New Gold (TSX:NGD) is very keen on the prospect of gold contained in rocks 160 kilometres south-west of Prince George.
On Monday, the Vancouver-based gold producer, which has mines in the U.S., Mexico and Australia, tendered two deals to take total control of the Blackwater project and significantly increase its land package in central B.C.
The deals would see New Gold acquire Silver Quest Resources (TSX-V:SQI) and Geo Minerals (TSX-V:GM) for $131 million and $17 million respectively.
The transaction to acquire Silver Quest provides New Gold with the final piece of the puzzle it needs to take full control over the Blackwater gold project.
New Gold acquired a majority interest in the Blackwater project from Richfield Ventures earlier this year in a deal valued at $513 million. (See “New Gold snaps up Blackwater project for $513 million” – BIV Business Today, April 4.)
In September, an updated resource estimate for the project showed it could contain as much as 6.52 million ounces of gold in indicated and inferred categories, which are the metrics Canadian resource companies use to outline their projects.
New Gold’s decision to acquire Geo Minerals adds 1,470 hectares of land to the company’s holdings immediately north-west of Blackwater.
On top of that, the Silver Quest takeover also includes the Capoose property 25 kilometres west of Blackwater.
At press time, New Gold’s shares were down $0.38 to $11.42 per share, while Silver Quest’s were up $0.26 to $1.13 and Geo’s were up $0.03 to $0.15.
Joel McKay
Twitter:jmckaybiv