New Gold Increases Exposure In New Afton Copper/Gold Mine To 80.01%, Ontario Teachers' Free Cash Flow Interest In New Afton Will Be Reduced From 46.0% To 19.9% In Exchange For An Upfront Cash Payment Of $255M From New Gold; Launches $150M Bought Deal Financing
Portfolio Pulse from Benzinga Newsdesk
New Gold Inc. (NGD) has announced an agreement to increase its free cash flow interest in the New Afton Mine to 80.1% by reducing Ontario Teachers' Pension Plan's interest from 46.0% to 19.9%. This change comes with an upfront cash payment of $255 million from New Gold to Ontario Teachers'. To fund this payment, New Gold will use cash on hand, borrowings, and proceeds from a $150 million bought deal equity financing.
May 13, 2024 | 8:30 pm
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POSITIVE IMPACT
New Gold Inc. is significantly increasing its stake in the New Afton Mine, which could enhance its future revenue and cash flow from the mine. The deal is financed through a mix of cash, borrowings, and a substantial equity financing effort.
Increasing its stake in the New Afton Mine could be seen positively as it enhances New Gold's asset base and potential for increased cash flows. However, the financing method, particularly the equity financing, could dilute current shareholders' stakes, which might temper the positive outlook. The net impact is likely positive in the short term due to the growth in assets and potential revenue, but investor sentiment could be mixed due to the dilution effect.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100