Canadian Mining Journal

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MERGER: Northgate, Primero aim to create mid-tier gold producer

TORONTO - Primero Mining and Northgate Minerals have entered into a definitive agreement that will see the two merge their businesses to create a new, mid-tier gold producer. Combined market capitalization will be approximately $1.2 billion.



TORONTO – Primero Mining and Northgate Minerals have entered into a definitive agreement that will see the two merge their businesses to create a new, mid-tier gold producer. Combined market capitalization will be approximately $1.2 billion.

The combined enterprise will operate four gold mines – Primero’s San Dimas mine in Mexico, Northgate’s Fosterville and Stawell mines in Australia, and Northgate’s Young-Davidson mine under development in Ontario. By 2015 gold output is expected to be 550,000 oz/y.

Northgate has agreed to acquire all of Primero’s common shares for 1.5 Northgate shares each. Options to purchase Primero stock at later dates will be honoured for the purchase of Northgate shares. Goldcorp, holder of 35.5% of the issued Primero shares, has agreed to tender its shares in return for 46.7 million Northgate shares. At the close of the deal, Goldcorp will control 11% of Northgate shares.

The management team will be drawn from the ranks of both companies. Terry Lyons (Northgate) will remain chairman, and Joe Conway (current president and CEO of Primero) will hold those positions at the new company. Peter MacPhail (Northgate) and Jon Douglas (Northgate) will retain their roles as COO and CFO, respectively.

Additional information about the arrangement may be found at www.NorthgateMinerals.com and www.PrimeroMining.com.