New Gold to Purchase Richfield Ventures in Acquisition Deal
Written BY: Kristin Craik
New Gold has agreed to acquire Richfield Ventures at a value of $10.38 per share for a total of $550 million. Part of this deal, New Gold will receive Richfields flagship asset, the Blackwater Project located in British Columbia.
The Blackwater Project is conveniently close to New Gold’s New Afton project, just 450 kilometres south. The project has an established production of approximately 1.8 million ounces, but has an estimated total gold mining completion of around 2 million ounces, leading to a good investment for New Gold.
"The acquisition of the Blackwater Project is an ideal fit with our goal of continuing to enhance value in jurisdictions where we already have a strong presence. This is an exciting gold project that we anticipate could significantly increase our gold production base at competitive cash costs in the years ahead," stated Randall Oliphant, New Gold Executive Chairman, in a statement.
As part of the acquisition, Richfield shareholders will retain continued exposure to the Blackwater project while gaining access to New Gold’s diversified gold project portfolio.
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"I am thrilled by this win-win transaction for both Richfield's shareholders and those of New Gold. The Blackwater Project will be in excellent hands with New Gold, a proven mine builder and operator, that has the financial capacity and the exploration and development expertise to continue to expand and ultimately develop the gold resources at Blackwater," said Peter Bernier, Richfield President and Chief Executive Officer, in a statement. "I am proud of the Richfield team's hard work in making this project into the success that it is today, and very excited going forward for our shareholders to own a meaningful portion of New Gold. This will allow us not only to participate in the continued advancement of Blackwater, but also to be part of New Gold's exciting growth portfolio."Mining Industry Human Resources Council Digs Investment
The acquisition, unanimously approved by the Board of Directors by both companies, will be subject to shareholder approval.