(All dollar figures are in Australian dollars unless
otherwise indicated)
TORONTO, Oct. 27, 2016 /CNW/ - New Gold Inc. ("New
Gold") (TSX:NGD) (NYSE MKT:NGD) today announces that the company
has entered into an Earn-in Agreement (the "Agreement") with
Rimfire Pacific Mining NL ("Rimfire"). The Agreement relates to
Rimfire's Fifield Project ("Fifield" or the "Project"), located in
central New South Wales,
Australia. Pursuant to the Agreement, New Gold will have the
option to earn up to a 70% interest in the Fifield Project by
incurring a total of A$12 million of
exploration expenditures on the Project over a five-year
period.
"The Fifield earn-in fits New Gold's strategy of disciplined
growth in stable jurisdictions," stated Hannes Portmann, Executive Vice President,
Business Development. "The Project offers excellent potential for
significant new discoveries and resource growth, while the earn-in
structure maximizes our company's flexibility as exploration is
advanced."
The Fifield Project, located approximately 300 kilometres
southeast of New Gold's Peak Mines, includes a 673 square kilometre
land package. The Project is strategically positioned along the
prolific Lachlan Transverse Zone, host to several established
mining operations including the Cadia and North Parkes copper-gold
mines, both of which share strong geologic characteristics with New
Gold's New Afton copper-gold mine in Kamloops, British Columbia. The Fifield
Project encompasses an area of highly prospective geology that
offers excellent potential for both gold-silver and copper-gold
discoveries. In addition to hosting multiple exploration targets,
the Project already includes an established mineral resource at the
Sorpresa gold and silver deposit, a zone of near-surface
mineralization discovered by Rimfire in 2010, that remains open
along strike and at depth.
"We are excited to work with the Rimfire team as the Fifield
Project demonstrates large-scale, world-class discovery potential
in a geologic setting very familiar to us," stated Mark Petersen, Vice President, Exploration.
New Gold's rights and obligations relating to the earn-in are
subject to customary conditions precedent, including approval of
the Australian Government Foreign Investment Review Board. When
those conditions are satisfied (the "Effective Date"), New Gold
will be committed to incur a minimum of A$2
million of exploration expenditures on the Project on or
before the first anniversary of the Effective Date. Thereafter, New
Gold has the option to earn an initial 51% interest in the Project
by incurring an additional A$5
million of exploration expenditures, for an aggregate
A$7 million, on or before the third
anniversary of the Effective Date ("First Earn-in Period"). In the
two years following the First Earn-in Period, New Gold will have
the option to increase its ownership interest by 19% to 70% by
incurring an additional A$5 million
of exploration expenditures.
In conjunction with the execution of the Agreement, New Gold
completed a A$500,000 private
placement for approximately 23.8 million Rimfire common shares at a
price of A$0.021 per share, which
represents approximately a 2.5% pro forma ownership interest.
ABOUT NEW GOLD INC.
New Gold is an intermediate gold
mining company. The company has a portfolio of four producing
assets and two 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 Rainy River and Blackwater projects, both in
Canada, as well as a 4% gold
stream on 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.
CAUTIONARY LANGUAGE
Certain information contained in
this news release, including any information relating to New Gold's
future financial or operating performance are "forward looking".
All statements in this news release, other than statements of
historical fact, which address events, results, outcomes or
developments that New Gold expects to occur are "forward-looking
statements". Forward-looking statements are statements that are not
historical facts and are generally, but not always, identified by
the use of forward-looking terminology such as "plans", "expects",
"is expected", "budget", "scheduled", "targeted", "estimates",
"forecasts", "intends", "anticipates", "projects", "potential",
"believes" or variations of such words and phrases or statements
that certain actions, events or results "may", "could", "would",
"should", "might" or "will be taken", "occur" or "be achieved" or
the negative connotation of such terms. Forward-looking statements
in this news release include, among others, statements with respect
to closing of the earn-in agreement, the satisfaction of the
conditions precedent, the geologic potential of the Project and its
similarity to the New Afton deposit.
All forward-looking statements in this news release are based on
the opinions and estimates of management as of the date such
statements are made and are subject to important risk factors and
uncertainties, many of which are beyond New Gold's ability to
control or predict. Certain material assumptions regarding such
forward-looking statements are discussed in this news release, and,
as applicable, New Gold's Annual Information Form filed at
www.sedar.com. In addition to, and subject to, such assumptions
discussed in more detail elsewhere, the forward-looking statements
in this news release are also subject to political and legal
developments in Australia being
consistent with New Gold's current expectations. Forward-looking
statements are necessarily based on estimates and assumptions that
are inherently subject to known and unknown risks, uncertainties
and other factors that may cause actual results, level of activity,
performance or achievements to be materially different from those
expressed or implied by such forward-looking statements. Such
factors include, without limitation: discrepancies between actual
and estimated mineral reserves and mineral resources; changes in
national and local government legislation; regulations and
political or economic developments in Australia; the speculative nature of mineral
exploration and development, including the risks of obtaining
and maintaining the validity and enforceability of the
necessary licenses and permits and complying with the permitting
requirements of Australia with
respect to the Project. 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.