New Gold (TSX and NYSE MKT: NGD) announced this morning it will be buying Rainy River (TSX: RR) for 0.5 common share or $3.83 cash.
Official News Release
This is a perfect example of what the production companies look to buy:
Gold Reserve: 4 Million Oz and growing
Production: 200,000 oz+ per year
Total Cash Cost: Below industry average (est. $675)
Jurisdiction: Canada (safe)
Cash Balance: $90 Million
Development Cost (EST): $793 Million
Infrastructure: Close by
With such a bad market, it is a good deal for New Gold who take the opportunity of such a depressed exploration market.
I don't own any of the two company.
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