VANCOUVER, Oct. 11, 2012 /CNW/ - 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.