AuRico Gold Inc. company history: the story so far

History

AuRico Gold widened its Canadian portfolio and made a Kemess discovery in late 2014, then agreed a merger with Alamos Gold that won shareholder and court approval by June 2015.

2014: New projects in Canada

By late 2014 AuRico Gold, formerly Gammon Gold, ran two mines: Young-Davidson in northern Ontario and El Chanate in Sonora, Mexico. On November 12 it added an early-stage project. It agreed to buy 70.6 million shares of Carlisle Goldfields at C$0.08 each, about C$5.6 million for roughly 19.9% of the company, subject to Toronto Stock Exchange approval. It also took a 25% interest in Carlisle's Lynn Lake gold camp in Manitoba for an initial C$5 million, with an option to earn up to a further 35% by spending C$20 million over three years and delivering a feasibility study (a study of whether a mine would pay).

On December 15 it reported a new gold-copper discovery at Kemess East in British Columbia, one kilometre from the Kemess Underground deposit. Sixteen of 19 holes hit mineralization, and the best intersected 768 metres at 0.442 g/t gold and 0.392% copper.

2015: The Alamos merger

Year-end estimates, released February 20, 2015, showed a mixed picture. Young-Davidson underground reserves rose 6% to 3.76 million ounces, while El Chanate reserves fell 37% to 646,000 ounces. Total reserves slipped 4% to 6.27 million ounces, but measured and indicated resources rose 64% to 4.1 million ounces, largely thanks to Kemess East and Lynn Lake.

On May 19 AuRico disclosed a merger with Alamos Gold. AuRico holders would receive 0.5046 shares of the combined company per share, and Alamos holders one share plus US$0.0001 in cash. Holders of AuRico's 3.50% convertible notes due 2016 could convert them, and that right lasts until 35 days after completion.

Shareholders approved the deal on June 24, with 98.83% of AuRico votes and 90.56% of Alamos votes in favour. The deal also creates a new company, AuRico Metals Inc., which the CEO linked to Kemess. On June 26 the Ontario Superior Court of Justice gave final approval. As of that date the merger had not closed; completion was expected on July 2, 2015, subject to regulatory approvals.

Written from the 6 story beats below (2014 to 26 June 2015), which come from the company's own announcements and filings.

Beat by beat

The events that changed the company's story, in plain English, each written against everything known about the company at the time. The dot shows whether it was good, bad or neutral for shareholders.

2015

26 June
The Ontario Superior Court of Justice (Commercial List) gave final approval on June 26, 2015 to the plan of arrangement combining Alamos and AuRico. Closing is still expected July 2, 2015, subject to regulatory approvals and other customary conditions. This is another step following the shareholder vote two days earlier; the filing does not yet report the merger as completed.
business combination
24 June
Shareholders of both companies approved the Alamos-AuRico merger on June 24, 2015: about 98.83% of votes cast by AuRico holders and 90.56% of votes cast by Alamos holders. The deal also creates a new company, AuRico Metals Inc., whose incentive plan was approved too, and closing is expected July 2, 2015 subject to regulatory approvals and other conditions. This moves forward the merger described in the May notes release; the filing does not itself say what AuRico Metals will hold, though AuRico's CEO links it to the Kemess project.
business combination
19 May
AuRico told holders of its 3.50% convertible senior notes due 2016 that they can currently convert the notes, and that right lasts until 35 days after the planned merger with Alamos Gold is completed. Under the merger, AuRico shareholders get 0.5046 shares of the combined company per AuRico share, and Alamos holders get 1 share plus US$0.0001 in cash per share; completion is expected in July 2015 but is not assured. This is the first mention of the notes in the context and of the Alamos merger terms; before the merger the notes convert into AuRico shares, afterwards into shares of the combined company, and AuRico or the combined company may pay cash, shares or a mix.
debt financing
20 Feb
AuRico's year-end 2014 estimates show Young-Davidson underground reserves up 207,000 ounces (6%) to 3.76 million, while El Chanate reserves fell 37% to 646,000 ounces from mining and flatter planned pit slopes. Total reserves slipped 4% to 6.27 million ounces, but measured and indicated resources rose 64% to 4.1 million ounces and inferred resources rose to 2.4 million ounces, mainly from the Kemess East discovery and the 25% Lynn Lake interest. This follows through the Kemess East and Lynn Lake news of late 2014.
resource reserve update

2014

15 Dec
AuRico reported a new gold-copper porphyry discovery at Kemess East, one kilometre east of the Kemess Underground deposit in British Columbia. Of 19 holes drilled since late 2013 (27,214 metres), 16 hit mineralization; the best, KH14-04, ran 768 m at 0.442 g/t gold and 0.392% copper. An initial resource estimate is expected in early 2015, and the Kemess Underground environmental application is targeted for the first half of 2015; the company gives no assurance the estimate will be completed on time.
drilling result
12 Nov
AuRico agreed to buy 70.6 million Carlisle Goldfields shares at C$0.08 each (about C$5.6 million, roughly 19.9% of Carlisle), subject to Toronto Stock Exchange approval. It also entered a joint venture for Carlisle's Lynn Lake gold camp in Manitoba: a 25% interest for an initial C$5 million, with an option to earn up to a further 35% by spending C$20 million over three years and delivering a feasibility study. This is a new early-stage Canadian project alongside its Young-Davidson and El Chanate mines.
joint venture update