New Gold Inc.: Meeting of Noteholders Called
25 April 2008 - 4:16PM
Marketwired
TORONTO, ONTARIO
New Gold Inc. (the "Company" or "New Gold") (TSX: NGD)(AMEX:
NGD) announced today that it has mailed to the holders of its 10%
Subordinated Notes an information circular in connection with the
Meeting of Noteholders on May 9, 2008 to approve certain amendments
to the Note Indenture dated as of June 27, 2007. The amendments are
required to enable New Gold to proceed with the proposed business
combination announced on March 31, 2008 (the "Transaction") by
which the Company, Metallica Resources Inc. ("Metallica") and Peak
Gold Ltd. ("Peak") will combine under the name New Gold Inc. with a
market capitalization of approximately U.S.$1.6 billion. The
Transaction is subject to shareholder approvals of each company and
to the fulfillment of a number of conditions, including the
approval of the Noteholders to the proposed amendments to the Note
Indenture.
Mr. Cliff Davis, the President of the Company, noted: "When the
Note Indenture was entered into in June, 2007 the Company had one
development project, the New Afton Mine, and no subsidiaries and
the Note Indenture reflected this. As the merged company will have
several projects and will operate through a number of subsidiaries,
certain of the covenants in the Note Indenture as they presently
stand would unduly restrict the manner in which the new entity
could carry on business while denying to the Company the
anticipated improved credit worthiness as a result of the
Transaction. Therefore, it is necessary to request the Noteholders
to approve certain changes. The directors of New Gold have
unanimously recommended that the amendments be approved." The
proposed amendments include:
- Removing the permit test and replacing it with a more general
covenant that the Company shall work diligently toward obtaining
and, once obtained, maintaining in good standing, all permits
required for the operation of its properties;
- Providing for security on the New Afton Project in favour of
the Noteholders;
- Creating a mechanism for cash flow movement between the
Company and the new subsidiaries including mandatory offers to
redeem a portion of the Notes annually;
- Renaming the Notes as "Senior Secured Notes";
- Providing for the issue pro rata to the Noteholders of
4,150,000 warrants to purchase common shares of the Company prior
to June 28, 2017 for the exercise price of $15.00 per common share,
subject to regulatory approval; and
- Certain other technical and housekeeping changes.
The changes are described in detail in the Circular mailed to
Note holders and filed on SEDAR and the Amended and Restated
Indenture is included with the Circular.
New Gold has had discussions with institutional holders of the
Notes, both with respect to certain housekeeping amendments
approved prior to the announcement of the Transaction and with
respect to the amendments included in the Amended and Restated
Indenture.
Marret Asset Management Inc., a significant holder of the Notes,
participated in the structuring of the original Note issue and the
amendment discussions. Barry Allan, President of Marret, stated
that: "The Transaction together with the proposed amendments to the
Note Indenture results in a significant enhancement to the credit
quality of the Notes. In addition to security being provided over
the New Afton Project, the Notes will now be supported by three
operating assets, increased operating cash flows, and a
significantly stronger balance sheet. We believe that the
combination of the three companies along with the proposed
amendments will enhance the value to all stakeholders."
The March 31, 2008 letter agreement includes a condition
precedent in favour of Metallica and Peak, pursuant to which
Metallica and Peak will not be obligated to complete the
Transaction if the terms of the Notes have not been amended to the
satisfaction of Metallica and Peak. The directors of Metallica and
Peak have approved the proposed amendments.
The amendments will be made pursuant to an Extraordinary
Resolution of the Noteholders which requires a quorum of
Noteholders representing more than 51% of the principal amounts of
the Notes being represented at the Meeting and note less than 66
2/3% so represented voting in favour. The Company may seek approval
by written resolution of holders of not less than 66 2/3% of the
principal amount of the Notes. If written approval is obtained in
advance of the meeting, the Company will cancel the Noteholders
meeting. If approved, the Amended and Restated Indenture will
become effective on the date of the closing of the Transaction. The
Extraordinary Resolution includes a waiver of provisions of the
indenture replaced in the Amended and Restated Indenture. The
waiver will expire on the earlier of (A) September 30, 2008 or (B)
seven day after the date on which shareholders of any of the
companies do not approve the Transaction at any meeting called to
approve the combination. Noteholders may, thereafter, exercise all
of their rights and remedies under the original Note Indenture and
the Amended and Restated Indenture will have no effect.
Certain of the statements made and information contained herein
is "forward- looking information" within the meaning of the
Securities Act (Ontario) and the Securities Act (Alberta) or
"forward-looking statements" within the meaning of Section 21E of
the Securities Exchange Act of 1934 of the United States.
Forward-looking statements are subject to a variety of risks and
uncertainties which could cause actual events or results to differ
from those reflected in the forward-looking statements, including,
without limitation, risks and uncertainties relating to the
interpretation of drill results and the estimation of mineral
resources and reserves, the geology, grade and continuity of
mineral deposits, the possibility that future exploration,
development or mining results will not be consistent with the
Company's expectations, metal recoveries, accidents, equipment
breakdowns, title matters and surface access, labour disputes or
other unanticipated difficulties with or interruptions in
production, the potential for delays in exploration or development
activities or the completion of feasibility studies, the inherent
uncertainty of production and cost estimates and the potential for
unexpected costs and expenses, commodity price fluctuations,
currency fluctuations, failure to obtain adequate financing on a
timely basis and other risks and uncertainties, including those
described under Risk Factors in the Company's Annual Information
Form and in each management discussion and analysis.
Forward-looking information is in addition based on various
assumptions including, without limitation, the expectations and
beliefs of management, the assumed long term price of copper and
gold, that the feasibility study will confirm that a technically
viable and economic operation exists, that the Company will receive
required permits and access to surface rights, that the Company can
access financing, appropriate equipment and sufficient labour and
that the political environment within British Columbia and Canada
will continue to support the development of environmentally safe
mining projects so that the Company will be able to commence the
development of the New Afton project within the timetable to be
established by the feasibility study. Should one or more of these
risks and uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially
from those described in forward-looking statements. Accordingly,
readers are advised not to place undue reliance on forward-looking
statements.
Cautionary note to U.S. investors concerning estimates of
Measured and Indicated Resources, and the use the terms "measured"
and "indicated resources." We advise U.S. investors that, while
those terms are recognized and required by Canadian regulations,
the U.S. Securities and Exchange Commission does not recognize
them. U.S. investors are cautioned not to assume that any part or
all of mineral deposits in these categories will ever be converted
into reserves.
WARNING: The Company relies upon litigation protection for
"forward-looking" statements.
Contacts: New Gold Inc. Mr. Cliff Davis President and Chief
Executive Officer (416) 977-1067 or Toll free: 1-877-977-1067 New
Gold Inc. Laura Sandilands Manager of Investor Relations (416)
977-1067 or Toll free: 1-877-977-1067 New Gold Inc. 70 University
Avenue Toronto, Ontario M5J 2M4
New Gold (TSX:NGD)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
New Gold (TSX:NGD)
Historical Stock Chart
Von Jul 2023 bis Jul 2024