(All figures are in Canadian dollars unless otherwise
indicated)
TORONTO,
Nov. 10, 2014 /PRNewswire/ - New Gold
Inc. ("New Gold") (TSX:NGD) and (NYSE MKT:NGD) today announces that
it has entered into a definitive agreement (the "Agreement") to
acquire 100% of Bayfield Ventures Corp. ("Bayfield") pursuant to a
plan of arrangement (the "Arrangement"). Under the terms of the
Arrangement, Bayfield shareholders
will receive 0.0477 of a New Gold common share for each
Bayfield common share held. The
offer values Bayfield at
$0.21 per common share or
approximately $16.6 million,
representing a 50% premium to Bayfield's November 7,
2014 closing price and a 47% premium based on each company's
20-day volume weighted average trading price. It is expected that
upon completion of the Arrangement, approximately 3.8 million New
Gold common shares will be issued in consideration for Bayfield's outstanding shares, which
represents 0.8% of New Gold's currently outstanding common shares.
Following completion of the Arrangement, in accordance with their
terms, Bayfield's outstanding
warrants will be adjusted based on the exchange ratio and become
exercisable for New Gold common shares.
Bayfield's
assets include a 100% interest in three mineral properties,
totaling 10 square kilometres, located adjacent to New Gold's
Rainy River project in
northwestern Ontario. One of the
three properties, the Burns Block, lies between the eastern edge of
the planned open pit and the underground Intrepid zone at
Rainy River, and contains National
Instrument 43-101 compliant gold and silver mineral resources. New
Gold owns the surface rights to the Burns Block and one of the
other two properties where Bayfield holds the mineral interest.
"The acquisition of Bayfield further consolidates our position in
the Rainy River district," stated Hannes
Portmann, Vice President, Corporate Development. "By adding
these three properties within and adjacent to our project area, it
simplifies our development plans, increases our gold and silver
mineral resources and adds to our prospective land package."
The board of directors of Bayfield has unanimously approved the
transaction and the directors, officers and other shareholders of
Bayfield, who hold approximately
3.3% of the issued and outstanding Bayfield shares, have entered into voting and
support agreements with New Gold pursuant to which they have
agreed, among other items, to support the transaction and vote
their Bayfield shares in favour of
the Arrangement.
Bayfield's
board of directors has also unanimously determined that the
transaction is in the best interests of Bayfield shareholders and recommends that
Bayfield shareholders vote in
favour of the Arrangement. The recommendation of the Bayfield board is supported by a fairness
opinion provided by Primary Capital Inc. to the special committee
of Bayfield directors stating that
the consideration is fair to Bayfield shareholders.
Pursuant to the Agreement, Bayfield has agreed, under certain
circumstances, to pay New Gold a termination fee of $650,000. Bayfield has also provided New Gold with
certain other customary rights, including a right to match
competing offers. As part of the transaction, New Gold will loan
Bayfield up to $300,000 to cover transaction-related expenses
which will be repayable in cash or Bayfield shares in the event Bayfield shareholders do not approve the
transaction.
The Arrangement will be subject to the
favourable vote of 66 2/3% of the votes cast by Bayfield shareholders, the approval of the
court and other standard regulatory approvals. Full details of the
transaction will be set out in Bayfield's information circular that will be
prepared in respect of the special meeting of shareholders to
approve the Arrangement. Bayfield
intends to mail the information circular in early December. The
transaction is expected to close in early 2015.
Bayfield
shareholders and other interested parties are advised to read the
materials relating to the proposed Arrangement after they are filed
by Bayfield on SEDAR at
www.sedar.com.
About New Gold Inc.
New Gold is an intermediate gold mining company.
The company has a portfolio of four producing assets and three
significant development projects. The New Afton Mine in
Canada, the Mesquite Mine in
the United States, the Peak Mines
in Australia and the Cerro San
Pedro Mine in Mexico, provide the
company with its current production base. In addition, New Gold
owns 100% of the Blackwater and
Rainy River projects, both in
Canada, as well as 30% of the El
Morro project located in Chile.
New Gold's objective is to be the leading intermediate gold
producer, focused on the environment and social responsibility. For
further information on the company, please visit
www.newgold.com.
This news release does not constitute an offer
to purchase or exchange or the solicitation of an offer to sell or
exchange any securities of Bayfield or an offer to sell or exchange or
the solicitation of an offer to buy or exchange any securities of
New Gold, nor shall there be any sale or exchange of securities in
any jurisdiction in which such offer, solicitation or sale or
exchange would be unlawful prior to the registration or
qualification under the laws of such jurisdiction. The distribution
of this news release may, in some countries, be restricted by law
or regulation. Accordingly, persons who come into possession of
this document should inform themselves of and observe these
restrictions.
Cautionary Note Regarding Forward-Looking
Statements
This news release contains "forward-looking
statements" and "forward-looking information" within the meaning of
the U.S. Private Securities Litigation Reform Act of 1995 and
applicable Canadian securities legislation, respectively. Such
forward-looking statements and information include, but are not
limited to, statements with respect to the potential completion and
timing of the Arrangement, statements regarding synergies and the
impact of the proposed Arrangement, the terms and conditions of the
Arrangement and the benefits of the proposed Arrangement.
Generally, forward-looking statements and information can be
identified by the use of forward-looking terminology such as
"plans", "expects" or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or
"does not anticipate", or "believes", or variations of such words
and phrases or state that certain actions, events or results "may",
"could", "would", "might" or "will be taken", "occur" or "be
achieved".
Forward-looking statements and information are
based on various assumptions and on the best estimates of New Gold,
as of the date hereof, and is subject to known and unknown risks,
uncertainties and other factors that may cause the actual results,
level of activity, performance or achievements of New Gold to be
materially different from those expressed or implied by such
forward-looking statements and information, including but not
limited to: general business, economic, competitive, political and
social uncertainties; the actual results of current exploration and
development activities; delay or failure to receive shareholder or
regulatory approvals or the failure to satisfy other closing
conditions to the Arrangement; the business of Bayfield not being integrated successfully or
such integration proving more difficult, time consuming or costly
than expected; not realizing on the potential benefits of the
proposed Arrangement; conclusions of economic evaluations; changes
in project parameters as plans continue to be refined; future
prices of mineral prices; failure of plant, equipment or processes
to operate as anticipated; accidents, labour disputes and other
risks of the mining industry; and, delays in obtaining governmental
approvals, as well as those risks identified in New Gold's filings
with Canadian securities regulators, which may be viewed at
www.sedar.com. Although New Gold has attempted to identify
important factors that could cause actual results to differ
materially from those contained in forward-looking statements and
information, there may be other factors that cause results not to
be as anticipated, estimated or intended.
Forward-looking statements are not guarantees of
future performance, and actual results and future events could
materially differ from those anticipated in such statements. All of
the forward-looking statements contained in this news release are
qualified by these cautionary statements. New Gold expressly
disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information,
events or otherwise, except in accordance with applicable
securities laws.
SOURCE New Gold Inc.