Rimfire agreementTORONTO,
Oct. 27, 2016 /PRNewswire/ - 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.