AuRico, Crocodile revise payment arrangement from sale of two Aussie gold mines

TORONTO – AuRico Gold Inc. (TSX:AUQ) will receive $20-million cash and a stream of royalty payments from Crocodile Gold Corp. (TSX:CRK) under a revised agreement between the two companies.

Their original agreement was established when Crocodile acquired two Australian gold mines from AuRico in 2012.

Under that plan, AuRico could have received more than $45 million from the mines’ cash flow but over a longer period of time and after certain conditions were met.

Both TSX-listed companies say the new deal is mutually beneficial but subject to approval from the Australia’s foreign investment review agency.

AuRico will receive the $20-million cash payment soon after the deal closes plus royalties based on production from the Fosterville and Stawell gold mines.

Under the previous arrangement, Crocodile was entitled to the first $60 million of free cash flow generated by the mines before AuRico started to receive 100 per cent of the next $30 million in net free cash flow and then 50 per cent of cash flow to a maximum of $30 million and then 20 per cent of the cash flow on an ongoing basis.