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Centerra Gold to buy AuRico Metals in $310-million deal

Two engineers pour the top layer of molten gold into a basin in Centerra’s Kumtor mine mill in Kyrgyzstan.

ANDREW CABALLERO REYNOLDS/BLOOMBERG NEWS

Canadian miner Centerra Gold Inc said on Tuesday it would buy smaller rival AuRico Metals Inc in a deal valued at $310-million.

Centerra offered $1.80 per share in cash, a 38.5 per cent premium to AuRico last close on Monday.

Canadian miners have been boosting acquisitions at home as they come under pressure from foreign governments over profit-sharing at crucial mines.

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Toronto-based Centerra reached an agreement with Kyrgyzstan in September to settle all outstanding disputes over the Kumtor gold mine, the company's biggest.

Earlier this year, miner Alamos Gold Inc , agreed to buy Richmont Mines Inc in a deal valued at about $905-million, creating a top-10 gold producer in North America.

Centerra's deal will be funded through cash in hand and debt and is expected to close in January 2018, the companies said in a joint statement.

Scotia Capital was financial adviser to Centerra, while Macquarie Capital Markets Canada Ltd advised AuRico.

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