The Canadian miner, Crocodile Gold, just purchased two Australian mines from another Canadian firm, AuRico Gold. It bought the Fosterville and Stawell mines in Victoria for $101 million.

AuRico purchased the two mines in 2011 when it took over the Canadian group, Northgate. The mines were considered secondary assets to the Northgate acquisition and AuRico had intended to find another buyer for it.

Crocodile Gold, based in the Northern Territory, produced 68,000 ounces of gold in 2011.

The Fosterville mine, located 20 kilometres east of Bendigo, is forecast to produce up to 95,000 ounces of gold in 2012 at the cash cost of $965 to $995 for every ounce. Stawell mine, located at the edge of Stawell town northwest of Ballarat, is estimated to produce up to 85,000 ounces of gold this year at cash cost ranging from $870 to $900 per ounce.

Stawell used to be developed by Western Mining Corporation and has produced gold for 27 years. In 2010, it produced its two millionth ounce of gold. Despite its productivity, there was limited Australian interest in the mines, particularly Stawell, due to the perception their exploration upside potential was limited.

With Crocodile Gold's purchase of the two Australian mines, the Canadian miner is set to produce up to 250,000 ounces from the two mines in 2012.

AuRico said it sold the two Aussie mines to Crocodile Gold to concentrate on its North American operations and build investor confidence. However, AuRico remains a shareholder in Crocodile Gold.

To complete the deal, Crocodile Gold relies on an $80-million credit facility from Credit Suisse. The two parties inked a non-biding term sheet.

Desjardins Securities analyst Brian Christie placed the Fosterville and Stawell value at $168 million and $131 million, respectively.

"It provides AuRico with immediate cash and allows management to direct its full attention to its strong portfolio of North American assets - particularly the ramp-up of Young-Davidson," Mr Christie wrote in a note.