(All dollar figures are in US dollars unless
otherwise indicated)
New Gold Inc. (“New Gold” or the “Company”) (TSX and NYSE
American: NGD) is pleased to announce that it has entered into
a strategic partnership with Ontario Teachers’ Pension Plan
(“Ontario Teachers’”). Under the terms of the strategic
partnership, Ontario Teachers’ has agreed to acquire a 46.0% free
cash flow interest in the New Afton mine (“New Afton”) with an
option to convert the interest into a 46.0% joint venture interest
in four years, or have their interest remain as a free cash flow
interest at a reduced rate of 42.5%, for upfront cash proceeds of
$300 million payable upon closing of the transaction (the
“Transaction”). The proceeds from the Transaction will be used to
improve New Gold’s financial flexibility and to reduce net
indebtedness.
Key Transaction Highlights
- Provides New Gold with immediate cash proceeds of $300 million
at an attractive cost of capital, materially reducing New Gold’s
net indebtedness and increasing financial flexibility.
- New Gold retains full operating control over New Afton during
development of the C-Zone as the mine transitions to expand its
operating mine life.
- Ontario Teachers’ is a world-class financial sponsor whose
support of New Afton serves to increase New Gold’s visibility and
its vision of creating value for all stakeholders.
- Overriding buyback option provides New Gold with the
flexibility to potentially re-acquire 100% of New Afton in the
future.
- New Gold will retain 100% of the exploration claims outside of
the New Afton mining permit area and has granted Ontario Teachers’
an option to acquire its proportionate share of these claims upon
conversion into the joint venture interest.
Summary Transaction Terms
- Ontario Teachers’ will initially acquire a 46.0% free cash flow
interest in the New Afton mining claim area with a four-year term
(“Interim Interest”) for $300 million in upfront proceeds and New
Gold will retain 100% ownership of New Afton.
- After four years, Ontario Teachers’ has an option (“JV Interest
Option”) to convert the Interim Interest into a 46.0% partnership
interest in New Afton (“JV Interest”) with New Gold holding the
remaining 54.0% partnership interest in a limited partnership New
Gold and Ontario Teachers’ will form at the time of
conversion.
- If Ontario Teachers’ does not exercise the JV Interest Option,
Ontario Teachers’ will continue to hold a free cash flow interest
in New Afton, but at a reduced rate of 42.5% (“Reduced
Interest”).
- New Gold will hold (i) an overriding buyback option to
re-purchase and cancel the Interim Interest (the “Buyback Option”)
during the JV Interest Option exercise period and (ii) a right of
first offer for the life of the agreements.
“We are pleased to be partnering with Ontario Teachers’, one of
the world’s preeminent and most well-respected investors, in this
transformational transaction that provides us with up front cash
allowing us to restructure our balance sheet and lower our level of
net indebtedness via a true shared risk and upside partnership
focused on free cash flow. This transaction provides New Gold with
an attractive cost of capital, further strengthens our financial
position, allows us to benefit from the full exploration potential
elsewhere on the New Afton land package and provides the
opportunity to re-acquire 100% of New Afton,” said Renaud Adams,
President and Chief Executive Officer of New Gold. “Ontario
Teachers’ is known to conduct in-depth due diligence and partner
with high quality management teams that share its values of
integrity and operational excellence. We look forward to our
partnership with Ontario Teachers’ as we continue our mission to
turn New Gold into Canada’s leading intermediate diversified gold
producer.”
“We are delighted to partner with New Gold, a leading Canadian
mining company, in this distinctive transaction. We gain access to
a free cash flow interest from a top quality asset in a stable and
well-established mining area, with the ability to convert to a JV
interest in four years. Ontario Teachers' Natural Resources group
has a global mandate to pursue investments that provide attractive
returns and inflation protection through exposure to a basket of
key commodities,” said Dale Burgess, Senior Managing Director,
Infrastructure & Natural Resources of Ontario Teachers’.
Additional Transaction Details
Under the terms of the agreement, Ontario Teachers’ will acquire
the Interim Interest, effective from the closing date of the
Transaction with a term of 4 years for upfront cash proceeds of
$300 million payable upon closing. After four years, Ontario
Teachers’ will have the option to convert the Interim Interest into
a 46.0% JV Interest in New Afton, such option to be exercisable
during a 60-day period immediately after the fourth anniversary of
the effective date of the Transaction. Should Ontario Teachers’
elect to exercise such JV Interest Option, Ontario Teachers and New
Gold will form a limited partnership and Ontario Teachers’ will
contribute the free cash flow interest in exchange for a 46% JV
Interest in New Afton. If the JV Interest Option is not exercised
by Ontario Teachers’ during the exercise period, Ontario Teachers’
will hold the Reduced Interest, which provides Ontario Teachers’
with a 42.5% free cash flow interest in New Afton. For purposes of
calculating the Interim Interest and the Reduced Interest, free
cash flow is defined as: the greater of, (i) gross revenue less
treatment and refining costs, operating costs, exploration costs,
interest costs, British Columbia mining taxes, lease payments, and
capital costs, inclusive of changes in working capital, and (ii)
one dollar. For any new, jointly approved, capital project which is
outside of the current mine plan, which results in free cash flow
declining below zero, New Gold is permitted to recover Ontario
Teachers’ share of that capital expenditure from future free cash
flow payments to Ontario Teachers’. Under the terms of the
agreement, New Gold has also agreed to provide Ontario Teachers’
with a minimum guarantee of approximately half of Ontario Teachers'
expected free cash flow over the interim period, subject to certain
adjustments for realized commodity prices and foreign exchange
rates.
The agreement provides New Gold with an overriding Buyback
Option to re-purchase and cancel the Interim Interest during the
same exercise period described above at the greater of (i) an
agreed upon internal rate of return to Ontario Teachers’ and (ii)
the fair market value of the free cash flow interest at that time.
The Buyback Option in favour of New Gold would be exercisable in
priority to the JV Interest Option granted to Ontario Teachers’ and
regardless of Ontario Teachers’ exercise or intention to exercise
of the JV Interest Option. The Buyback Option provides New Gold the
opportunity to re-acquire 100% exposure to New Afton’s cash flows,
at its sole discretion, in four years, allowing New Gold sufficient
time to build the necessary balance sheet strength. Both New Gold
and Ontario Teachers’ will have a mutual right of first offer for
the life of the agreements.
The Transaction agreements set out certain governance rights and
protections for Ontario Teachers’ in relation to the operation of
New Afton, including establishment of an advisory committee to
assist with operation and budgetary decisions.
The Transaction is subject to approval under New Gold’s credit
facility and is expected to close on or about March 31, 2020.
Scotiabank is acting as financial advisor to New Gold. Cassels
Brock & Blackwell LLP and Lawson Lundell LLP are acting as
legal counsel to New Gold. BMO Capital Markets is acting as
financial advisor to Ontario Teachers’. Stikeman Elliott LLP is
acting as legal counsel to Ontario Teachers’.
New Gold looks forward to working with Ontario Teachers’ to
realize the full potential of New Afton, where both New Gold and
Ontario Teachers’ see significant value creation opportunities.
Both New Gold and Ontario Teachers’ are committed to working with
local communities and other partners to ensure New Afton generates
value for all of its stakeholders for many years to come.
About New Gold Inc.
New Gold is a Canadian-focused intermediate gold mining company.
The Company has a portfolio of two core producing assets in
top-rated jurisdictions, the Rainy River and New Afton Mines in
Canada. The Company also operates the Cerro San Pedro Mine in
Mexico (which transitioned to residual leaching in 2016). In
addition, New Gold owns 100 per cent of the Blackwater project
located in Canada. New Gold’s objective is to be a leading
intermediate gold producer, focused on the environment and social
responsibility. For further information on the Company, please
visit www.newgold.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain information contained in this press release, including
any information relating to New Gold’s future financial or
operating performance are “forward-looking”. All statements in this
press release, other than statements of historical fact, which
address events, results, outcomes or developments that New Gold
expects to occur are “forward-looking statements”. Forward-looking
statements are statements that are not historical facts. Often, but
not always, forward-looking statements can be identified by the use
of forward-looking terminology such as “plans”, “expects”, “is
expected”, “budget”, “scheduled”, “targeted”, “estimates”
“forecasts”, “intends”, “anticipates”, “projects”, “potential”,
“believes” or variations of such words and phrases or statements
that certain actions, events or results “may”, “could”, “would”,
“should”, “might” or “will be taken”, “occur” or “be achieved” or
the negative connotation of such terms. Forward-looking statements
in this press release include, among others, the potential timing
of closing of the Transaction, the potential elections and exercise
of options pursuant to the Transaction, use of proceeds of the
Transaction and actions and developments at the New Afton mine, the
strengthening of New Gold’s balance sheet and the value creation
opportunities at New Afton.
All forward-looking statements in this press release are based
on the opinions and estimates of 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’s ability to
control or predict. Certain material assumptions regarding such
forward-looking statements are discussed in this press release, New
Gold’s latest annual and quarterly management's discussion and
analysis (“MD&A”), Annual Information Form and Technical
Reports filed at www.sedar.com and on EDGAR at www.sec.gov.
Forward-looking statements are necessarily based on estimates
and assumptions 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. Such factors include, without
limitation: the “Risk Factors” included in New Gold's Annual
Information Form, MD&A and other disclosure documents filed on
and available at www.sedar.com and on EDGAR at www.sec.gov.
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 press 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200225005330/en/
Anne Day Vice President, Investor Relations Direct: +1
(416) 324-6003 Email: anne.day@newgold.com
Grafico Azioni New Gold (AMEX:NGD)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni New Gold (AMEX:NGD)
Storico
Da Apr 2023 a Apr 2024