On May 13, 2024, New Gold Inc. announced an agreement relating to its strategic partnership with Ontario Teachers’ Pension Plan at the New Afton Mine, a gold and copper mine outside of Kamloops in British Columbia, increasing New Gold’s effective free cash flow interest in New Afton from 54% to 80.1% in exchange for an upfront payment of US$255 million.
In addition, New Gold raised US$172.7 million through a bought deal financing led by CIBC World Markets. The company used the net proceeds of the offering to partly fund the transaction, along with cash on hand, and borrowings from its existing revolving credit facility.
The transaction is expected to deliver a meaningful increase in attributable life-of-mine cash flow while maintaining New Gold’s balance sheet strength and financial liquidity.
Davies Ward Phillips & Vineberg LLP acted as counsel to New Gold with a team that included Richard Fridman, Aaron Atkinson and Yevgeniya Huggins (Private M&A); Steven Cutler, Robin Upshall, Robert Murphy, Avani Verma and Srobona Podder (Capital Markets); Steven Willard (Real Estate); and Christopher Anderson (Tax).
MLT Aikins LLP, Cox & Palmer, and Lawson Lundell LLP acted as B.C. counsel to New Gold.
Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as U.S. counsel to New Gold.
Borden Ladner Gervais LLP acted as Canadian counsel to the underwriters with a team led by Tim McCormick that included Frazer House, Jennifer Jiang and Emily Milana.
Skadden, Arps, Slate, Maegher & Flom LLP acted as U.S. counsel to the underwriters.
Stikeman Elliott LLP acted as counsel to Ontario Teachers’ Pension Plan with a team that included Jeffrey Singer, Steve Bennett, and Taisa Morsky (Corporate/Mining); Julie D'Avignon, John O'Connor and Gordon Masson (Tax).
