New Gold and Western Goldfields combine in stock-and-cash transaction

By Lisa Kerner

Charlotte, N.C., June 1 - New Gold Inc. and Western Goldfields, Inc. completed their previously announced plan of arrangement.

In March, New Gold announced that it agreed to acquire Western Goldfields for a combination of stock and cash.

Western Goldfields shareholders received one New Gold common share and C$0.0001 in cash per share of Western Goldfields.

Western Goldfields stock options were replaced by options to purchase New Gold shares, and Western Goldfields warrants are now exercisable for New Gold shares.

The arrangement was approved by New Gold and Western Goldfields shareholders on May 13 and 14, respectively, and received court approval on May 27.

New Gold said it issued approximately 143 million common shares of New Gold to the former shareholders of Western Goldfields and authorized the issuance of an additional 12 million common shares upon the exercise of the stock options and warrants.

As previously reported, chairman of Western Goldfields Randall Oliphant will lead the combined company as executive chairman while New Gold president and chief executive officer Robert Gallagher will be the president and CEO of the combined company.

The combined company's board of directors will include six current directors of New Gold and four current directors of Western Goldfields.

New Gold is a Vancouver, B.C.-based mining company, and Western Goldfields is a Toronto-based gold producer.

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