AuRico (AUQ), Northgate Minerals (NXG) to Merge in Stock Deal

August 29, 2011 6:23 AM EDT
AuRico Gold Inc. (NYSE: AUQ) has made an offer to buy Northgate Minerals Corporation (AMEX: NXG) on the basis of 0.365 AuRico common shares per Northgate common share.

UBS Securities Canada Inc. provided a fairness opinion to the Board of Directors of AuRico and GMP Securities L.P. and Macquarie Capital Markets Canada Ltd. provided fairness opinions to the Special Committee and Board of Directors of Northgate.

On August 28, 2011, the Board of Directors of Northgate determined that AuRico's proposal to enter into the Agreement is a "superior proposal" for the purposes of the arrangement agreement between Northgate and Primero Mining Corp previously announced on July 13, 2011. Northgate's Board provided notice of that determination to Primero. On receiving this notice, Primero waived its "right to match" the proposal by AuRico. Accordingly, as per the terms of the Primero Agreement, Northgate has paid a termination fee of $25 million to Primero and the Primero Agreement has been terminated. The meeting of Northgate shareholders currently scheduled for September 21, 2011 has been delayed to a later date which is expected to be in October, 2011, at which Northgate shareholders will be asked to approve the transaction with AuRico.

AuRico has retained UBS Securities Canada Inc. to act as financial advisor and Fasken Martineau to act as legal advisor.

Northgate has retained GMP Securities L.P. to act as financial advisor and Torys LLP to act as legal advisor.

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