New Gold's Cerro San Pedro mine in Mexico.
New Gold Inc. and Western Goldfields Inc. have completed their business combination, the firms said this morning, creating a firm expected to produce more than 330,000 ounces of gold this year from properties in California, Mexico and Australia.
The transaction was completed by way of a plan of arrangement that was approved by the New Gold and Western Goldfields shareholders on May 13 and 14, respectively and which received final court approval on May 27. New Gold is based in Vancouver and has the goal of becoming a million-ounce, low-cost producer.
“The closing of this transaction represents another significant step for New Gold as we continue to deliver on our growth strategy which we had promised our shareholders approximately one year ago,” said Robert Gallagher, president and CEO of New Gold.
“We are excited to bring the Mesquite mine into our portfolio of assets as we continue to focus on growth by enhancing our operations, continuing the development of New Afton and pursuing strategic acquisition opportunities.”
Randall Oliphant, executive chairman of the newly merged company, added, “As we now have the company fully funded, New Gold finds itself in a strong position, with growing production and cash flow enabling it to become the leading intermediate gold producer.”
New Gold acquired all of the common shares of Western Goldfields in consideration for the issuance by New Gold of one common share of New Gold and C$0.0001 for each Western Goldfields common share outstanding.
New Gold has issued some 143 million common shares of New Gold to the former shareholders of Western Goldfields and authorized the issuance of an additional 12 million common shares upon the exercise of the stock options and warrants held by the former security holders of Western Goldfields. As of today, following completion of the transaction, there were approximately 356 million issued and outstanding common shares of New Gold.
Randall Oliphant, Ray Threlkeld, Vahan Kololian and Martyn Konig, Western Goldfields directors, have been appointed to the New Gold board and Brian Penny and Wes Hanson of Western Goldfields are joining the New Gold management as executive vice president and CFO, and vice president technical services, respectively.
New Gold has three operating assets” the Mesquite mine in southern California, the Cerro San Pedro mine in Mexico and the Peak mines in Australia. The newly combined company is expected to produce between 330,000 and 360,000 ounces of gold in 2009, growing to over 400,000 ounces in 2012 and have significant reserves and resources with a strong portfolio of mining, development and exploration assets in mining friendly jurisdictions.
