Minera Frisco acquires interest in Mexican mines
Minera Frisco has entered into an agreement to acquire the Ocampo mineand adjacent Venus and Los Jarros exploration projects in the state of Chihuahua, Mexico, from AuRico Gold for $750m.
Under the deal, the company has also purchased a 50% stake in the Orion mine located in Nayarit.
AuRico Gold is seeking to clear some of its debt and invest in internal growth with the proceeds of the transaction, which is expected to close in December 2012.
AuRico Gold president and CEO Scott Perry said that Minera Frisco's all-cash offer will enable them to use the working capital to continue with production from its two core assets in Canada and Mexico.
The company is hopeful of enhancing its current liquidity while allowing financial flexibility for its current operations and exploring future opportunities.
"Following the transaction, the company will be well positioned to meet its key objectives of growing its profitability and cash flow through the long life, low cost Young-Davidson and El Chanate operations located in low risk jurisdictions while maintaining a strong organic growth profile primarily driven by increasing production at Young-Davidson.
"In addition, we have gained a solid partner to further evaluate and potentially advance the Orion project in the coming years through the joint venture with Minera Frisco," added Perry.
The transaction is subject to Minera Frisco's shareholder approval and requires a standard review by the Mexican competition and anti-trust commission.
Image: AuRico Gold will sell the Ocampo mine to Minera Frisco. Photo courtesy of Aurico Gold Inc.