(All figures are in Canadian dollars unless otherwise indicated)
TORONTO, Nov. 10, 2014 /CNW/ - 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.
