By Robb M. Stewart
Gold miner New Gold has moved to secure full control of its New Afton mine in Western Canada with a deal to buy the outstanding stake from Ontario Teachers' Pension Plan for $300 million at a time when the price of the precious metal is nudging fresh highs.
New Gold said Monday it entered an agreement to acquire pension fund's 19.9% free cashflow interest in the British Columbia mine, fully consolidating ownership of the gold and copper operation.
The purchase will be funded through cash on hand, borrowings from an existing revolving credit facility and roughly $100 million in gold prepayment financing that obligated New Gold to deliver a set number of gold ounces over a one-year term.
Gold prices have soared above $3,000 a troy ounce as worries about trade tariffs and economic growth have spurred investors to seek out perceived safe-haven assets. Against that backdrop, a number of miners of the metal have moved to secure mining assets.
Last month, Toronto-based Agnico Eagle boosted its interest in an early-stage gold-exploration project in Colombia with a deal for a greater stake in Collective Mining. On Monday, Wesdome Gold Mines moved to buy Angus Gold in a deal with an enterprise value of about 40 million Canadian dollars ($28.1 million) that will greatly expand the property it controls around its Eagle River mine in Northern Ontario.
New Gold said its New Afton mine is on the verge of exceptional production growth and cost improvement that should lead to increased free cashflow generation. The deal to secure control of the operation offers no integration risk and equity dilution to shareholders, President and Chief Executive Patrick Godin said.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
April 07, 2025 07:12 ET (11:12 GMT)
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