Fronteer to claim all of Long Canyon

Fronteer Gold (FRG-T) has secured a full interest in its key asset by acquiring AuEx (XAU-T) for $238 million.

The deal, which is made up of a combination of cash and stock will secure the Long Canyon gold exploration project in Nevada for the company.

Vancouver-based Fronteer currently holds 51% of the high-grade project while AuEx’ has the remaining 49% stake.

The deal will also get Fronteer a 49% stake in the smaller West Pequop property, which currently is an early stage exploration project.

While West Pequop currently lacks significant tonnage it already has one thing going for it – gold mining heavy weight Agnico-Eagle Mines (AEM-T, AEM-N) holds the other 51% and is the operator of the project.

West Pequop is in the Pequops area of eastern Nevada, which is considered an emerging gold trend.

AuEx shareholders are set to get 0.645 of a Fronteer share, 66¢ in cash and 0.5 of a share in a new exploration company.

All of AuEx’s exploration assets that aren’t in the Pequops District will be bundled into the new exploration company along with $5 million in cash. Those other projects all lie in Nevada.

Once the deal is finalized AuEx shareholders will be left with a 18.6% stake in Fronteer, and a 90% stake in the new exploration company.

In Toronto on Aug. 30 Fronteer shares were off 8% or 63¢ to $7.76 on 2.19 million shares traded, while AuEx share rose 27% or $1.19 to $5.69 on 3.32 million shares traded.