NEW GOLD CONSOLIDATES 100% INTEREST IN ITS NEW AFTON MINE
New Gold Inc. (NGD) has announced an agreement to acquire the remaining 19.9% free cash flow interest in its New Afton Mine from Ontario Teachers' Pension Plan for $300 million, consolidating its ownership to 100%. The transaction will be funded through cash on hand, existing credit facility, and a $100 million gold prepayment financing.
The gold prepayment arrangement will require delivery of gold ounces over 12 months, representing approximately 8% of the company's expected consolidated gold production during that period. The transaction is expected to close in early May 2025 and doesn't require shareholder approval.
The deal comes as New Afton enters a period of anticipated significant free cash flow growth, driven by increasing production and improved costs. The company has committed $17 million towards exploration in 2025, with a strong focus on K-Zone, following exceptional drill results from September 2024.
New Gold Inc. (NGD) ha annunciato un accordo per acquisire il restante 19,9% di interesse in flusso di cassa libero nella sua New Afton Mine dal Piano Pensionistico degli Insegnanti dell'Ontario per 300 milioni di dollari, consolidando la sua proprietà al 100%. La transazione sarà finanziata attraverso liquidità disponibile, una linea di credito esistente e un finanziamento di prepagamento di oro di 100 milioni di dollari.
Il contratto di prepagamento di oro richiederà la consegna di once d'oro nel corso di 12 mesi, rappresentando circa l'8% della produzione consolidata di oro prevista dall'azienda durante quel periodo. Si prevede che la transazione si chiuda all'inizio di maggio 2025 e non richiede l'approvazione degli azionisti.
L'accordo arriva mentre New Afton entra in un periodo di significativa crescita attesa del flusso di cassa libero, guidato dall'aumento della produzione e dalla riduzione dei costi. L'azienda ha impegnato 17 milioni di dollari per l'esplorazione nel 2025, con un forte focus sulla K-Zone, dopo risultati eccezionali dai sondaggi di settembre 2024.
New Gold Inc. (NGD) ha anunciado un acuerdo para adquirir el restante 19.9% de interés en flujo de efectivo libre en su New Afton Mine del Plan de Pensiones de los Maestros de Ontario por 300 millones de dólares, consolidando su propiedad al 100%. La transacción se financiará a través de efectivo disponible, una línea de crédito existente y un financiamiento de prepago de oro de 100 millones de dólares.
El acuerdo de prepago de oro requerirá la entrega de onzas de oro durante 12 meses, representando aproximadamente el 8% de la producción de oro consolidada esperada de la empresa durante ese período. Se espera que la transacción se cierre a principios de mayo de 2025 y no requiere la aprobación de los accionistas.
El acuerdo se produce mientras New Afton entra en un período de crecimiento significativo del flujo de efectivo libre, impulsado por el aumento de la producción y la mejora de costos. La empresa ha comprometido 17 millones de dólares para exploración en 2025, con un fuerte enfoque en la K-Zone, tras resultados excepcionales de perforación de septiembre de 2024.
New Gold Inc. (NGD)는 온타리오 교사 연금 계획으로부터 New Afton Mine의 나머지 19.9%의 자유 현금 흐름 지분을 3억 달러에 인수하기로 합의했다고 발표했습니다. 이를 통해 소유권이 100%로 통합됩니다. 이번 거래는 보유 현금, 기존 신용 시설 및 1억 달러의 금 선지급 자금을 통해 자금 조달될 예정입니다.
금 선지급 계약은 12개월 동안 금 온스를 인도해야 하며, 이는 해당 기간 동안 회사의 예상 통합 금 생산량의 약 8%에 해당합니다. 거래는 2025년 5월 초에 마감될 것으로 예상되며, 주주 승인이 필요하지 않습니다.
이번 거래는 New Afton이 생산 증가와 비용 개선에 힘입어 자유 현금 흐름의 상당한 성장이 예상되는 시기에 이루어졌습니다. 회사는 2025년 탐사에 1,700만 달러를 투자할 예정이며, 2024년 9월의 뛰어난 시추 결과에 따라 K-Zone에 강력한 집중을 하고 있습니다.
New Gold Inc. (NGD) a annoncé un accord pour acquérir le reste de 19,9 % de l'intérêt en flux de trésorerie libre dans sa New Afton Mine auprès du Régime de retraite des enseignants de l'Ontario pour 300 millions de dollars, consolidant ainsi sa propriété à 100 %. La transaction sera financée par des liquidités disponibles, une ligne de crédit existante et un financement de prépaiement d'or de 100 millions de dollars.
L'arrangement de prépaiement d'or nécessitera la livraison d'onces d'or sur une période de 12 mois, représentant environ 8 % de la production consolidée d'or attendue de l'entreprise pendant cette période. La transaction devrait être finalisée début mai 2025 et ne nécessite pas l'approbation des actionnaires.
L'accord intervient alors que New Afton entre dans une période de croissance significative du flux de trésorerie libre, soutenue par une augmentation de la production et une amélioration des coûts. L'entreprise a engagé 17 millions de dollars pour l'exploration en 2025, avec un fort accent sur la K-Zone, suite à des résultats de forage exceptionnels de septembre 2024.
New Gold Inc. (NGD) hat eine Vereinbarung zur Übernahme des verbleibenden 19,9% Anteils am freien Cashflow in seiner New Afton Mine vom Ontario Teachers' Pension Plan für 300 Millionen Dollar bekannt gegeben, wodurch sich der Eigentumsanteil auf 100% konsolidiert. Die Transaktion wird durch vorhandenes Bargeld, eine bestehende Kreditfazilität und eine 100 Millionen Dollar schwere Gold-Vorauszahlungsfinanzierung finanziert.
Die Gold-Vorauszahlungsvereinbarung erfordert die Lieferung von Goldunzen über einen Zeitraum von 12 Monaten, was etwa 8% der erwarteten konsolidierten Goldproduktion des Unternehmens in diesem Zeitraum entspricht. Die Transaktion wird voraussichtlich Anfang Mai 2025 abgeschlossen und benötigt keine Zustimmung der Aktionäre.
Das Geschäft erfolgt zu einem Zeitpunkt, an dem New Afton in eine Phase mit voraussichtlich erheblichem Wachstum des freien Cashflows eintritt, das durch steigende Produktion und verbesserte Kosten vorangetrieben wird. Das Unternehmen hat 17 Millionen Dollar für Erkundungen im Jahr 2025 bereitgestellt, mit einem starken Fokus auf die K-Zone, nach außergewöhnlichen Bohrergebnissen im September 2024.
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Insights
New Gold's $300 million acquisition of Ontario Teachers' 19.9% free cash flow interest in New Afton represents a strategically sound consolidation with compelling financial characteristics.
The transaction structure is particularly noteworthy as it avoids equity dilution while still maintaining balance sheet flexibility. By funding through a combination of cash on hand, existing credit facility, and a $100 million gold prepayment arrangement, management demonstrates disciplined capital allocation. The gold prepayment effectively functions as a form of secured debt with physical delivery rather than cash repayment, creating a clean financing structure.
While committing approximately 8% of expected consolidated gold production for the delivery period, this represents a measured sacrifice of near-term output for complete ownership of future cash flows. The transaction essentially transforms a perpetual royalty-like obligation into a time-bounded delivery commitment.
Timing appears opportunistic, with New Afton entering its strongest production cycle as the C-Zone ramps up. The elimination of the $20 million change-of-control payment provision also removes a potential impediment to future corporate flexibility.
From a valuation perspective, acquiring the final ownership piece of an asset you already operate and understand intimately reduces execution risk substantially. The transaction price likely reflects a discount to what would be required for a new acquisition with similar cash flow characteristics, given the absence of integration risk or operational uncertainty.
This consolidation of the New Afton mine's economic interest comes at a pivotal operational inflection point. The C-Zone ramp-up marks a significant expansion phase that typically drives step-change improvements in production volume and unit cost profiles in underground block cave operations.
Block cave mining represents one of the most technically complex yet economically attractive underground mining methods, with high initial capital requirements but substantially lower operating costs once established. New Gold's mention of their "extensive block caving expertise" is particularly relevant, as this specialized mining method requires significant technical capabilities that many competitors lack.
The $17 million exploration commitment for 2025 focuses on the K-Zone, suggesting high confidence in near-mine resource expansion potential. In mature mining districts, near-mine exploration typically yields the highest return on investment compared to greenfield programs.
Full ownership consolidation provides New Gold complete operational flexibility to optimize mining sequences, capital allocation, and processing decisions without considering split economic interests. This streamlined decision-making is especially valuable during expansion phases and when evaluating mine life extension opportunities.
From an operational perspective, New Afton's location in British Columbia offers significant advantages: established infrastructure, skilled labor availability, and a stable mining jurisdiction. The company's reference to "social partnerships" indicates strong community relationships, increasingly critical for operational continuity in modern mining.
(All dollar figures are in US dollars unless otherwise indicated)
On closing of the Transaction, Ontario Teachers' free cash flow interest in New Afton will be fully eliminated in exchange for a cash payment of
Benefits to New Gold Shareholders
- Fully consolidates free cash flow from one of
Canada 's most attractive mines – New Afton is entering into a period of expected significant free cash flow growth driven by increasing production and improved costs. - Investment in an existing high-quality operation – New Gold has developed extensive block caving expertise and social partnerships in an exceptional location.
- Accretive and disciplined transaction – Fully consolidates ownership, gaining exposure to
100% of New Afton's life-of-mine cash flow with no equity dilution to New Gold's shareholders. New Gold will finance the Transaction by utilizing its strong balance sheet and significant near-term free cash flow, while maintaining financial discipline and flexibility. - Increased upside exposure – New Gold's focus on near-mine exploration activities, highlighted by exceptional drill results released in September 2024, provides New Afton with the potential to add substantial value by improving the production profile and extending mine life. The Company is committing
$17 million
"This is an excellent transaction allowing New Gold to fully consolidate the free cash flow exposure to one of
Gold Prepayment Financing
New Gold plans to fund a portion of the cash payment with approximately
Other Terms of the Transaction
At closing, the parties will terminate all existing agreements with respect to Ontario Teachers' free cash flow interest in New Afton, including the previously disclosed Ontario Teachers' right to a one-time cash payment of
Closing of the Transaction is subject to customary conditions and is expected to close at the beginning of May. The Transaction does not require shareholder approval.
About New Gold
New Gold is an intermediate gold mining company committed to responsible mining with a portfolio of two core producing assets in
Cautionary Note Regarding Forward-Looking Statements
Certain information contained in this news release, including any information relating to New Gold's future financial or operating performance are "forward-looking". All statements in this news release, other than statements of historical fact, which address events, results, outcomes or developments that New Gold expects to occur are "forward-looking statements". 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", "targeted", "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 of such terms. Forward-looking statements in this news release include, among others, statements with respect to: the Company's ability to successfully complete the Transaction and the timing thereof, including receipt of all required regulatory approvals; the proposed benefits of the Transaction to the Company's business, strategic objectives, financial condition, cash flows and results of operations and to its shareholders being attained, including with respect to increased free cash flow and the timing thereof; maintenance of balance sheet strength and financial liquidity, and expectation of entering into a period of cash flow driven by increased production and improved costs; expected spending on exploration spending and focus areas in 2025; the success of the production ramp up at New Afton's C-Zone project and the timing and expected benefits thereof; and the completion of the the gold prepay financing and the expected amount, terms and timing of such financing.
All forward-looking statements in this news release are based on the opinions and estimates of management that, while considered reasonable as at the date of this news release in light of management's experience and perception of current conditions and expected developments, are inherently subject to important risk factors and uncertainties, many of which are beyond New Gold's ability to control or predict. Certain material assumptions regarding such forward-looking statements are discussed in this news release, New Gold's latest annual management's discussion and analysis ("MD&A"), its most recent annual information form and technical reports on the Rainy River Mine and New Afton Mine filed on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov. In addition to, and subject to, such assumptions discussed in more detail elsewhere, the forward-looking statements in this news release are also subject to there being no significant disruptions affecting New Gold's operations, including material disruptions to the Company's supply chain, workforce or otherwise.
Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to known and unknown risks, uncertainties and other factors that may cause actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Such factors include, without limitation, the "Risk Factors" included in New Gold's most recent annual information form, MD&A and other disclosure documents filed on and available on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov. Forward looking statements are not guarantees of future performance, and actual results and future events could materially differ from those anticipated in such statements. All forward-looking statements contained in this news release are qualified by these cautionary statements. New Gold expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, events or otherwise, except in accordance with applicable securities laws.
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SOURCE New Gold Inc.
FAQ
What is the value of New Gold's acquisition of the remaining New Afton Mine interest?
How is New Gold funding the New Afton Mine acquisition in 2025?
What percentage of NGD's gold production is committed to the prepayment financing?
How much is New Gold investing in exploration at New Afton Mine in 2025?
When will New Gold's New Afton Mine acquisition close?
