Page 48 By Gregory Reynolds The acquisition of junior explorer Rainy River Resources by interme diate producer New Gold Inc is part of the restructuring of the gold indus try as a result of the world gold price bouncing around but with an overall decline The friendly takeover involving cash and shares was priced at over 300 million when it was original ly made on May 31 What New Gold got was the estimat ed four million ounce Rainy River project in Northwestern Ontario New Gold has a portfolio of four pro ducing assets and two signifcant de velopment projects The combination of the New Afton Mine in Canada the Cerro San Pedro Mine in Mexico the Mesquite Mine in the United States and the Peak Mines in Australia posi tions New Gold as one of the lowest cost producers in the industry In 2013 the company is forecasting between 440000 and 480000 ounc es of gold production In addition to its four operating mines New Gold owns 100 of the Blackwater project in Canada and 30 of the worldclass El Morro project located in Chile New Gold grabs Rainy River as industry shakeup continues Rainy River was a Canadian precious metals explora tion company whose key asset was the Rainy River Gold Project a lar ge gold system centred in Richardson T ownship part of Chap ple T ownship approximately 65 ki lometres northwest of Fort Frances Ontario As at March 31 2013 the company had approximately 90 million in cash and cash equivalents The project is accessed by a network of roads and is close to hydroelectric infrastructure The Rainy River dis trict has a skilled labour force and is one of the lowestcost areas for min eral exploration and development in Canada Ontario has low political risk and ac cording to the annual Fraser Institute global survey of the mining industry has consistentl y ranked as one of the top jurisdictio ns embracing mineral development By Aug 8 New Gold had 975 of all outstanding shares of Rainy River triggering a compulsory acquisition of the remaining shares under the British Columbia Business Corporati ons Act The C383ashare of fer represented a premium of 67 to the volume weighted average price of Rainy River shares on the TSX for the 20 trading days ended May 30 the last trading day before the announcement of New Gold s intention to make the of fer was frst made Rainy River shareholders who ten dered their shares between July 25 and Aug 8 2013 and who elected the cash option would receive 197 in cash and 0243 New Gold shares for each share tendered and those who elected the share option would re ceive 05 New Gold shares subject in each case to adjustment for fraction al shares and to confrmatio n of the number of Rainy River shares validly tendered Rainy River s fagship asset is an ad vancedexplorationstage gold proj ect in Ontario which has a National Instrument 43101compliant gold re serve of four million ounces On July 10 the Metis Nation of On tario and Rainy River announced that they have signed a Memorandum of Understanding to guide their working relationship in regard to the develop ment of the Rainy River Gold Project