Canadian gold miner Crocodile Gold Corp. (CRK.TO, CROCF) said it has closed its previously announced agreement with AuRico Gold Inc. (AUQ,AUQ.TO) to terminate the existing net free cash flow sharing arrangement between the two companies in exchange for a one-time payment and a grant of a royalty on the Fosterville and Stawell Gold Mines.
The agreement received approval from the Foreign Investment Review Board of Australia, which was the final condition of closing the agreement. As a result of closing the deal, Crocodile Gold said it has been released from its obligation to pay AuRico any further net free cash flow generated from its Fosterville and Stawell gold mines.
Crocodile Gold has paid AuRico C$20.0 million, or $16.7 million in cash, and granted it a net smelter return royalty of 2 percent from the Fosterville Gold Mine, effective as of January 14, 2014, and a 1 percent royalty from the Stawell Gold Mines commencing January 1, 2016.
The company noted that its strong 2014 fourth-quarter performance resulted in a solid cash balance at year-end that enabled it to fund the one-time payment without the addition of debt.
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