TORONTO (miningweekly.com) – Two months into its existence, TSX-listed AuRico Metals has agreed to buy private firm Mineral Streams for C$6.85-million in a cash-and-scrip deal that will give it three gold streams.

Through the acquisition, AuRico explained on Tuesday, it would acquire a 0.25% net smelter return (NSR) royalty on the Williams mine, at Barrick Gold Corp’s Hemlo complex, a 0.5% NSR royalty on Wesdome Gold Mines’ Eagle River mine and a 1.5% NSR royalty on Barrick's David Bell property, which also formed part of the Hemlo complex.

"The Hemlo – Williams and Eagle River – royalties are an excellent fit within our portfolio of high-quality cash flowing royalties located in top tier jurisdictions and, together with the Young-Davidson and David Bell royalties, we now have four royalties in Ontario giving us exposure to some of the best gold mines in the province,” AuRico president and CEO Chris Richter commented.

Under the terms of the acquisition agreement, AuRico would pay C$6.85-million for all of the outstanding shares of Mineral Streams at closing. Net of Mineral Streams' positive working capital of about C$1-million, AuRico's acquisition cost would amount to about C$5.9-million.

Payment would consist of 50% cash – C$3.43-million – and 4.75-million AuRico shares.

The Williams mine was part of the Hemlo complex that was an underground and openpit mine operated by Barrick and located about 350 km east of Thunder Bay, in Ontario. Hemlo had produced 206 000 oz of gold in 2014 and was expected to produce between 200 000 oz and 225 000 oz in 2015.

The Hemlo complex started production in 1985 and had produced over 24-million ounces to date. It also had a strong history of replacing reserves for the last 15 years.

The Eagle River mine had been in continuous production since 1995 and had produced more than one-million ounces of gold. The mine was about 50 km west of Wawa, in Ontario. Eagle River produced 48 190 oz of gold in 2014 and also had a long history of replacing reserves.

Subject to regulatory approval, the deal was expected to close on September 15.

AuRico Metals was formed as a spin-off company after Canadian gold miners Alamos Gold and AuRico Gold merged in a $1.5-billion deal earlier this year. The merged company retained the Alamos Gold name and owned a 4.9% stake in AuRico Metals. Former Alamos Gold and AuRico Gold shareholders owned the rest.

A mining royalty and development company, AuRico Metals' cornerstone assets currently included a 1.5% net smelter return (NSR) royalty on the Young-Davidson gold mine, in Ontario, a 2% NSR royalty on the Fosterville mine, in Victoria, Australia, and 100% ownership of the advanced Kemess gold project, in British Columbia.