“New Gold is a natural regional partner for Talisker and their investment highlights the potential synergies for both companies and is a strong endorsement of our corporate strategy and the potential of Bralorne and our other greenfield projects.”
Talisker has announced a non-brokered private placement of flow-through shares, selling 37.4 million shares, at $0.51 a share, for proceeds of C$19.1 million. Once the offering is complete, New Gold will acquire 37.4 million shares, for a 14.9% pro-forma interest.
The two companies have also entered into an investor rights agreement, effective as long as New Gold maintains at least a 10% ownership in Talisker. These include New Gold’s right to appoint a nominee to Talisker’s board and participate on a pro-rata basis in future financings to keep a 14.9% interest with top-up rights to maintain its stake in the event of dilutive events.
In exchange, New Gold has agreed that, for 24 months, it will be present at Talisker’s shareholder meetings and not vote against matters unanimously approved by the board with a 24-month standstill prohibiting New Gold from acquiring more than 14.9% of the explorer’s shares.
Closing of the offering is expected around Apr. 15.
The latest deal is New Gold’s second equity investment in less than a week – on Mar. 19, the two-asset producer announced that it was also taking a 14.9% stake in producer Harte Gold (TSX: HRT); Harte’s Sugar zone mine is in northern Ontario, 30 km north of White River. New Gold’s Rainy River mine in northwestern Ontario is 65 km from Fort Frances.
(This article first appeared in the Canadian Mining Journal)
