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.