New Gold (TSX: NGD; NYSE: NGD) closed its recently announced bought deal equity financing, raising $235.8 million (US$172.7 million). The company issued approximately 100.4 million common shares, including 13.1 million shares as an underwriters’ overallotment.
New Gold says it will use the net proceeds to fund a portion of the cash payment to complete the previously announced agreement relating to its strategic partnership with Ontario Teachers’ Pension Plan Board. The arrangement will see the company increase its effective free cash flow interest in the New Afton copper-gold mine to 80.1%. The pension’s interest in the mine will fall to 19.9% from 46%.
The buyback is expected to give the company increased free cash flow interest in the mine, as the C zone reaches commercial production in the second half of 2024. The added cash will also support New Gold’s exploration activities in the area.
The New Afton is located 10 km west of Kamloops, BC. It produced 47.4 million lb. copper and 67,433 oz. gold in 2023. Those numbers were up 46% and 53%, respectively, from a year earlier. The mine has proven and probable reserves of 34.1 million tonnes grading 0.73% copper, 0.67 g/t gold, and 1.69 g/t silver. The reserves contain 551 million lb. copper, 735,000 oz. gold, and 1.9 million oz. silver.
In addition, the mine has measured and indicated resources of 74.0 million tonnes grading 0.70% copper, 0.57 g/t gold, and 2.14 g/t silver. In terms of contained metals, this represents another 1.1 billion lb. copper, 1.4 million oz. gold, and 5.1 million oz. silver.
There is also an inferred resource of 10.2 million tonnes at 0.45% copper, 0.33 g/t gold, and 1.36 g/t silver.
Additional information about the New Afton mine and New Gold’s Rainy River gold mine in Ontario can be found on www.NewGold.com.
