New Gold in $16.6m acquisition agreement with Bayfield Ventures
Vancouver-based multinational mining company New Gold Inc. announced on Tuesday that it had entered into a definitive agreement worth $16.6 million with Bayfield Ventures Corp. to buy its outstanding shares.
Bayfield shareholders will get 0.0477 of a New Gold common share for each Bayfield common share they hold.
Each Bayfield common share is valued at $0.21, which is 50% higher than its share price on November 7, 2014, and a 47% premium based on each company’s 20-day volume weighted average trading price.
When the deal is completed, about 3.8 million New Gold common shares will be issued for Bayfield’s outstanding shares, i.e. 0.8% of New Gold’s currently outstanding common shares.
Bayfield has three mineral properties that cover a 10 square kilometer area located next to New Gold’s Rainy River project in northwestern Ontario.
One of Bayfield’s properties, the Burns Block, lies between the eastern edge of the planned open pit and the underground intrepid zone at Rainy River and contains considerable reserves of NI 43-101 compliant gold and silver.
New Gold’s Vice President, Corporate Development, Hannes Portmann, said:
“The acquisition of Bayfield further consolidates our position in the Rainy River district. 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.”
Bayfield’s board of directors has unanimously voted in favor of the transaction. The Board has also determined that the deal is in the best interests of its shareholders and advises them to vote in favor of the arrangement.
Regarding the agreement, Bayfield Chairman and CEO, Jim Pettit, said:
“This transaction delivers an immediate and attractive premium to our shareholders. It allows our shareholders to continue to share in the potential of the Rainy River Project through their New Gold shares as well as gain exposure to New Gold’s diversified gold production base and strong growth profile.”
The transaction still needs to be approved by Bayfield shareholders, and other regulatory bodies. The two companies expect the deal to close in the first quarter of 2015.