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Strategies & Market Trends : Ride the Tiger with CD

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From: dara	3/4/2009 7:29:29 AM
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New Gold Inc. and Western Goldfields Inc. Announce Business Combination Building a Leading Intermediate Gold Producer (All figures are in US dollars unless otherwise stated) VANCOUVER, March 4 /PRNewswire-FirstCall/ - New Gold Inc. ("New Gold") (TSX and NYSE Alternext - NGD) and Western Goldfields Inc. ("Western Goldfields") (TSX - WGI and NYSE Alternext - WGW) today announce that they have entered into a definitive agreement pursuant to which New Gold will acquire by way of a plan of arrangement all of the outstanding common shares of Western Goldfields in exchange for one New Gold common share and CDN$0.0001 in cash for each common share of Western Goldfields (the "Transaction"). Upon completion of the Transaction, existing New Gold and Western Goldfields shareholders will own approximately 58% and 42% of the combined company, respectively. Based on the closing price of New Gold's common shares on the TSX of CDN$2.30 on March 3, 2009, the day prior to announcement of the transaction, this offer represents a premium of 19.2% to the closing price of Western Goldfields shares on the TSX on March 3, 2009 and 20.1% to the 20-day volume weighted average trading price of both companies' shares on the TSX. Highlights of the Transaction: - Diversified gold production base from three gold mines in mining friendly jurisdictions with forecasted gold production of approximately 335,000 ounces in 2009, expected to grow to over 400,000 ounces in 2012 - Strong cash flow to fully fund the development at the New Afton gold-copper project in British Columbia - Delivers on industry consolidation in a rising gold price environment - Combines experienced management teams and boards of directors - Enhances market presence - Increases mineable reserves totaling 7.6 million gold ounces within a measured and indicated resource of 12.2 million gold ounces news.prnewswire.com

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