Centerra Gold aquires AuRico Metals in C$310mn deal

By Dale Benton
Centerra Gold and AuRico Metals have announced that the two companies have entered into a definitive arrangement agreement, one that will see Centerra a...

Centerra Gold and AuRico Metals have announced that the two companies have entered into a definitive arrangement agreement, one that will see Centerra acquire all of the issued and outstanding common shares of AuRico Metals for C$1.80 in cash consideration per which comes together at a total value of C$310 million.

Through the transaction, significantly enhance Centerra’s high-quality asset base in a world-class jurisdiction through the Kemess property, a project that already has over C$1 billion of surface infrastructure in place.

The Kemess East (KE) deposit is located approximately one kilometre east of the Kemess Underground (KUG) deposit and 6.5 kilometres north of the existing Kemess South processing plant and infrastructure. Both deposits are located on AuRico's 100%-owned Kemess property.

In May 2017, AuRico released the results of a Prelimnary Economic Assessment study, which revealed that over a total life-of-mine (“LOM”) there would be a production of  2.7Moz of gold equivalent and an LOM average annual production of 80Koz of gold, 57Mlbs of copper, and 318Koz of silver over 12 years.

Stephen A. Lang, Chairman and Director of Centerra, said, “With the acquisition of the AuRico Metals assets, Centerra expands its existing development pipeline to include another low-cost de-risked brownfield development asset, the Kemess property, located in Canada—one of the lowest risk mining jurisdictions in the world. As well, the Company adds a high-quality, free-cash flow generating royalty portfolio. In the future, as the Company delivers on building out this development pipeline its production base will be sustained and continue to grow with sector-leading operating margins positioning the Company to generate robust free cash flows for many years to come.”

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Chris Richter, President and CEO of AuRico Metals, stated, “Since AuRico Metals’ inception in the middle of 2015, our key objective has been to surface what we saw as significant value in the Kemess Project. I am delighted to now see this value being recognized, with our shareholders receiving a strong cash offer from Centerra at a very attractive premium of 38% to the current spot price, and representing a return of over three times their initial investment in a period of less than two and a half years. I am proud of the success the AuRico Metals team has had in advancing Kemess while growing the value of our portfolio of high quality royalties. I also believe that Centerra is ideally positioned to realize the full potential of Kemess as a long life, significant gold and copper producer.


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