Gold price up over 1%, closing in on new record
Bullion is now 18% higher for the year, boosted by anticipation of Fed loosening as well as significant buying by central banks.
Vancouver-based New Gold Inc. (TSX:NGD) plans to add an estimated four million ounces of gold reserves in Ontario through a friendly takeover of Rainy River Resources Ltd. (TSX:RR).
New Gold has formally initiated the takeover that will see it acquire all of Rainy River’s outstanding shares. It will offer Rainy River common shareholders half a share in New Gold stock ($3.83 in cash).
At close of markets Tuesday, New Gold shares were trading at $6.59 per share; Rainy River shares were trading for $3.55 per share.
The acquisition adds a four-million-ounce gold reserve near Fort Frances, Ontario, New Gold said in a press release.
“The acquisition of Rainy River is consistent with our strategy of identifying opportunities to create shareholder value,” said New Gold executive chairman Randall Oliphant.
“We have followed Rainy River for some time and see this as an opportune time to add this great asset to our portfolio. We view the combination of Rainy River’s ideal location, sizeable reserve, robust production potential and experienced team as presenting a truly compelling opportunity.”
By Nelson Bennett
