(All figures are in US dollars unless otherwise
indicated)
TORONTO, Nov. 20, 2017 /CNW/ - New Gold Inc. ("New Gold")
(TSX:NGD) (NYSE American:NGD) today announces that it has entered
into a binding agreement with Aurelia Metals Limited ("Aurelia") to
sell the Peak Mines located in Cobar, New
South Wales, Australia for cash consideration of
$58 million (the "Transaction").
"Peak has generated significant value for New Gold and
predecessor companies over its 25 years of operation," stated
Hannes Portmann, President and Chief
Executive Officer. "Peak's robust history of replacing and growing
its mineral resources has been key to its successful contribution
to New Gold's portfolio of assets. The sale of Peak Mines will
offer Aurelia the opportunity to grow its asset base in the Cobar
region by leveraging Peak's great team, strong track record of
performance, and unlocking its longer-term potential. Today's
transaction is another step to enhance New Gold's liquidity and
will further enable the company to focus on its Americas-centric
portfolio of operating mines and development projects."
"On behalf of New Gold, I would like to thank the Peak team for
their commitment and dedication, and wish them continued success as
they move forward with Aurelia," added Mr. Portmann.
Aurelia intends to fund the Transaction through a combination of
an A$45 million debt facility
provided by the Investec Group and an equity placement in the order
of A$70 million. Aurelia's largest
shareholder, Pacific Road Capital Management Pty Ltd, has committed
to Aurelia to subscribe for up to A$35
million in the equity raising and increase their interest in
Aurelia to 36.7% from 33.6%, subject to shareholder approval.
Aurelia will pay at least a $3
million deposit, which will be retained by New Gold in
certain circumstances if the Transaction is not completed.
The Transaction is subject to customary closing conditions,
including Aurelia shareholder approval of a portion of the equity
financing and consent from the New South
Wales Minister responsible for the Mining Act 1992 for the
transfer of control of certain exploration licenses, and is
expected to close in the first quarter of 2018.
Macquarie Capital acted as financial advisor to New Gold and
Corrs Chambers Westgarth acted as New Gold's legal advisor.
About New Gold Inc.
New Gold is an intermediate gold mining company with a portfolio
of five producing assets in top-rated jurisdictions. The New Afton
and Rainy River Mines in Canada,
the Mesquite Mine in the United
States, the Peak Mines in Australia and the Cerro San Pedro Mine in
Mexico (which transitioned to
residual leaching in 2016), provide the company with its current
production base. In addition, New Gold owns 100% of the Blackwater
project located in Canada. 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 Note Regarding Forward-Looking Statements
Certain information contained in this news release is "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 the
statements with respect to: Aurelia's funding of the Transaction
and payment of the deposit and the achievement of closing
conditions within the time expected.
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, New
Gold's latest annual management's discussion and analysis
("MD&A"), Annual Information Form and Technical Reports filed
at www.sedar.com and on EDGAR at www.sec.gov. 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 the following assumptions: (1) there being no
significant disruptions affecting Peak's operations; (2) Aurelia
will fund the Transaction on a basis consistent with New Gold's
current expectations, including obtaining the required shareholder
approvals of Aurelia's financing; and (3) all required permits,
licenses and authorizations being obtained from the relevant
governments and other relevant stakeholders within the expected
timelines, including consent from the New
South Wales Minister responsible for the Mining Act 1992 for
the transfer of control of certain exploration licenses held by
Peak.
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: Aurelia obtaining the funding required for the
Transaction; Aurelia obtaining the required shareholder approvals
of Aurelia's financing; changes in national and local government
legislation in Australia;
controls, 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; risks, uncertainties and unanticipated delays
associated with obtaining and maintaining necessary licenses,
permits, authorizations and approvals, including consent from the
New South Wales Minister
responsible for the Mining Act 1992 for the transfer of control of
certain exploration licenses held by Peak, and complying with
permitting requirements as well as "Risk Factors" included in New
Gold's Annual Information Form, MD&A and other disclosure
documents filed on and available at www.sedar.com and on EDGAR at
www.sec.gov. 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.