Crocodile Gold (CRK.TSX) announced the completion of its acquisition of two gold mines in Australia from AuRico Gold. Under the terms of the agreement, Crocodile Gold purchased the Fosterville and Stawell mines in Victoria State, Australia through the acquisition of all of the shares of Northgate Australian Ventures Corporation Pty Ltd.
The consideration paid to AuRico was amended as the parties negotiated final documentation; it consisted of an initial payment to AuRico of C$65 million on closing, comprised of C$55 million in cash and C$10 million in Crocodile Gold common shares (being 20 million shares at a deemed price of C$0.50 per common share). In addition, AuRico will receive deferred cash payments based on the free cash flow derived from the Properties, as more particularly set out in the amendment to the share purchase agreement.
* Crocodile Gold noted that the transaction is strongly aligned with its growth strategy of becoming an intermediate Australian based gold producer
* Along with adding mineral resources and reserves to its existing portfolio, the acquisition increases the Company’s 2012 production forecast from 75,000-80,000 ounces to 230,000-250,000 ounces
* The acquisition further provides Crocodile Gold the opportunity to become a 300,000 ounces/year producer in 2013
* The increased production profile of the Company is expected to allow for purchasing synergies and overhead savings while providing Crocodile Gold two additional operating assets, and should significantly de-risk the existing operations
Chantal Lavoie, President, CEO and Chairman of Crocodile Gold:
“The two mines will add meaningfully to Crocodile Gold’s near-term production as our Cosmo mine continues to ramp up to steady state. We also believe that significant synergies exist between the operations that should create additional value for Crocodile Gold and the shareholders.”
Rene Marion, President and CEO of Aurico Gold:
“We are pleased to have entered into this agreement with Crocodile Gold and look forward to becoming a shareholder of Crocodile Gold on closing…We see significant value in the combination of these Australian assets with Crocodile Gold’s portfolio.”