VANCOUVER, April 4 /CNW/ -- (All figures are in Canadian dollars
unless otherwise indicated) VANCOUVER, April 4 /CNW/ - New Gold
Inc. ("New Gold") (TSX:NGD) (AMEX:NGD) and Richfield Ventures Corp.
("Richfield") (TSX.V:RVC) today jointly announce a definitive
agreement whereby New Gold will acquire, through a plan of
arrangement (the "Arrangement"), all of the outstanding common
shares of Richfield. Under the terms of the Arrangement, each
Richfield shareholder will receive 0.9217 of a New Gold share for
each Richfield share held. The offer values Richfield at $10.38 per
share or approximately $550 million, representing a 31% premium to
Richfield's April 1, 2011 closing price and a 46% premium based on
each company's 20-day volume weighted average price. The
transaction value, net of cash and proceeds from all in-the-money
dilutive instruments, is approximately $513 million. Richfield's
flagship asset is the Blackwater Project, located in central
British Columbia, approximately 160 kilometres southwest of Prince
George, a city of approximately 80,000. On March 2, 2011, Richfield
announced the initial mineral resource estimate for the Blackwater
Project, with its attributable share comprising 1.8 million ounces
of indicated gold resources plus 2.0 million ounces of inferred
gold resources. See Blackwater Project below for additional detail.
Transaction Highlights - New Gold - Adds a large gold asset in
British Columbia where New Gold is well advanced in bringing its
New Afton Project into production - Adds an established
attributable gold resource base of 1.8 million ounces of indicated
mineral resources and 2.0 million ounces of inferred mineral
resources with significant exploration potential - Timeline for
development that matches availability of New Gold's proven mine
building team - Ability to fund development from internal cash flow
- Tax synergies with New Afton - Minimal shareholder dilution of
approximately 10% "The acquisition of the Blackwater Project is an
ideal fit with our goal of continuing to enhance value in
jurisdictions where we already have a strong presence. This is an
exciting gold project that we anticipate could significantly
increase our gold production base at competitive cash costs in the
years ahead," stated Randall Oliphant, New Gold Executive Chairman.
"The Richfield team have done a tremendous job in advancing the
project to this point and we are excited to now move forward with
it. With New Afton in British Columbia on track to begin production
in mid-2012, we will be well positioned to deploy both the team and
cash flow from New Afton to move the Blackwater Project through
continued exploration, development and ultimately into production."
Transaction Highlights - Richfield - Immediate and attractive
premium recognizing both the current value and potential of the
Blackwater Project - All-share deal - shareholders retain ongoing
exposure to the Blackwater Project and gain exposure to New Gold's
diversified gold production base and exciting growth projects - New
Gold provides technical expertise and financial capability to move
the Blackwater Project through development and into production -
Significantly enhanced trading liquidity upon receiving New Gold
shares "I am thrilled by this win-win transaction for both
Richfield's shareholders and those of New Gold. The Blackwater
Project will be in excellent hands with New Gold, a proven mine
builder and operator, that has the financial capacity and the
exploration and development expertise to continue to expand and
ultimately develop the gold resources at Blackwater," said Peter
Bernier, Richfield President and Chief Executive Officer. "I am
proud of the Richfield team's hard work in making this project into
the success that it is today, and very excited going forward for
our shareholders to own a meaningful portion of New Gold. This will
allow us not only to participate in the continued advancement of
Blackwater, but also to be part of New Gold's exciting growth
portfolio." Blackwater Project The Blackwater Project is a
bulk-tonnage gold project located in central British Columbia and
is approximately 450 kilometres north of New Gold's New Afton
Project. The project area covers 23,670 hectares, with Richfield
owning 100% of the southern claims and 75% of the adjacent northern
claims. Silver Quest Resources Ltd. owns the remaining 25% of the
northern Davidson claims. The project is attractively located and
is near infrastructure, the terrain is characterized by rolling
hills, the project is accessible by road and four alternatives to
tie in to a 230kV powerline have been discussed with BC Hydro. On
March 2, 2011, Richfield announced the initial mineral resource
estimate for the Blackwater Project with the majority of the
drilling supporting the estimate having been done on the 100%-owned
southern portion of the project. Blackwater Deposit - Resource
Estimates by Property at 0.4 g/t Au Cut-off grade(1)
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Indicated Inferred
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Grade Grade ----------- Contained ----------- Contained Tonnes Gold
Silver Gold Tonnes Gold Silver Gold Property (000's) (g/t) (g/t)
(Moz) (000's) (g/t) (g/t) (Moz)
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Total Blackwater 53,460 1.06 5.6 1.83 75,452 0.96 4.0 2.34
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Dave and Jarrit claims (100% Richfield) 53,128 1.07 5.6 1.82 29,183
1.04 5.5 0.98
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Davidson claims (75% Richfield, 25% Silver Quest Resources Ltd.)
331 0.92 5.0 0.01 46,269 0.92 3.1 1.36
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Total Richfield 53,377 1.06 5.6 1.83 63,885 0.97 4.2 2.00
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Terms of Offer - For each common share of Richfield, New Gold will
offer 0.9217 of a New Gold common share, plus nominal cash
consideration - Values Richfield at $10.38 per share or
approximately $550 million based on Richfield's fully diluted
in-the-money common shares outstanding and New Gold's April 1, 2011
closing price - Transaction value, net of cash and proceeds from
all in-the-money dilutive instruments, is approximately $513
million - Represents a 31% premium to Richfield's April 1, 2011
closing price and a 46% premium based on the 20-day volume weighted
average prices of each company - Transaction unanimously approved
by the Boards of New Gold and Richfield - Directors and Officers of
Richfield, representing approximately 15.8% of the common shares
and options outstanding have entered into voting agreements in
support of the Arrangement - $18 million break fee - New Gold
retains a right to match any superior proposal The acquisition of
Richfield by New Gold is expected to be completed by way of a court
approved plan of arrangement. The number of New Gold shares to be
issued will be approximately 49 million based on Richfield's fully
diluted in-the-money common shares outstanding. Richfield's stock
options outstanding on the effective date of the Arrangement will
be exchanged for New Gold shares on a cashless exercise basis in
accordance with the terms of the plan of arrangement. Richfield's
warrants outstanding on the effective date will become exercisable
into the Arrangement consideration following the completion of the
Arrangement. Prior to the effective date, Richfield will accelerate
the expiry of those outstanding warrants subject to an expiry
abridgement clause. The transaction is expected to close in June
2011 and upon closing Richfield shareholders will own approximately
10.4% of New Gold on a fully diluted in-the-money basis. The
Arrangement has been approved unanimously by the Boards of
Directors of New Gold and Richfield and will be subject to, among
other things, the favourable vote of 66 2/3% of the votes cast by
holders of the Richfield common shares and options voting as a
single class at a special meeting of Richfield securityholders
called to approve the transaction which is expected to take place
in late May or early June 2011. New Gold's and Richfield's
respective financial advisors have each provided verbal opinions as
to the fairness of the transaction, from a financial point of view,
and the Richfield Board unanimously recommends that its
shareholders vote in favour of the Arrangement. Directors and
Officers of Richfield have entered into voting agreements with New
Gold under which they have agreed to vote in favour of the
Arrangement, their Richfield shares and options, which represent
approximately 15.8% of Richfield's outstanding common shares and
options as of April 1, 2011. In the event that the Arrangement is
not completed, Richfield has agreed, under certain circumstances,
to pay New Gold a termination fee equal to $18 million. Richfield
has also provided New Gold with certain other customary rights,
including a right to match competing offers. In addition, if
Richfield securityholders do not approve the transaction, Richfield
has agreed to pay an expense fee of $1 million to New Gold.
Richfield securityholders and other interested parties are advised
to read the materials relating to the proposed Arrangement that
will be filed by Richfield with securities regulatory authorities
in Canada when they become available. Anyone may obtain copies of
these documents when available free of charge at the Canadian
Securities Administrators' website at www.sedar.com. This
announcement is for informational purposes only and does not
constitute an offer to purchase, a solicitation of an offer to sell
the shares or a solicitation of a proxy. New Gold's financial
advisor is Canaccord Genuity Corp. and its legal advisors are
Cassels Brock & Blackwell LLP in Canada and Shearman &
Sterling LLP in the United States. Richfield's financial advisor is
National Bank Financial Inc. and its legal advisor is McMillan LLP
in Canada. Joint Conference Call and Webcast New Gold and Richfield
will hold a joint conference call and webcast on Monday, April 4th,
2011 at 9:00 am Eastern Time to discuss the proposed acquisition.
Participants may join the conference by calling 1-416-340-2217 or
toll-free 1-866-696-5910 in North America, and 800-8989-6336
toll-free outside of North America. The Passcode is 6711188. To
listen to a recorded playback of the call after the event, please
call 1-905-694-9451 or toll-free 1-800-408-3053 in North America -
Passcode 7044424. A live and archived webcast will be available at
www.newgold.com
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About New Gold Inc. New Gold is an intermediate gold mining
company. The Mesquite Mine in the United States, the Cerro San
Pedro Mine in Mexico and Peak Gold Mines in Australia are expected
to produce between 380,000 and 400,000 ounces of gold in 2011. The
fully-funded New Afton project in Canada is scheduled to add
further growth in 2012. In addition, New Gold owns 30% of the
world-class El Morro project located in Chile. For further
information on the company, please visit www.newgold.com.
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About Richfield Ventures Corp. Richfield Ventures Corp. is a public
mineral exploration company trading on the TSX Venture Exchange
under the symbol RVC. Richfield has been actively acquiring and
exploring mineral tenures in the Quesnel Trough and Nechako Plateau
regions of British Columbia. For further information on the
company, please visit www.richfieldventures.ca.
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(1) See Richfield March 2, 2011 NI 43-101 Technical Report
available on SEDAR at www.sedar.com for detailed information
regarding the Blackwater Project resource estimate. The Blackwater
resource estimate contained in this news release is effective as of
March 2, 2011 and was derived from information prepared by or under
the supervision of Mr. Ronald Simpson, P. Geo, President of Geosim
Services Inc., an independent "qualified person" under National
Instrument 43-101 Standards of Disclosure for Mineral Projects NI
43-101. Cautionary Note Regarding Forward-Looking Statements
Certain information contained in this news release, including any
information relating to New Gold's and/or Richfield's future
financial or operating performance may be deemed "forward looking".
All statements in this news release, other than statements of
historical fact, that address events or developments that New
Gold/Richfield 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 words
"expects", "does not expect", "plans", "anticipates", "does not
anticipate", "believes", "intends", "estimates", "projects",
"potential", "scheduled", "forecast", "budget" and similar
expressions, or that events or conditions "will", "would", "may",
"could", "should" or "might" occur. All such forward-looking
statements are based on the opinions and estimates of the relevant
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/Richfield's ability to control or predict.
Forward-looking statements are necessarily based on estimates and
assumptions (including that the Arrangement will be completed
successfully on the terms agreed upon by the parties and that the
business of Richfield will be integrated successfully in the New
Gold organization) 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. In the case of New Gold, such factors
include, without limitation: significant capital requirements;
fluctuations in the international currency markets and in the rates
of exchange of the currencies of Canada, the United States,
Australia, Mexico and Chile; price volatility in the spot and
forward markets for commodities; impact of any hedging activities,
including margin limits and margin calls; discrepancies between
actual and estimated production, between actual and estimated
reserves and resources and between actual and estimated
metallurgical recoveries; changes in national and local government
legislation in Canada, the United States, Australia, Mexico and
Chile or any other country in which New Gold currently or may in
the future carry on business; taxation; controls, regulations and
political or economic developments in the countries in which New
Gold does or may carry on business; 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 each jurisdiction that New Gold operates,
including, but not limited to, Mexico, where New Gold is involved
with ongoing challenges relating to its environmental impact
statement for the Cerro San Pedro Mine; the lack of certainty with
respect to the Mexican and other foreign legal systems, which may
not be immune from the influence of political pressure, corruption
or other factors that are inconsistent with the rule of law; the
uncertainties inherent to current and future legal challenges the
company is or may become a party to, including the third party
claim related to the El Morro transaction with respect to New
Gold's exercise of its right of first refusal on the El Morro
copper-gold project in Chile and its partnership with Goldcorp
Inc., which transaction and third party claim were announced by New
Gold in January 2010; diminishing quantities or grades of reserves;
competition; loss of key employees; additional funding
requirements; actual results of current exploration or reclamation
activities; changes in project parameters as plans continue to be
refined; accidents; labour disputes; defective title to mineral
claims or property or contests over claims to mineral properties.
In the case of Richfield, such risks include, among other risks,
the approvals of regulators, availability of funds, the results of
financing and exploration activities, the interpretation of
drilling results and geological data, project cost overruns or
unanticipated costs and expenses. In addition, there are risks and
hazards associated with the business of mineral exploration,
development and mining, including environmental hazards, industrial
accidents, unusual or unexpected formations, pressures, cave-ins,
flooding and gold bullion losses (and the risk of inadequate
insurance or inability to obtain insurance to cover these risks) as
well as "Risk Factors" included in New Gold's and Richfield's
continuous disclosure documents filed on and available at
www.sedar.com. 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/Richfield
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. Cautionary Note to U.S. Readers
Concerning Estimates of Measured, Indicated and Inferred Mineral
Resources Information concerning the properties and operations
discussed herein has been prepared in accordance with Canadian
standards under applicable Canadian securities laws, and may not be
comparable to similar information for United States companies. The
terms "Mineral Resource", "Measured Mineral Resource", "Indicated
Mineral Resource" and "Inferred Mineral Resource" used in this news
release are Canadian mining terms as defined in accordance with NI
43-101 under guidelines set out in the Canadian Institute of
Mining, Metallurgy and Petroleum ("CIM") Standards on Mineral
Resources and Mineral Reserves adopted by the CIM Council on
December 11, 2005. While the terms "Mineral Resource", "Measured
Mineral Resource", "Indicated Mineral Resource" and "Inferred
Mineral Resource" are recognized and required by Canadian
regulations, they are not defined terms under standards of the
United States Securities and Exchange Commission. Under United
States standards, mineralization may not be classified as a
"reserve" unless the determination has been made that the
mineralization could be economically and legally produced or
extracted at the time the reserve calculation is made. As such,
certain information contained in this news release concerning
descriptions of mineralization and resources under Canadian
standards is not comparable to similar information made public by
United States companies subject to the reporting and disclosure
requirements of the United States Securities and Exchange
Commission. An "Inferred Mineral Resource" has a great amount of
uncertainty as to its existence and as to its economic and legal
feasibility. It cannot be assumed that all or any part of an
"Inferred Mineral Resource" will ever be upgraded to a higher
category. Under Canadian rules, estimates of Inferred Mineral
Resources may not form the basis of feasibility or other economic
studies. Readers are cautioned not to assume that all or any part
of Measured or Indicated Resources will ever be converted into
Mineral Reserves. Readers are also cautioned not to assume that all
or any part of an "Inferred Mineral Resource" exists, or is
economically or legally mineable. In addition, the definitions of
"Proven Mineral Reserves" and "Probable Mineral Reserves" under CIM
standards differ in certain respects from the standards of the
United States Securities and Exchange Commission. Neither TSX
Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release. Hannes
Portmann, Vice President, Corporate Development, New Gold Inc.,
Direct: +1 (416) 324-6014, Email: info@newgold.com; Peter Bernier,
President & CEO, Richfield Ventures Corp., Toll Free: +1(877)
992-6644, Email: pete@richfieldventures.ca
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