TORONTO, Nov. 11, 2014 /CNW/ - AuRico Gold Inc. (TSX: AUQ) (NYSE: AUQ), ("AuRico" or the "Company") today announced that it has entered into an
agreement to subscribe for 70,600,000 common shares of Carlisle
Goldfields Limited ("Carlisle"), at a price of C$0.08/share, for total
consideration of approximately C$5.6 million (the "Private Placement"),
subject to certain conditions including approval of the Toronto Stock
Exchange. On closing of the Private Placement, AuRico will hold own
70,600,000 common shares of Carlisle, representing approximately 19.9%
of the issued and outstanding common shares of Carlisle on a
non-diluted basis.
In conjunction with the Private Placement, AuRico has entered into a
joint venture agreement with respect to Carlisle's Lynn Lake Gold Camp
("Lynn Lake" or the "Project"), located in Lynn Lake, Manitoba,
pursuant to which AuRico will acquire a 25% interest in the Project for
an initial cash contribution of C$5 million, with the option to earn up
to an additional 35% interest by funding C$20 million on the Project
over a three-year period and delivering a feasibility study within that
time period. Lynn Lake is a highly prospective past-producing gold camp
consisting of five near surface deposits with significant existing
infrastructure in place.
"This transaction with Carlisle represents a compelling, but low risk
opportunity to participate in the early stage advancement of a highly
prospective mining district in Canada and is consistent with our
strategic focus on high-quality assets in North America," stated
Scott
Perry
, President and CEO.
Readers should refer to the section entitled "Early Warning Disclosure"
provided in Appendix A at the end of this press release.
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 Young-Davidson gold mine in northern Ontario, and the El
Chanate mine in Sonora State, Mexico. AuRico's project pipeline also
includes advanced development opportunities in Mexico and Canada.
AuRico's head office is located in Toronto, Ontario, Canada.
Cautionary Statement
This press release contains certain information that constitutes
"forward-looking information" and "forward-looking statements" as
defined under Canadian and U.S. securities laws. All statements in this
press release, other than statements of historical fact, are
forward-looking statements. The words "expect", "believe",
"anticipate", "contemplate", "may", "could", "will", "intend",
"estimate", "forecast", "target", "budget", "schedule" and similar
expressions identify forward-looking statements. Forward-looking
information in this press release include without limitation, among
other things, statements regarding the anticipated benefits of the
transaction, anticipated future financial and operational performance,
the future price of gold and silver, the success of exploration
activities, the Company's ability to delineate additional resources and
reserves as a result of such programmes, the completion of a
feasibility study within the indicated timeframe, statements regarding
the advancement of the Lynn Lake district, mineral reserves and mineral
resources and anticipated grades, exploration expenditures, costs and
timing of any future development, costs and timing of future
exploration exploration and the Company's intentions regarding its
investment in Carlisle.
Forward-looking statements are necessarily based upon a number of
factors and assumptions that, while considered reasonable by management
at the time of making such statements, 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 and assumptions underlying the forward-looking
statements in this press release include, but are not limited to:
changes to current estimates of mineral reserves and resources;
fluctuations in the price of gold; changes in foreign exchange rates
(particularly the Canadian dollar and U.S. dollar); the impact of
inflation; changes in our credit rating; employee and contractor
relations; litigation; operating or technical difficulties in
connection with the joint venture; 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 does or 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,
as well as those factors discussed under "Risk Factors" in the
Company's most recent Annual Information Form.
Actual results and developments are likely to differ, and may differ
materially, from those expressed or implied by the forward-looking
statements contained in this press release. Such statements are based
on a number of assumptions which may prove to be incorrect, including,
but not limited to, the assumptions set forth in our most recent Form
40-F/Annual Information Form. 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.
There can be no assurance that forward-looking statements or information
will prove to be accurate, accordingly, investors should not place
undue reliance on the forward-looking statements or information
contained herein. 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.
APPENDIX A
Early Warning Disclosure
As of the date hereof, AuRico does not own any securities of Carlisle.
For purposes of calculating the percentage of common shares of Carlisle
that will be owned by AuRico, AuRico has assumed that there will be
284,171,860 common shares of Carlisle outstanding prior to completion
of the Private Placement, as disclosed by Carlisle in the subscription
agreement governing the terms and conditions of the Private Placement.
The Private Placement will be undertaken in reliance upon the
accredited investor exemption available under applicable Canadian
securities laws.
AuRico acquired ownership of the common shares of Carlisle that are the
subject of this press release for investment purposes. AuRico intends
to review its investments in Carlisle on a continuing basis. In
connection with the Private Placement, AuRico and Carlisle entered into
an investor rights agreement, pursuant to which, among other things,
AuRico shall have the right to (i) appoint two members to the board of
directors of Carlisle, (ii) participate in future equity financings of
Carlisle in order to maintain its pro rata ownership interest, and
(iii) match any strategic proposal (as defined in the investor rights
agreement) proposed by a third party. In addition, pursuant to the
investor rights agreement, AuRico has agreed not to acquire more than
19.9% of the common shares of Carlisle until November 5, 2016, subject
to customary conditions. Depending on various factors including,
without limitation, Carlisle's financial position, the price levels of
the common shares of Carlisle, conditions in the securities market,
general economic and industry conditions, AuRico's business or
financial condition and standstill obligation to Carlisle and other
factors and conditions that AuRico may deem relevant, AuRico may in the
future take such actions with respect to its investment in Carlisle as
AuRico deems appropriate including, without limitation, making
proposals to Carlisle concerning changes to the capitalization,
ownership structure or operations of Carlisle, acquiring common shares
of Carlisle or selling or otherwise disposing of some or all of the
common shares of Carlisle held by AuRico. In addition, AuRico may
formulate other purposes, plans or proposals regarding Carlisle or any
of Carlisle's securities to the extent deemed advisable in light of the
investor rights agreement, general investment and trading policies,
market conditions or other factors or may change its intention with
respect to any and all matters referred to above.
This news release is not an admission that an entity named in the news
release owns or controls any described securities or is a joint actor
with another named entity.
AuRico's address is 110 Yonge Street, Suite 1601, Toronto, ON M5C 1T4.
SOURCE AuRico Gold Inc.