Uh, Jay, sorry about NXG, it is too late. Bought out.
finance.yahoo.com
Up 37% today.
Nice.
TORONTO (Reuters) - AuRico Gold ( AUQ.TO), a Mexico-focused gold miner in a drive to reposition itself, said on Monday it would buy Northgate Minerals ( NGX.TO) in an all-stock deal worth C$1.46 billion ($1.5 billion).
The acquisition is the latest in a string of deals involving Canadian gold miners as prices for the metal climb faster than even many of the most bullish forecasts.
If approved, the deal would see AuRico's gold resource rise from 10.3 million gold equivalent ounces to almost 19 million. Annual production would increase to 470,000 ounces in 2011 from 280,000, and the combined output would be more than 730,000 ounces by 2013.
AuRico, whose name is a combination of the letters "Au", the atomic symbol for gold, and "Rico", the Spanish word for rich, changed its name from Gammon Gold in May, a month after buying Capital Gold for C$420 million. That followed a drawn out battle for the company with smaller rival Timmins Gold ( TMM.TO).
Under the terms of the agreement, Toronto-based AuRico will pay 0.365 of a common share for each Northgate common share. When the deal was announced, prior to the market open, the offer was worth about C$5.01 a share, or C$1.46 billion in total. That fell to C$4.37 a share, or C$1.26 billion, after the open.
Shares of AuRico Gold dropped 13.27 percent early Monday in Toronto to C$11.90, while Northgate jumped 37 percent to C$4.24.
"We have a new set of peers in our group and we think there's a huge opportunity for a great re-rating story going forward," Chief Executive Rene Marion told analysts following the deal. "We think we'll be one of the fastest growing mid-tier companies out there."
The acquisition of Northgate, which is building the promising Young-Davidson gold mine in northern Ontario, spoiled plans by Northgate to acquire Primero Mining ( P.TO) in July for C$370 million.
Northgate, a gold and copper producer with operations and projects in the Americas and Australia, has 291.98 million shares outstanding and had a market capitalization of about C$922 million before the AuRico deal was announced, according to Thomson Reuters data.
AuRico has a market capitalization of about C$2.38 billion, with 173.18 million shares outstanding.
The deal will combine Northgate's Fosterville and Stawell gold mines in Australia with AuRico's Ocampo, El Chanate and El Cubo mines in Mexico.
Primero will be paid a termination fee of C$25 million by Northgate.
UBS Securities Canada Inc was the financial adviser for AuRico, while GMP Securities L.P. advised Northgate. |
