VANCOUVER,
Oct. 11, 2012 /PRNewswire/ - New Gold
Inc. ("New Gold") (TSX and NYSE MKT:NGD) announces that on
November 20, 2012 ("Redemption
Date"), the company will redeem all of its outstanding 5%
subordinated convertible debentures due June
28, 2014 (CUSIP 644535AB2 and ISIN 644535AB24)
("Debentures"). The aggregate principal amount of the Debentures
currently outstanding is C$55
million. New Gold is able to redeem the Debentures early as
its share price has traded at a 25% premium to the C$9.35 per share conversion price for a period of
30 days on a volume weighted average basis. As a result of the
early redemption, New Gold eliminates the requirement to repay
C$55 million in debt in mid-2014, as
well as the interest payments that would have been incurred in the
period between redemption and June 28,
2014.
"We are proud that the strong performance of our
equity has put us in a position to redeem the Debentures well in
advance of their mid-2014 due date," stated Brian Penny, Chief Financial Officer. "The early
redemption further simplifies our balance sheet and enhances our
financial flexibility."
On redemption, New Gold will issue to the
registered holders of the Debentures, for each C$1,000 principal amount of Debentures held, that
number of common shares ("Common Shares") obtained by dividing such
principal amount by 95% of the current market price ("Current
Market Price") of the Common Shares on the Redemption Date. No
fractional Common Shares will be issued and in lieu, the cash
equivalent will be determined and paid on the basis of the Current
Market Price on the Redemption Date. The Current Market Price is
defined as the weighted average trading price per Common Share on
the Toronto Stock Exchange for the 30 consecutive trading days
ending five trading days before the Redemption Date. All accrued
interest will be paid in cash.
Holders may convert their Debentures into Common
Shares at a conversion price of C$9.35 per Common Share at any time prior to
5:00 p.m. (PST) on November 19, 2012. Cash will be paid in lieu of
fractional shares. As of 5:00 p.m.
(PST) on the Redemption Date, any outstanding Debentures
shall be redeemed. If 100% of the Debentures are converted into
Common Shares prior to redemption, New Gold will issue 5,882,352
Common Shares in full satisfaction of the Debentures.
This news release does not constitute a notice
of redemption of the Debentures. The redemption of the Debentures
is made under New Gold's notice of redemption dated October 11, 2012 and delivered by the trustee
under the debenture indenture to the registered holders of the
Debentures. Debenture holders are encouraged to contact their
respective professional advisors and refer to New Gold's debenture
indenture, available through Computershare Trust Company of
Canada, for additional information
on redeeming or converting the Debentures.
About New Gold Inc.
New Gold is an intermediate gold mining company.
The company has a portfolio of four producing assets and two
significant development projects. New Gold's New Afton project met
its targeted June 2012 production
start and began commercial production ahead of schedule in
July 2012. Together with the Mesquite
Mine in the United States, the
Cerro San Pedro Mine in Mexico and
Peak Gold Mines in Australia, the
company is forecasting between 405,000 and 445,000 ounces of gold
production in 2012. In addition, New Gold owns 30% of the
world-class El Morro project located in Chile and 100% of the exciting Blackwater
project in Canada. For further
information on the company, please visit www.newgold.com.
Cautionary Note Regarding Forward-Looking
Statements
Certain information contained in this news
release, including any information relating to the redemption of
the Debentures and New Gold's future financial or operating
performance may be deemed "forward looking". All statements in this
news release, other than statements of historical fact, that
address events 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",
"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. All such forward-looking
statements are based on the opinions and estimates of management as
of the date such statements are made and are subject to important
risk factors and uncertainties, many of which are beyond New Gold's
ability to control or predict. 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: significant capital requirements; fluctuations
in the international currency markets and in the rates of exchange
of the currencies of Canada,
the United States, Australia, Mexico and Chile; price volatility in the spot and
forward markets for commodities; impact of any hedging activities,
including margin limits and margin calls; discrepancies between
actual and estimated production, between actual and estimated
reserves and resources and between actual and estimated
metallurgical recoveries; changes in international, national and
local government legislation in Canada, the United
States, Australia,
Mexico and Chile or any other country in which New Gold
currently or may in the future carry on business; taxation;
controls, regulations and political or economic developments in the
countries in which New Gold does or may carry on business; the
speculative nature of mineral exploration and development,
including the risks of obtaining and maintaining the validity and
enforceability of the necessary licenses and permits and complying
with the permitting requirements of each jurisdiction that New Gold
operates, including, but not limited to Mexico where the Cerro San Pedro mine has a
history of ongoing legal challenges related to our EIS and
Chile where the courts have
temporarily suspended the approval of the environmental permit for
the El Morro project; the lack of certainty with respect to foreign
legal systems, which may not be immune from the influence of
political pressure, corruption or other factors that are
inconsistent with the rule of law; the uncertainties inherent to
current and future legal challenges New Gold is or may become a
party to; diminishing quantities or grades of reserves;
competition; loss of key employees; additional funding
requirements; actual results of current exploration or reclamation
activities; changes in project parameters as plans continue to be
refined; accidents; labour disputes; defective title to mineral
claims or property or contests over claims to mineral properties.
In addition, there are risks and hazards associated with the
business of mineral exploration, development and mining, including
environmental hazards, industrial accidents, unusual or unexpected
formations, pressures, cave-ins, flooding and gold bullion losses
(and the risk of inadequate insurance or inability to obtain
insurance to cover these risks) as well as "Risk Factors" included
in New Gold's disclosure documents filed on and available at
www.sedar.com. 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 of
the 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.
SOURCE New Gold Inc.