- New Gold Inc. today announces that it has entered into a binding agreement with Aurelia Metals Limited to sell the Peak Mines located in Cobar, New South Wales, Australia
for cash consideration of $58 million
"Peak has generated significant value for New Gold and predecessor companies over its 25 years of operation," stated Hannes Portmann
, President and Chief Executive Officer. "Peak's robust history of replacing and growing its mineral resources has been key to its successful contribution to New Gold's portfolio of assets. The sale of Peak Mines will offer Aurelia the opportunity to grow its asset base in the Cobar region by leveraging Peak's great team, strong track record of performance, and unlocking its longer-term potential. Today's transaction is another step to enhance New Gold's liquidity and will further enable the company to focus on its Americas-centric portfolio of operating mines and development projects."
"On behalf of New Gold, I would like to thank the Peak team for their commitment and dedication, and wish them continued success as they move forward with Aurelia," added Mr. Portmann.
Aurelia intends to fund the Transaction through a combination of an A$45 million
debt facility provided by the Investec Group and an equity placement in the order of A$70 million
. Aurelia's largest shareholder, Pacific Road Capital Management Pty Ltd, has committed to Aurelia to subscribe for up to A$35 million
in the equity raising and increase their interest in Aurelia to 36.7% from 33.6%, subject to shareholder approval. Aurelia will pay at least a $3 million
deposit, which will be retained by New Gold in certain circumstances if the Transaction is not completed.
The Transaction is subject to customary closing conditions, including Aurelia shareholder approval of a portion of the equity financing and consent from the New South Wales
Minister responsible for the Mining Act 1992 for the transfer of control of certain exploration licenses, and is expected to close in the first quarter of 2018.