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Friday, 6th March 2009 (1565 views)

New Gold has announced that it has agreed a deal to purchase Western Goldfields.

The Vancouver-based firm will merge with its Toronto-based rival to create a "leading intermediate gold producer".

Under the terms of the business combination deal, New Gold will acquire all of the outstanding common shares of Western Goldfields in exchange for one New Gold common share and CDN$0.0001 (£0.000055) in cash in exchange for each common share of Western Goldfields.

Once the transaction has been completed, New Gold shareholders will receive around 58 per cent of the merged company, while Western Goldfields shareholders will own approximately 42 per cent.

The combined firm will have diversified gold production from three mines with forecasted production of 335,000 ounces in 2009, predicted to reach 400,000 ounces in 2012.

New Gold is a gold mining business with projects in Mexico, Australia, Canada and Chile, while gold production and exploration company Western Goldfields owns the Mesquite mine in North America.

 

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