VANCOUVER, July 10, 2015 /CNW/ - Newmarket Gold Inc. ("Newmarket Gold" or the "Company") (TSX:NMI) is pleased to announce the completion of its previously announced plan of arrangement (the "Arrangement") involving Newmarket Gold Inc. ("Newmarket") and Crocodile Gold Corp. ("Crocodile Gold") under the Business Corporations Act (Ontario), pursuant to which Newmarket and Crocodile Gold have combined to create a new gold industry consolidator solidly positioned to acquire high quality gold assets in the world's most desirable mining jurisdictions. In addition, immediately prior to the closing of the Arrangement, the proceeds of Newmarket's previously completed C$25 million subscription receipt financing were released from escrow and the underlying Company common shares have been issued. C$20 million of the proceeds are being used to fund the cash consideration payable to former Crocodile Gold shareholders who elected to receive cash in connection with the Arrangement, and the remaining C$5 million of the proceeds will be used to bolster the working capital position of the Company.
The Arrangement is expected to provide significant benefits for shareholders, including the creation of a strong gold producing company with enhanced capital markets exposure and access to capital. The Company will benefit from Crocodile Gold's strong asset base, excellent operating team, established gold production of over 200,000 ounces per year and track record of free cash flow generation from the Fosterville, Stawell and Cosmo underground gold mines in Australia.
As of June 30, 2015, the Company had a pro-forma cash and bullion balance (at fair market value) of approximately US$39.4 million, before proceeds from the subscription receipt financing and all transaction costs associated with the Arrangement. Following completion of the Arrangement, Newmarket has approximately 134.2 million common shares issued and outstanding and Luxor Capital Group LP ("Luxor") now controls approximately 41.6% of Newmarket Gold on an issued and outstanding basis. As per the terms of the lock-up agreement entered into by Luxor, Luxor has agreed not to dispose of more than 20% of the securities of Newmarket Gold it owns for a period of 12 months. The common shares of Newmarket Gold have been conditionally approved to trade on the Toronto Stock Exchange ("TSX") and it is expected that the common shares will commence trading on the TSX under the new symbol "NMI" on or about July 14, 2015.
Douglas Forster, President and Chief Executive Officer, Newmarket Gold, stated: "Today, by completing our merger with Crocodile Gold, the Company moves forward with a solid foundation of quality gold production, free cash flow generation and a large gold resource base that supports the execution of our ongoing gold asset consolidation strategy. With our outstanding senior management team, a proven operating team and a board of directors with tremendous industry experience, the Company is focused on creating substantial shareholder value through continued sustainable operating performance from our three existing operations and through advancing our disciplined approach to growth. I would like to thank our employees and contractors for their dedication and service, our management team and board of directors and also the shareholders of both Crocodile Gold and Newmarket for their overwhelming support of the transaction."
The management team and senior staff of the Company draws from the extensive expertise of both Newmarket and Crocodile Gold and includes:
- Raymond Threlkeld: Non-Executive Chairman
- Douglas Forster, M.Sc., P.Geo.: President and Chief Executive Officer
- Rodney Lamond, P.Eng.: Chief Operating Officer
- Blayne Johnson: Executive Vice President
- Robert Dufour, CA, CPA: Chief Financial Officer
- Douglas Hurst, B.Sc.: Vice President Corporate Development
- Jason Gregg, BBA, MBA: Vice President Human Resources and Environment, Health and Safety
- Ryan King: Vice President Corporate Communications
- Paulo Santos, CA: Treasurer and Corporate Secretary
- Laura Lepore: Director, Investor Relations
The Company has also assembled an experienced board of directors with a proven track record of substantial shareholder value creation. The board is comprised of seven directors including: Raymond Threlkeld, Douglas Forster, Blayne Johnson, Lukas Lundin, Randall Oliphant, Robert Getz and Kevin Conboy.
The Company's Australian operations team is headed by a seasoned group of industry professionals including:
- Ian Holland, General Manager, Fosterville Gold Mine
- Jason Morin, General Manager, Cosmo Gold Mine
- Troy Cole, General Manager, Stawell Gold Mine
- Mark Edwards, General Manager, Exploration
Financial and Legal Advisors
Newmarket retained GMP Securities L.P. to act as financial advisor and Cassels Brock & Blackwell LLP to act as legal advisor.
Crocodile Gold retained Salman Partners Inc. to act as financial advisor and Bennett Jones LLP to act as legal advisor.
ON BEHALF OF THE BOARD
Douglas Forster, M.Sc., P.Geo.
President & Chief Executive Officer
About Newmarket Gold Inc.
Newmarket Gold is a Canadian-listed gold mining and exploration company with three 100% owned operating mines across Australia. The Company is focused on creating substantial shareholder value by maintaining a strong foundation of quality gold production, over 200,000 ounces annually, generating free cash flow and maintaining a large resource base as it executes a clearly defined gold asset consolidation strategy. The Company is focused on sustainable operating performance, a disciplined approach to growth, and building gold reserves and resources while maintaining the high standards that the Newmarket Gold core values represent.
Cautionary Note Regarding Forward Looking Information
Certain information set forth in this news release contains "forward-looking statements", and "forward-looking information under applicable securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements, which include the Company's expectations about its business and operations, and are based on the Company's current internal expectations, estimates, projections, assumptions and beliefs, which may prove to be incorrect. Some of the forward-looking statements may be identified by words such as "will", "expects", "anticipates", "believes", "projects", "plans", and similar expressions. These statements are not guarantees of future performance or outcomes and undue reliance should not be placed on them. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements or forward-looking information. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. The Company does not undertake to update any forward-looking statements or forward-looking information that are included in this press release or incorporated by reference herein, except in accordance with applicable securities laws.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States.
SOURCE Newmarket Gold Inc.