Western Goldfields, WGI.to/WGW
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Posted: Wednesday Mar 4 8:16:35AM 2009
New Gold Buys Western Goldfields for C$314.6 Million (Update2)
By Stewart Bailey
March 4 (Bloomberg) -- New Gold Inc., the Canadian miner that produces precious metal in Mexico and Australia, agreed to buy Western Goldfields Inc. for about C$314.6 million ($243.9 million) to gain the Mesquite mine in California.
Western Goldfields investors will receive one New Gold share and 0.01 of a Canadian cent for each share they hold, Vancouver- based New Gold said today in a statement. The offer is 19 percent higher than Western Goldfields’ closing price yesterday.
The combined company would have three gold mines with production of about 335,000 ounces this year and will be able to fund development of the New Afton project in British Columbia. The transaction will help New Gold in its goal of producing 1 million ounces a year by 2012.
New Gold fell 17 cents, or 7.4 percent, to C$2.13 as of 9:31 a.m. in Toronto Stock Exchange trading. The shares rose 30 percent this year through yesterday. Western Goldfields, based in Toronto, gained 14 cents, or 7.3 percent, to C$2.07.
Western Goldfields’ Mesquite mine in California is forecast to produce as much as 150,000 ounces of gold this year at a cash cost of $530 to $540 an ounce, New Gold said.
New Gold said it will have $171 million in cash, $77 million in asset-backed commercial paper investments and $275 million of debt when the transaction is completed. Either party would be liable for a C$8.8 million breakup fee if they don’t proceed with the deal under “certain circumstances,” the companies said.
Two-thirds of Western Goldfields shareholders present at a special meeting in May must approve the deal, the company said. Western Goldfields shareholders will own 42 percent of the new entity, New Gold said.
New Gold said it is advised by Macquarie Capital Markets Canada Ltd. and Lawson Lundell. Western Goldfields’ financial adviser is BMO Capital Markets and its counsel is Cassels Brock & Blackwell.
To contact the reporter on this story: Stewart Bailey in New York at firstname.lastname@example.org.
Posted: Saturday Jan 31 11:30:28AM 2009
WGI.to/WGW Big move at the end of the week to C$2.40
CEO was on BNN on Thursday, which I think helped stock. Also recommended by another analyst on BNN as a top pick.
Posted: Friday Jan 16 3:34:22PM 2009
t.WGI/WGW +.18 to C$1.97 Positive mention of WGW. I have been hearing more talk of Mexico becoming a higher risk country due to the drug wars AND decline in oil exports, which funds a good portion of the social services budget of Mexico. WGW has one mine in California. The company earned .22eps in Q3 with .14 due to one time mark to market derivative gain. So .07 operating earnings.
Produces almost 200,000 oz per year with cash costs of $390/oz and they have been hedging fuel costs to lock in the current low oil prices. 50% of their fuel costs, which represent 20% of operating expenses have now been fixed for 2009 and 2010.
Has good cash position at 45 million and rising as of 11/4/08.
WGW may be a good way to minimize country risk while retaining the upside of an undervalued junior.
WGI also has the advantage of a US stock listing. If gold juniors take off, WGW will look very good with profitable operations, cash and US operations. Bobwins
Posted: Monday Dec 15 7:34:39AM 2008
Western Goldfields is a profitable goldminer that just started profitable production at a mine in California. They produced 42K oz last qtr and had a profit of .22eps including .14 derivative gains. So mine is cashflow positive, they have 45 million in cash and an unused credit line of 18.6 million.
They are done with major capex. They are slated to produce 150K oz in 09, 180 in 2010 and 200Koz in 2011.
Proved/probable of 2.8million oz plus 1.5 inferred resources.
Looks very undervalued just based on profits, cash and reserves.