AuRico Metals snaps up prospect generator Kiska Metals for CAD$9.6 million
Aurico Metals (TSX:AMI) has added to its royalty portfolio and flagship B.C. asset through the acquisition of Kiska Metals Corporation (TSXV:KSK).
Under terms of the agreement announced today, Kiska shareholders will receive about 0.0667 of an AuRico common share plus CAD$0.016 in cash for each Kiska share held.
Through the tie-up, Toronto-based AuRico will obtain two copper-gold porphyry deposits in British Columbia, and other exploration properties in B.C., Alaska and Nevada. Kiska's Kliyul project is located approximately 50 km south of AuRico's 100%-owned Kemess Underground (KUG) Project.
Kiska's royalty portfolio consists of six existing royalties including royalties on the East Timmins and Boulevard properties operated by Kirkland Lake Gold (TSX:CRK) and Independence Gold (TSXV:IGO), respectively.
The results of an updated feasibility study for AuRico’s Kemess project were provided in a March 23 press release. The feasibility study contemplates the development of a low-cost panel caving operation to extract reserves over a 12-year mine life. Total life-of-mine production envisions 1.4 million ounces of gold, 573 million pounds copper and 4.5 million ounces of silver. The property is host to the former Kemess South (KS) Mine, the KUG deposit and the Kemess East (KE) deposit.
"This transaction presents a unique opportunity to expand our royalty portfolio with a focus on Canadian assets. We are confident that this transaction represents a significant value creation opportunity and we are very pleased to bring this transaction forward to the benefit of both sets of shareholders," said AuRico President and CEO Chris Richter.
Grant Ewing, President and CEO of Kiska, stated: "We are excited to enter into this agreement, as it offers Kiska shareholders an immediate and significant premium to the market, and results in excellent diversification for securityholders by combining an early stage portfolio of royalties and projects with a high-quality suite of paying royalties and an advanced development asset in Kemess."