(All figures are in Canadian dollars unless otherwise indicated)
VANCOUVER, June 18, 2013 /CNW/ - New Gold Inc. ("New Gold") (TSX and
NYSE MKT:NGD) and Rainy River Resources Ltd. ("Rainy River") (TSX:RR)
today jointly announce that New Gold has formally commenced its
previously announced take-over bid (the "Offer") to acquire all of the
outstanding common shares of Rainy River at a price of $3.83 per
share. The Offer represents a premium of 67% to the volume weighted
average price of Rainy River shares on the Toronto Stock Exchange for
the 20 trading days ended May 30, 2013, the last trading day prior to
announcement of New Gold's intention to make the Offer.
Pursuant to the Offer, Rainy River shareholders will be entitled to
receive, at their option, either $3.83 in cash or 0.5 of a New Gold
share, in each case subject to pro ration, for each Rainy River share
they own. The maximum amount of cash payable by New Gold under the
Offer will be approximately $198 million and the maximum number of
shares issuable by New Gold will be approximately 25.8 million, based
on the number of Rainy River shares outstanding on May 30, 2013 on a
fully-diluted basis as such term is defined in the Offer. The Offer is
subject to customary conditions, including that a minimum of 66 2/3% of
the outstanding Rainy River shares are tendered to the Offer. The Offer
values the fully-diluted in-the-money share capital of Rainy River, net
of Rainy River's current cash balance, at approximately $310 million.
The Offer is open for acceptance until 5:00 p.m. (Toronto time) on July
24, 2013, unless the Offer is extended or withdrawn.
The board of directors of Rainy River, on the unanimous recommendation
of its Special Committee, has unanimously approved New Gold's
acquisition of Rainy River pursuant to the Offer and has unanimously
recommended that Rainy River shareholders tender their shares to the
Offer. The recommendation of the Rainy River board is supported by
fairness opinions provided by each of BMO Nesbitt Burns Inc. and CIBC
World Markets Inc.
The formal offer to purchase and take-over bid circular as well as the
related letter of transmittal and notice of guaranteed delivery
(collectively, the "Offer Documents"), containing the terms and
conditions of the Offer and instructions for tendering Rainy River
shares, together with Rainy River's directors' circular, are in the
process of being mailed to Rainy River shareholders. These documents
will be filed today with the applicable securities regulators and will
be available on SEDAR at www.sedar.com under Rainy River's profile.
The depositary for the Offer is Computershare Trust Company of Canada
("Depositary") and the information agent for the Offer is Kingsdale
Shareholder Services Inc. ("Information Agent"). Questions and requests
for assistance, including assistance with respect to tendering your
Rainy River shares to the Offer, or requests for additional copies of
the Offer Documents, may be directed to the Depositary at
1-800-564-6253 (email@example.com) or the Information Agent at 1-888-518-6796 (firstname.lastname@example.org).
About New Gold Inc.
New Gold is an intermediate gold mining company. The company has a
portfolio of four producing assets and two significant development
projects. The combination of the New Afton Mine in Canada, the Cerro
San Pedro Mine in Mexico, the Mesquite Mine in the United States and
the Peak Mines in Australia positions New Gold as one of the lowest
cost producers in the industry. In 2013, the company is forecasting
between 440,000 and 480,000 ounces of gold production. In addition to
its four operating mines, New Gold owns 100% of the exciting Blackwater
project in Canada and 30% of the world-class El Morro project located
in Chile. For further information on the company, please visit www.newgold.com.
About Rainy River Resources Ltd.
Rainy River is a Canadian precious metals exploration company whose key
asset is the Rainy River Gold Project, a large gold system centred in
Richardson Township (part of Chapple Township). As at March 31, 2013,
the Company had approximately $90 million in cash and cash equivalents,
and it remains well funded for its ongoing activities, including: 1)
commencement of basic and detailed engineering work and ongoing
permitting and environmental assessment work; 2) continuing to grow the
existing resource through exploration; and 3) conducting a condemnation
program in areas identified for potential mine facilities. The project
is very well located in northwestern Ontario. It is accessed by a
network of roads and is close to hydro-electric infrastructure. The
Rainy River district has a skilled labour force and is one of the
lowest-cost areas for mineral exploration and development in Canada.
Ontario has low political risk and, according to the annual Fraser
Institute global survey of the mining industry, has consistently ranked
as one of the top jurisdictions embracing mineral development.
New Gold will be filing with the United States Securities and Exchange
Commission a registration statement on Form F-10 in connection with the
Offer which will include the formal offer and take-over bid circular.
New Gold encourages shareholders of Rainy River to read the formal
offer and take-over bid circular which contain the full terms and
conditions of the Offer and other important information. The offer and
take-over bid circular may be obtained free of charge through the
Securities and Exchange Commission's website at www.sec.gov or by
directing a request to the Investor Relations department of New Gold.
Cautionary Note Regarding Forward-Looking Statements
Certain information contained in this news release constitutes
"forward-looking statements" within the meaning of the United States
Private Securities Litigation Reform Act of 1995 and forward-looking
information under the provisions of Canadian securities laws.
Forward-looking statements are statements that are not historical facts
and are generally, but not always, identified by the use of
forward-looking terminology such as "plans", "expects", "is expected",
"budget", "scheduled", "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. Such statements
and information include, without limitation, statements regarding
expectations as to the minimum bid condition being met and the expiry
time of the bid, the expected maximum cash payment and maximum share
issuance by New Gold under the Offer, New Gold's 2013 forecasted gold
production and Rainy River's expected ongoing work at its mineral
projects. This forward-looking information is subject to numerous
risks, uncertainties and assumptions, certain of which are beyond the
control of Rainy River and/or New Gold, including risks relating to
acquisitions, including, without limitation, conditions to the Offer
not being satisfied. Other risks include the impact of general economic
conditions; industry conditions; volatility of metals prices;
volatility of commodity prices; currency fluctuations; mining risks;
risks associated with foreign operations; governmental and
environmental regulation; competition from other industry participants;
the lack of availability of qualified personnel or management; stock
market volatility; the ability of New Gold to complete or successfully
integrate an announced acquisition proposal; unexpected costs or
unexpected liabilities related to the acquisition. Readers are
cautioned that the material assumptions used in the preparation of such
information, although considered reasonable at the time of preparation,
may prove to be imprecise. Actual results, performance or achievement
could differ materially from those expressed in, or implied by, this
forward-looking information and, accordingly, no assurance can be given
that any of the events anticipated by the forward-looking information
will transpire or occur, or if any of them do so, what benefits that
Rainy River and/or New Gold will derive therefrom. New Gold and Rainy
River disclaim any intention or obligation to update or revise any
forward-looking information, whether as a result of new information,
future events or otherwise except as required by applicable securities
SOURCE: New Gold Inc.
For further information:
New Gold Inc.
Vice President, Corporate Development
Direct: +1 (416) 324-6014
Rainy River Resources Ltd.
Director, Investor Relations
Direct: +1 (416) 645-7289