Frisco Minera Buying AuRico’s Ocampo Mine

Frisco Minera and AuRico Gold have entered into a definitive agreement whereby Frisco will acquire AuRico’s Ocampo mine and adjacent Venus and Los Jarros exploration projects in Chihuahua state, Mexico, and a 50% interest in the Orion advanced explo-ration project in Nayarit state, Mexico, for $750 million in cash. The transaction is expected to close in December 2012.

Ocampo is comprised of an open-pit and two underground mines, with a 3,200-mt/d mill and a 10,000-mt/d heap leach facility. The mine produced 99,478 oz of gold and 4,171,772 oz of silver in 2011.

The Venus project is located 3 km north of the Ocampo mine. The Los Jarros project is located directly east of the Ocampo mine and surrounds Ocampo and Frisco’s El Concheño mine.

The Orion project is an advanced ex-ploration project and includes an exten-sive land package. The project will be developed jointly by AuRico and Frisco.

Frisco expects the acquisition to be highly complementary to some of its pro-jects under development and to increase its current installed capacity, as well as providing a strong base of proven and probable reserves that will add to its current resources.

AuRico expects to use the net pro-ceeds from the transaction to eliminate certain debt obligations, invest in inter-nal growth opportunities, provide suffi-cient working capital and liquidity for the company going forward, and under-take a significant return of capital to shareholders.

Scott Perry, president and CEO of AuRico said, “Following the transaction, AuRico 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 jurisdic-tions while maintaining a strong organic growth profile primarily driven by increas-ing 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.”

As featured in Womp 2012 Vol 11 -