Northgate Minerals Corporation (AMEX: NXG) shares shot higher 38.1% to $4.35 on word that it had been acquired by AuRico Gold Inc. (NYSE:AUQ). Volume for Northgate topped 11.7 million shares, or better than quadruple its usual volume.
A news release out August 29 revealed that the Toronto-based AuRico and Northgate have entered into a definitive acquisition agreement to create a new leading intermediate gold producer. The new company will have five operating gold mines, a sixth mine targeting production in 2012 and three gold development projects in Mexico, Canada, and Australia, three of the top global mining jurisdictions. The combined company is completely unhedged and offers full exposure to record gold and silver prices and an exceptional growth profile from approximately 475,0001 gold equivalent (“Aue”) ounces2 this year to 730,000+3 Aue ounces in 2013 (growth of approximately 54%).
Under the terms of the Agreement, AuRico will acquire all of the issued and outstanding common shares of Northgate on the basis of 0.365 AuRico common shares per Northgate common share.
Northgate CEO Richard Hall was quoted in the release as saying, “This transaction gives Northgate shareholders a significant premium to market and an exciting opportunity to participate in a leading intermediate gold company. The Northgate team has worked hard to develop a highly successful business in Canada and Australia and we look forward to further value creation through our combination with AuRico.”
Northgate Minerals Corporation is a gold and copper producer with mining operations, development projects and exploration properties in the Americas and Australia.