offer represents a premium of 30.5 per cent over the May 19, 2006, closing price of Aurizon's shares on the TSX.
Offer highlights:
The proposed business combination will create a leading Canadian focused, mid-tier, gold miner with a market capitalization of more than $1-billion (U.S.), strong cash flow, proven operating expertise, large resource base and exciting growth prospects.
Aurizon shareholders will receive 0.741 of a Northgate share for each Aurizon share, which implies an offer price of $3.00 per share (based on Northgate's May 19, 2006, closing price on the TSX of $4.05).
The offer price represents a substantial premium of 30.5 per cent based on Aurizon's and Northgate's May 19, 2006, closing prices on the TSX, and a 30.5-per-cent premium based on the volume weighted average closing prices of Aurizon's and Northgate's common shares over the last 10 trading days on the TSX.
Northgate's solid balance sheet and the substantial free cash flow generated by the Kemess South mine will backstop the commissioning of the Casa Berardi mine and provide financial flexibility going forward.
The transaction is expected to benefit shareholders of both companies by creating a combined entity with two operating mines, a variety of near-term organic growth opportunities within three Canadian mining camps and the financial capability to bring these opportunities into production.
Ken Stowe, Northgate's president and chief executive officer, stated: "The offer that we will make in the coming days provides significant value to Aurizon's shareholders by providing them with a substantial premium to Aurizon's closing share price on May 19, 2006. In addition, Aurizon shareholders will have the opportunity to participate in a much larger gold mining company with a diversified Canadian asset base, including two operating gold mines, annual gold production of close to half a million ounces, and the financial capability to develop a variety of additional gold mining projects over the next few years. The combination of Northgate and Aurizon will result in a Canadian gold mining company with demonstrated management and operating expertise in both open pit and underground mining, and provide both Northgate and Aurizon shareholders with an excellent platform for continued value creation."
Overview of the combined company
The combination of Northgate and Aurizon will create a leading mid-tier gold producer with two producing gold mines in Canada and a market capitalization exceeding $1-billion (U.S.). The New Northgate will have the management expertise and financial capability to efficiently finance current development projects and capitalize on other growth opportunities.
Production
The New Northgate will have estimated production for 2007 of approximately 480,000 ounces of gold and approximately 84 million pounds of copper from the Kemess South mine and the Casa Berardi mine.
Reserves and resources
The New Northgate will have 6.7 million ounces of proven and probable gold reserves, 3.9 million ounces of measured and indicated resources, and 2.2 million ounces of inferred resources based on the respective 2005 year-end figures of Northgate and Aurizon's feasibility study for Casa Berardi. The New Northgate will also have proven and probable copper reserves of 1.8 billion pounds, with an additional 0.9 billion pounds of copper in the measured and indicated category as at Dec. 31, 2005.
Growth opportunities
Northgate currently has two advanced Canadian development projects, the Kemess North project in north-central British Columbia and the Young-Davidson project in Northern Ontario. Kemess North is currently in the permitting process. A surface-based diamond drilling program is in progress at Young-Davidson and in April, 2006, Northgate accelerated the development of the property by committing funds to design and permit an advanced underground exploration program. With the addition of the strong development and operating team at the Casa Berardi mine, the New Northgate will be well positioned to develop future growth opportunities.
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