* Fronteer to get full control of Long Canyon project
* To form new exploration company
* AuEx shares jump 38 pct; touch 6-year high
* Fronteer shares slip 5 pct
(Adds conference call details, updates share movement)
Aug 30 Fronteer Gold Inc FRG.TO agreed to buy
gold and silver exploration company AuEx Ventures Inc (XAU.TO)
for about C$238.2 million ($226 million) in cash and stock,
plus shares in a new exploration company, to get full control
of the Long Canyon gold exploration project in Nevada.
"Long Canyon is our flagship asset and owning 100 percent
of it is important," Fronteer Chief Executive Mark O'Dea said
on a conference call with analysts.
"Consolidated, it's a project that is going to contribute
significantly to our net asset value moving forward."
Fronteer -- which currently owns and operates 51 percent of
Long Canyon, a high-grade, open-pit mineable deposit -- will
acquire AuEx's 49 percent interest in the project.
The deal also strengthens Fronteer's position in the
Pequops areas, which is at the very heart of an emerging gold
trend in eastern Nevada, O'Dea said.
Fronteer will gain a 49 percent stake in the West Pequop
property, which has an initial indicated resource of 64,138
ounces. The project is 51 percent owned and operated by
Canadian gold miner Agnico-Eagle Mines (AEM.TO).
U.S. gold futures for December delivery GCZ0 rose 20
cents to $1,238.10 an ounce on Monday. [ID:nLDE67T0MQ]
Under the court-approved plan of arrangement, AuEx
shareholders will receive 0.645 of a Fronteer share, 66
Canadian cents in cash and 0.5 of a share in a new exploration
company, for each AuEx share.
Excluding the shares of the new exploration company and
based on Fronteer's Friday closing price, the offer values AuEx
at about C$6.07 a share, a premium of 35 percent to its Friday
Nevada-based AuEx had 39.3 million shares outstanding as of
Aug. 26, according to Thomson Reuters data.
The new exploration company will own all of AuEx's
exploration assets outside of the Pequops District and have C$5
million in cash. These assets include AuEx's Buffalo Canyon,
Green Monster and Hays Canyon projects in Nevada.
On completion of the deal, AuEx shareholders will hold 18.6
percent of the proforma outstanding shares of Fronteer, and
90.1 percent of the new exploration company. Fronteer will hold
the remaining stake of the new exploration company.
AuEx shares, which have risen 36 percent in the past three
months, were up 29 percent at C$5.79 Monday during afternoon
trade on the Toronto Stock Exchange. They touched a high of
C$6.20 earlier in the session.
Vancouver-based Fronteer's shares were down 5 percent at
($1=1.054 Canadian Dollar)
(Reporting by Isheeta Sanghi in Bangalore; Editing by Anne