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.
Nice call, BMR. You made some followers of BMR very happy with this pick. Keep up the good work.
Comment by Wayne — April 4, 2011 @ 6:02 am
This looks good for GM–tsx venture. They are right in the middle of RVC. Geo minerals.
Comment by STEVE — April 4, 2011 @ 6:26 am
Isn’t Troymet next door to Richfield, how do you think this effects them if it does at all?
Comment by GREG H — April 4, 2011 @ 6:47 am
TYE is next door to Blackwater, interesting play…volatile but I like the long-term potential of it….
Comment by Jon - BMR — April 4, 2011 @ 7:08 am