New Gold sells Peak mines for $58m
JOHANNESBURG (miningweekly.com) – TSX-and NYSE-listed intermediate gold miner New Gold has entered into a binding agreement with ASX-listed Aurelia Metals to sell its Peak mines in Cobar, New South Wales, Australia for a cash consideration of $58-million.
Aurelia intends to fund the transaction through a combination of a A$45-million debt facility provided by Investec Group and an equity placement in the order of A$70-million.
Aurelia's largest shareholder, Pacific Road Capital Management, has committed to subscribe for up to A$35-million in the equity raising and to increase its interest in the company 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 if the transaction is not completed.
"Peak has generated significant value for New Gold and predecessor companies over its 25 years of operation," said New Gold CEO Hannes Portmann in a statement.
He added that 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 team [and] strong track record of performance, [as well as] unlocking its longer-term potential,” he added.
The transaction is subject to customary closing conditions, including Aurelia shareholder approval of a portion of the equity financing.
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