AuRico Metals to Acquire Kiska Metals

Toronto (ots/PRNewswire) - AuRico Metals Inc. (TSX: AMI)
("AuRico") and Kiska Metals Corporation (TSX.V: KSK) ("Kiska") are
pleased to announce that they have entered into a definitive
arrangement agreement (the "Agreement") pursuant to which AuRico will
acquire all of the issued and outstanding securities of Kiska by way
of a statutory plan of arrangement under the Business Corporations
Act (British Columbia) (the "Arrangement").

Under the terms of the Agreement, the holders of common shares
("Kiska Shares") of Kiska ("Kiska Shareholders"), other than AuRico,
will receive approximately: (i) 0.0667 of an AuRico common share
("AuRico Share"), plus (ii) C$0.016 in cash for each Kiska Share
held. Based on AuRico's December 22, 2016 closing share price, the
Arrangement values the Kiska Shares at approximately C$0.078 per
share. The total value of this Arrangement is approximately C$9.6
million. The number of AuRico Shares to be issued as part of the
Arrangement is approximately 8.2 million, assuming conversion of
Kiska's in-the-money options and warrants, representing approximately
5.5% of the current issued and outstanding AuRico Shares.

Arrangement Highlights

Key Benefits to Kiska Securityholders (defined below):

- Premium to Kiska Shareholders: The Arrangement provides an
immediate and significant premium to recent trading ranges of Kiska
Shares, being a premium of 95% to Kiska's closing share price on
the TSX Venture Exchange on December 22, 2016 and a 70% premium on
the basis of Kiska's and AuRico's respective 20-day VWAPs as of the
same date; and also provides shareholders with significantly
enhanced trading liquidity.
- Complementary High-Quality Assets: The combined company will have
paying royalties focused on tier-1 jurisdictions, the Kemess
development project in British Columbia which is well advanced with
a Feasibility Study recently released and an Environmental
Assessment certificate expected in the near-term, and a large
high-quality portfolio of earlier stage royalties and exploration
projects with royalty generation potential.
- Exciting platform: Participation in an exciting new platform,
positioned to create securityholder value through the advancement
of Kemess and further development of a strong royalty and project
pipeline.
- Diversification: The combination of Kiska's projects and royalties
with the advanced stage Kemess project and AuRico's five paying
royalties provides excellent asset diversification for
securityholders.
- Growth Potential: Enhanced ability to transact on accretive
acquisitions and grow the royalty and project portfolio.

Key Benefits to AuRico Shareholders:

- Royalty Diversification and Long Term Optionality: Kiska's royalty
portfolio consists of six existing royalties including royalties on
the East Timmins and Boulevard properties operated by Kirkland Lake
Gold and Independence Gold, respectively. In addition, Kiska's six
wholly-owned exploration projects present organic royalty creation
opportunities. All assets are located in North America and are
expected to further enhance AuRico's existing high quality royalty
pipeline.
- Near Kemess Exploration Upside: The Arrangement would add several
new wholly-owned exploration properties, many of which are located
in British Columbia, including the Kliyul project which is located
approximately 50 km south of AuRico's 100%-owned Kemess project.
These properties present AuRico with organic royalty-creation
opportunities in the context of property partnership or
divestitures.
- Strong Balance Sheet and Other Financial Synergies: The Arrangement
is expected to further strengthen AuRico's financial position as
well as provide administrative and tax synergies going forward.

Mr. Chris Richter, President and CEO of AuRico, stated; "This
transaction presents a unique opportunity to expand our royalty
portfolio with a focus on Canadian assets. We are confident that this
transaction represents a significant value creation opportunity and
we are very pleased to bring this transaction forward to the benefit
of both sets of shareholders."

Mr. Grant Ewing, President and CEO of Kiska, stated; "We are
excited to enter into this agreement, as it offers Kiska shareholders
an immediate and significant premium to the market, and results in
excellent diversification for securityholders by combining an early
stage portfolio of royalties and projects with a high-quality suite
of paying royalties and an advanced development asset in Kemess."

Additional Information Regarding the Arrangement

The Arrangement Agreement includes standard non-solicitation and
superior proposal provisions and Kiska has provided AuRico with
certain other customary rights, including a right to match competing
offers. Full details of the Arrangement will be included in Kiska's
management information circular to be mailed to "Kiska
Securityholders" (Kiska Shareholders and the holders of options of
Kiska and warrants of Kiska), in due course.

The Arrangement is subject to customary closing conditions,
including the approval by the Kiska Securityholders, as well as court
and regulatory approvals. Assuming the timely receipt of such
approvals, the Arrangement is expected to close in the first quarter
of 2017.

A copy of the Agreement will be filed under Kiska's profile on
SEDAR at www.sedar.com.

Support for the Arrangement and Fairness Opinion

Prior to entering into the Agreement, the board of directors of
Kiska (the "Kiska Board") received a verbal fairness opinion (the
"Fairness Opinion") from Primary Capital Inc. ("Primary Capital"), to
the effect that, as of the date thereof, based upon and subject to
the assumptions, limitations and qualifications in the Fairness
Opinion, the consideration to be received pursuant to the Arrangement
is fair, from a financial point of view, to Kiska Shareholders (other
than AuRico). Kiska expects to receive a written Fairness Opinion
from Primary Capital prior to mailing the management information
circular to Kiska Securityholders.

The Kiska Board, after receiving financial and legal advice and
following receipt of the Fairness Opinion, unanimously determined
that the Arrangement is fair to the Kiska Securityholders and that
the Arrangement is in the best interests of the Company and
recommends that Kiska Securityholders vote in favour of the
Arrangement.

In addition, prior to entering into the Agreement, AuRico entered
into support and voting agreements with Kiska's management and the
Kiska Board (together, the "Locked-Up Shareholders"), collectively
holding approximately 7.3% of the issued and outstanding Kiska
Shares, whereby the Locked-Up Shareholders have agreed to vote their
securities in favour of the Arrangement at the special meeting of
Kiska Securityholders.

The AuRico Board of Directors has unanimously approved the
Arrangement.

Private Placement Transaction

In connection with the Arrangement, AuRico and Kiska have also
agreed that AuRico will subscribe for approximately 12.9 million
Kiska Shares on a private placement basis, representing approximately
9.9% of the outstanding Kiska Shares after giving effect to the
private placement. The Kiska Shares will be acquired at a price of
C$0.055 per share, for total gross proceeds to Kiska of approximately
C$709,500. Completion of the private placement is subject to the
satisfaction of certain regulatory requirements but is not contingent
on completion of the Arrangement.

Kiska Securityholder Approval

Completion of the Arrangement will be subject to customary closing
conditions, including receipt of the required approvals at a special
meeting of Kiska Securityholders expected to be held in February 2017
(the "Meeting"). The Arrangement will be subject to the approval of
(i) at least two-thirds of votes cast by Kiska Securityholders
(voting as a single class and excluding Kiska Warrants that will
expire in accordance with their terms prior to the Meeting); (ii) at
least two thirds of the votes cast by Kiska Shareholders (voting
together as a single class); and, (iii) if required by Multilateral
Instrument 61-101 - Protection of Minority Securityholders in Special
Transactions, "minority approval" in accordance with section 8.1 of
MI 61-101.

Advisors and Counsel

Osler, Hoskin & Harcourt LLP is acting as legal counsel to Kiska
and Primary Capital Inc. is acting as the exclusive financial advisor
to Kiska. Fasken Martineau DuMoulin LLP is acting as legal counsel to
AuRico.

About Kiska

Kiska employs the "Royalty and Project Generator" business model
to finance exploration, leverage exploration dollars and data, and
preserve shareholder equity. Kiska partners its projects with mining
and exploration companies who share its vision and commitment with
respect to environmentally and socially responsible mineral
exploration and development. Kiska holds a high-quality portfolio of
gold and copper projects throughout North America, large technical
databases, and an extensive royalty portfolio.

About AuRico

AuRico is a precious metals royalty and mining development company
whose producing gold royalty assets include a 1.5% NSR royalty on the
Young-Davidson Gold Mine, a 0.25% NSR royalty on the Williams Mine at
Hemlo, and a 0.5% NSR royalty on the Eagle River Mine - all located
in Ontario, Canada. AuRico Metals also has a 2% NSR royalty on the
Fosterville Mine and a 1% NSR royalty on the Stawell Mine, located in
Victoria, Australia. Aside from its diversified royalty portfolio,
AuRico wholly owns the advanced Kemess Gold-Copper Project in British
Columbia, Canada. AuRico Metals' head office is located in Toronto,
Ontario, Canada.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES
PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE
EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS
RELEASE

Cautionary Statement on Forward-Looking Information

All statements, other than statements of historical fact,
contained or incorporated by reference in this news release
constitute ''forward-looking information'' or ''forward-looking
statements'' within the meaning of certain securities laws, including
the provisions of the Securities Act (Ontario) and are based on
expectations, estimates and projections as of the date of this news
release. Forward-looking statements contained in this news release
include, without limitation, statements with respect to: any
information as to the future financial or operating performance of
AuRico and Kiska, the completion of the Arrangement, the expected
synergies and benefits of the Arrangement, the completion of the
private placement, the "Transaction Highlights", the success of Kiska
in its litigation against St. Andrew Goldfields with respect to the
East Timmins Royalty (the "Litigation"), the future price of gold,
copper and silver, the estimation of mineral resources, costs and
timing of the development of projects and new deposits, success of
exploration, currency fluctuations, requirements for additional
capital, government regulation of mining operations, and
environmental risks. The words "anticipates", ''estimates'',
''expects'', "focus", ''forecast", "indicate", "initiative",
"intend", "model", "opportunity", "option", "plans'', "potential",
"projected", "prospective", "pursue", "strategy", "study" (including,
without limitation, as may be qualified by "feasibility" and the
results thereof), "target", "timeline" or variations of or similar
such words and phrases or statements that certain actions, events or
results ''may'', ''could'' or ''would'', and similar expressions
identify forward-looking statements.

Forward-looking statements are necessarily based upon a number of
estimates and assumptions that, while considered reasonable by AuRico
and Kiska as of the date of such statements, are inherently subject
to significant business, economic, regulatory and competitive
uncertainties and contingencies. The estimates, models and
assumptions of AuRico and Kiska referenced, contained or incorporated
by reference in this news release, which may prove to be incorrect,
include, but are not limited to, the various assumptions set forth
herein and in AuRico's and Kiska's most recently filed Annual
Information Forms and Management's Discussion and Analysis as well
as: (1) the exchange rate between the Canadian dollar and the U.S.
dollar being approximately consistent with assumed levels; (2)
certain price assumptions for gold, copper and silver; (3) the
results of the Kemess Underground Feasibility Study will be realized
within a margin of error consistent with AuRico's expectations; (4)
the accuracy of the current mineral resource estimates of the Kemess
East project; and (5) access to capital markets, including but not
limited to identifying financing options and securing partial project
financing for the Kemess project, being consistent with AuRico's
current expectations.

Known and unknown factors could cause actual results to differ
materially from those projected in the forward-looking statements.
Such factors include, but are not limited to: the results of
shareholder and regulatory approvals for the Arrangement, the
integration of Kiska with AuRico, the quality of the title of Kiska
to its assets and the extent of any known, unknown or contingent
liabilities of Kiska, the results of the exploration at Kemess East
and the accuracy of the mineral resource estimates at Kemess East;
relations with First Nations partners and the Province of British
Columbia; exploration for additional mineral resource potential;
fluctuations in the currency markets; changes in the market
valuations of peer group companies, AuRico and Kiska, and the
resulting impact on market price to net asset value multiples;
changes in various market variables, such as interest rates, foreign
exchange rates, gold, copper or silver prices; changes in national
and local government legislation, taxation, controls, policies and
regulations; political or economic developments in Canada, the United
States or elsewhere; business opportunities that may be presented to,
or pursued by, us; employee relations; litigation against the
Company; the speculative nature of mineral exploration and
development including, but not limited to, the risks of obtaining
necessary licenses and permits; diminishing quantities or grades of
reserves; and contests over title to properties. In addition, there
are risks and hazards associated with the business of mineral
exploration, development and mining. Many of these uncertainties and
contingencies can directly or indirectly affect, and could cause,
AuRico's and Kiska's actual results to differ materially from those
expressed or implied in any forward-looking statements made by, or on
behalf of, AuRico or Kiska.

There can be no assurance that forward-looking statements will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements.
Forward-looking statements are provided for the purpose of providing
information about management's expectations and plans relating to the
future. All of the forward-looking statements made in this news
release are qualified by these cautionary statements and those made
in the most recently filed Annual Information Form, Short-Form
Prospectus and Management Discussion and Analysis of AuRico or Kiska,
as applicable. These factors are not intended to represent a complete
list of the factors that could affect AuRico, Kiska or the
Arrangement. AuRico and Kiska disclaim any intention or obligation to
update or revise any forward-looking statements or to explain any
material difference between subsequent actual events and such
forward-looking statements, except to the extent required by
applicable law.

For further information on Kiska please visit the Kiska website at
www.kiskametals.com or contact: Grant Ewing, President and Chief
Executive Officer, Kiska Metals Corporation, 604-484-1231,
grante@kiskametals.com; For further information on AuRico please
visit the AuRico website at www.auricometals.ca or contact: Chris
Richter, President and Chief Executive Officer, AuRico Metals Inc.,
416-216-2780, chris.richter@auricometals.ca; John Miniotis, Vice
President, Corporate Development, AuRico Metals Inc., 416-216-2780,
john.miniotis@auricometals.ca

ots Originaltext: AuRico Metals Inc.
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