New Gold sells Blackwater for $190M

New Gold (TSX: NGD; NYSE-AM: NGD) is selling its Blackwater project in central B.C. to Artemis Gold (TSXV: ARTG) for $190 million in cash.

Under the deal, New Gold will be paid $140 million upon closing and $50 million in 12 months. It will also receive a stream on 8% of the gold produced at Blackwater and $20 million in Artemis shares for a 9.9% stake in the company. The gold stream falls to 4% once New Gold receives the first 280,000 oz. of gold.

“We believe that surfacing value for Blackwater today, while retaining exposure to the project through a retained gold stream and an equity position in Artemis, allows the company to transition to the next phase of our growth plan as we continue to reposition the company for shareholder value creation,” Renaud Adams, New Gold’s president and CEO, stated in prepared remarks.

The project is about 160 km southwest of Prince George and 446 km northeast of Vancouver and currently has 8.2 million oz. of gold in proven and probable reserves and 60.8 million oz. of silver. The project’s measured and indicated resource, exclusive of reserves, stands at 1.4 million oz. gold and 8.9 million oz. silver.