New Gold Inc. (TSX:NGD; NYSE Amex:NGD), a gold producer that has grown through a series of recent business combinations, is bolstering its war chest to the tune of $100 million.
The Vancouver-based company said Friday a syndicate of underwriters led by BMO Capital Markets and GMP Securities L.P. has agreed to buy on a bought-deal basis 26.7 million common shares at a price of $3.75 per share for gross proceeds of $100,125,000.
The net proceeds of the offering will be used for general corporate purposes.
An intermediate gold mining company with three operating assets the Mesquite mine in the U.S., Cerro San Pedro Mine in Mexico and Peak Mines in Australia New Gold is expected to produce between 330,000 and 360,000 ounces of gold in 2009, growing to more than 400,000 ounces in 2012.
The company is also building New Afton, an underground mine in B.C. It's annual production, which is scheduled to start in the second half of 2012, is estimated at 85,000 ounces of gold and 75 million pounds of copper.
New Gold had cash and cash equivalents of US$141.1 million as of June 30, 2009. Its debt is US$272.1 million, but most of it is not due until 2017, well after the scheduled start of New Afton production.
New Gold reported a net loss before adjustments of US202.8 million for the second quarter ended June 30 compared with a net loss of US$4.8 million in the same period in 2008.
The bulk of the loss was attributed to a one-time goodwill impairment charge of approximately US$189.6 million related to a recent $1.2 billion merger with Western Goldfields Inc.
Adjusted net earnings, however, were US$10.6 million.
The offering is expected to close on or about September 11 and is subject to the company's receiving regulatory approvals.
The other underwriters in the syndicate are Canaccord Capital Corp., RBC Dominion Securities Inc., Scotia Capital Inc., TD Securities Inc., National Bank Financial Inc., Paradigm Capital Inc. and Wellington West Capital Markets Inc.
By press time, New Gold shares on the Toronto Stock Exchange were trading at $3.75, down 6.25% from before the announcement of the offering.
The shares reached a 52-week high of $6.39 last September before crashing to $0.94 by December as the world economic crisis set in and commodity prices plunged.