New Gold Announces $15 Million Prepayment of, and Amendment to the Mesquite Mine Term Loan Facility and Board Update
07 Oktober 2009 - 2:29PM
PR Newswire (US)
(All figures are in US dollars unless otherwise stated) VANCOUVER,
Oct. 7 /PRNewswire-FirstCall/ -- New Gold Inc. ("New Gold") (TSX
and NYSE AMEX: NGD) announces that it has agreed to amend the
Mesquite mine term loan facility and make a prepayment of $15
million. The prepayment reduces the outstanding principal of the
loan to $45.8 million, with scheduled repayment by June 30, 2012.
As at June 30, 2009, New Gold had $141 million of cash. In
addition, the company received gross proceeds of $107 million from
an equity financing which closed on September 11, 2009. After the
$15 million loan prepayment and a $3 million sweep payment, New
Gold has $250 million of outstanding debt. Randall Oliphant,
Executive Chairman of New Gold stated, "The Mesquite loan allowed
us to build the mine with minimal dilution to shareholders. We are
pleased with the amendments to the term loan facility and the
strong business partnership with Investec Bank plc ("Investec") and
the lending syndicate. Our strong cash position, coupled with cash
flow generated from operations, enabled us to make the loan
prepayment, reducing our overall debt outstanding, strengthening
our financial position and providing greater flexibility going
forward." The lending syndicate, lead by Investec, now considers
the development of Mesquite complete and has released the guarantee
provided by Western Goldfields Inc. In addition, the remaining
available commitment of $18.6 million, which New Gold no longer
requires, has been cancelled along with all related costs to the
company. The revised interest rate is US dollar LIBOR plus 4.25%
and New Gold paid an approval fee of $229,000. The term loan
facility is now repayable by June 30, 2012 unless the company
chooses to repay the loan early or the sweep mechanism comes into
effect. New Gold has increased flexibility in considering its
options with respect to the gold hedge program, a required
condition precedent to the loan facility, that now extends two and
half years beyond the revised term to December 31, 2014, the
original term prior to prepayment. Approximately 165,000 ounces of
gold, or approximately half of the program, are hedged beyond June
30, 2012 and may be terminated by New Gold. New Gold also announced
a change to its Board of Directors. Paul Sweeney has stepped down
from the New Gold Board of Directors effective September 21, 2009,
due to other commitments. We would like to take this opportunity to
thank Mr. Sweeney for his invaluable contributions to the Board of
New Gold and wish him continued success in future endeavours. About
New Gold New Gold is an intermediate gold mining company with three
operating assets; the Mesquite Mine in the United States, Cerro San
Pedro Mine in Mexico and Peak Mines in Australia. For the period of
New Gold ownership of the Mesquite Mine, the company is expected to
produce between 270,000 and 300,000 ounces of gold in 2009, growing
to over 400,000 ounces in 2012 and has significant reserves and
resources with a strong portfolio of mining, development and
exploration assets in mining friendly jurisdictions. For further
information on New Gold, please visit http://www.newgold.com/.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Certain
information contained in this press release, including any
information relating to New Gold's future financial or operating
performance may be deemed "forward looking". All statements in this
press 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 words "expects", "does not expect",
"plans", "anticipates", "does not anticipate", "believes",
"intends", "estimates", "projects", "potential", "scheduled",
"forecast", "budget" and similar expressions, or that events or
conditions "will", "would", "may", "could", "should" or "might"
occur. All such forward looking statements 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 New Gold's 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: New Gold's anticipated
synergies from the business combination with Western Goldfields
Inc. may not be realized; there may be difficulties in integrating
the operations and personnel of New Gold; significant capital
requirements; fluctuations in the international currency markets
and in the rates of exchange of the currencies of Canada, the
United States, Australia, Brazil, 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 national
and local government legislation in Canada, the United States,
Australia, Brazil, 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 necessary licenses
and permits; 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 "Risks Factors"
included in New Gold's Annual Information Form filed on March 31,
2009 and Management Information Circular filed on April 15, 2009,
both available at http://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 press 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. DATASOURCE: New Gold Inc. CONTACT:
Melanie Hennessey, Vice President, Investor Relations, New Gold
Inc., Direct: (604) 639-0022, Toll-free: (888) 315-9715, Email: ,
Website: http://www.newgold.com/
Copyright