5:45 am Pacific
New Gold Inc. (NGD, TSX) and Richfield Ventures Corp. (RVC, TSX-V) have signed a definitive agreement whereby New Gold will acquire, through a plan of arrangement, all of the outstanding common shares of Richfield. Under the terms of the arrangement, each Richfield shareholder will receive 0.9217 of a New Gold share for each Richfield share held. The offer values Richfield at $10.38 per share or approximately $550 million, representing a 31% premium to Richfield’s April 1, 2011 closing price and a 46% premium based on each company’s 20-day volume weighted average price. The transaction value, net of cash and proceeds from all in-the-money dilutive instruments, is approximately $513 million.
Richfield outlined approximately 4 million ounces of Gold in the indicated and inferred categories at its Blackwater Project in central British Columbia in a NI-43-101 resource estimate released March 2.
The buy-out appears to be a nice fit for New Gold whose New Afton Project in British Columbia is on target to start production by the middle of next year.
Richfield closed Friday at $7.93 and will obviously gap up this morning.
BMR introduced Richfield to its readers in December, 2009, when the stock was trading at $1.20 per share.
4 Comments
Nice call, BMR. You made some followers of BMR very happy with this pick. Keep up the good work.
This looks good for GM–tsx venture. They are right in the middle of RVC. Geo minerals.
Isn’t Troymet next door to Richfield, how do you think this effects them if it does at all?
TYE is next door to Blackwater, interesting play…volatile but I like the long-term potential of it….