RE: ngdMy understanding under the terms of the revised agreement with Goldcorp was that GC assumed 100% of the development costs and Newgold continues with 30 ownership?
This is from the Newgold website..sorry the formatting sucks...
Agreement Revisions-------------------------------------------------------------------------Original Agreement Revised Agreement-------------------------------------------------------------------------Upfront Payment -- $50 million-------------------------------------------------------------------------Percentage of New Gold's30% share of developmentcapital carried 70% 100%-------------------------------------------------------------------------Interest charged on Xstrata cost of capital U.S. 7-year Treasurycarried funding(2) + 100 basis points Rate + 187 basis(Most recently 12.1%) points (Most recently5.2%)-------------------------------------------------------------------------Initiation of Construction Within 60 days ofGuarantee -- receipt of permits andapprovals (subject tofinancial penalty if notachieved)------------------------------------------------------------------------->>
Based on the El Morro feasibility study capital cost estimate, the incremental 30% carry will negate the funding of approximately $225 million in capital costs New Gold would have otherwise had to provide for the development of the project. Combining this savings with the more favourable interest rate on the carried funding and the $50 million upfront payment significantly enhances the financial flexibility of the company.