TORONTO, Dec. 22, 2014 /CNW/ - AuRico Gold Inc. (TSX: AUQ) (NYSE: AUQ), ("AuRico" or the "Company") today announced that it has entered into an
agreement with Crocodile Gold providing for termination of the deferred
cash payment arrangement with Crocodile Gold that was previously
established in 2012 and its replacement with a revised agreement that
provides both parties with a more satisfactory and mutually beneficial
arrangement. Completion of the transaction is subject to final approval
from the Foreign Investment Review Board ("FIRB") of Australia.
Under the terms of the previous arrangement, AuRico was entitled to
receive deferred cash payments based on net free cash flow derived from
the Fosterville and Stawell gold mines. Under the new agreement,
Crocodile Gold will pay AuRico C$20 million in cash immediately upon
closing and will grant AuRico a net smelter return ("NSR") royalty of
2% from Fosterville Gold Mine and 1% from Stawell Gold Mine.
"AuRico is pleased with the revised agreement as it immediately
monetizes potential future payments by securing a significant C$20
million upfront payment while retaining potential upside through the
NSR arrangement", stated
Scott Perry
, President and CEO of AuRico Gold.
About AuRico Gold
AuRico Gold is a leading Canadian gold producer with mines and projects
in North America that have significant production growth and
exploration potential. The Company is focused on its core operations
including the cornerstone Young-Davidson gold mine in northern Ontario,
and the El Chanate mine in Sonora State, Mexico. AuRico's project
pipeline also includes the advanced development Kemess Underground
Project in northern British Columbia and the Lynn Lake Gold Camp in
northern Manitoba. The Company also has other exploration opportunities
in Canada and Mexico. AuRico's head office is located in Toronto,
Ontario, Canada.
Cautionary Statement
This press release contains forward-looking statements and
forward-looking information as defined under Canadian and U.S.
securities laws. All statements, other than statements of historical
fact, are forward-looking statements. The words "expect", "believe",
"anticipate", "will", "intend", "estimate", "forecast", "budget" and
similar expressions identify forward-looking statements.
Forward-looking statements include estimates of mineral grades, the
estimated extent and timing of anticipated future exploration activity;
the results of future interpretation of geological information; whether
results thereof will lead to estimated reserves or resources and the
timing of such estimates , information as to strategy, plans or future
financial or operating performance, such as the Company's expansion
plans, project timelines, production plans, projected cash flows or
capital expenditures, cost estimates, projected exploration results,
reserve and resource estimates and other statements that express
management's expectations or estimates of future performance.
Forward-looking statements are necessarily based upon a number of
factors and assumptions that, while considered reasonable by
management, are inherently subject to significant 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 without limitation: receiving Foreign
Investment Review Board of Australia approval related to the
transaction, estimates of mineral grades; the estimated extent and
timing of future exploration activity and resource estimates; the
interpretation of geological information; whether exploration results
will lead to establishing reserves or resources; the nature and timing
of permitting work; the risk that projects will not be developed
accordingly to established budgets or timelines; no material delays in
the timing for completion of exploration activities, changes in laws
or regulations in Canada, Mexico and other jurisdictions in which the
Company may carry on business; risks of obtaining necessary licenses,
permits; authorizations or approvals for operations or projects such as
Kemess; contests over title to properties; the speculative nature of
mineral exploration and development; risks related to aboriginal title
claims; compliance risks with respect to current and future
environmental regulations; fluctuations in the price of gold and
foreign exchange rates; the uncertainty of replacing depleted reserves;
the risk that the Young-Davidson and El Chanate mine may not perform as
planned; uncertainty of production and cost estimates; disruptions
affecting operations; opportunities that may be pursued by the Company;
employee relations; availability and costs of mining inputs and labor;
the ability to secure capital to execute business plans; volatility of
the Company's share price; any decision to declare dividends; the
implementation and continued availability of the dividend reinvestment
plan; the effect of future financings; litigation; risk of loss due to
sabotage and civil disturbances; the values of assets and liabilities
based on projected future cash flows; risks arising from holding
derivative instruments; risks arising from the absence of hedging;
adequacy of internal control over financial reporting; changes in our
credit rating; and the impact of inflation.
Actual results and developments are likely to differ, and may differ
materially, from those expressed or implied by the forward-looking
statements contained herein. There is no assurance or certainty that an
initial resource estimate for Kemess East will be completed, or if
completed, is completed in early 2015. Such statements are based on a
number of assumptions which may prove to be incorrect, including
assumptions about: future exploration and the results of such
exploration, the ability and timing to complete a resource estimate for
Kemess East, the presence of and continuity of metals at Kemess East
at modeled grades, business and economic conditions; commodity prices
and the price of key inputs such as labour, fuel and electricity;
credit market conditions and conditions in financial markets generally;
revenue and cash flow estimates, production levels, development
schedules and the associated costs; our ability to procure equipment
and supplies in sufficient quantities and on a timely basis; the timing
of the receipt of permits and other approvals for our projects and
operations; our ability to attract and retain skilled employees and
contractors for our operations; the accuracy of our reserve and
resource estimates; the impact of changes in currency exchange rates on
our costs and results; interest rates; taxation; and our ongoing
relations with our employees and business partners.
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.