Aurogin, Morgain to merge

Two Latin American-focused Canadian gold juniors, Aurogin Resources (AUQ-V, AROG-O) and Morgain Minerals (MGM-V, MGIMF-O), are teaming up via a friendly “merger of equals.”

Shareholders of each company will receive one share of the new, as-yet-unnamed merged company for every two shares of the old company, whether it be Aurogin or Morgain. The newly merged company will trade on the TSX Venture Exchange.

Toronto-based Aurogin, led by industry veteran John Paterson, owns half of the small, but profitable, El Sastre open-pit gold mine in central Guatemala, which poured its first gold in December, and is expected to produce roughly 20,000 oz. gold annually.

From its Vancouver base, Morgain has been developing its well-advanced El Castillo gold project in Mexico’s Durango state. El Castillo hosts measured and indicated resources of 58 million tonnes grading 0.54 gram gold per tonne, or 1 million contained ounces.

The merged company’s share of gold production will be about 22,000 oz. gold this year, growing to 35,000 oz. gold next year as Castillo hits its stride. The goal is to be producing 100,000 oz. gold annually within three years.

Plans are to have seven directors in the new company, including: Chester Millar, Morgain’s chairman; John Paterson, president and CEO of Aurogin; Chris Babcock, president and CEO of Morgain; Edward Thompson, an Aurogin director; Rick Adams, VP of corporate development and director of both companies; Darren Koningen, VP engineering of both companies and a director of Morgain; and Rodrigo Sanchez-Mejorada, a newly appointed Morgain director.

Both companies hope to hold votes on the merger in June, and will likely need the approval of two-thirds of those present.

The deal is still subject to due diligence on both sides, and both companies are now seeking out independent fairness opinions.


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