New Gold to acquire exploration company Rainy River

Fri May 31, 2013 7:28am EDT
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TORONTO May 31 (Reuters) - New Gold Inc agreed on Friday to acquire gold exploration company Rainy River Resources Ltd for about C$310 million ($301 million) in a bid to expand its asset base in Canada.

New Gold is offering 0.5 of a New Gold common share for each Rainy River share tendered, or C$3.83 in cash. It said the offer represents a premium of 42 percent over Rainy River's closing price on the Toronto Stock Exchange on Thursday.

Toronto-based Rainy River owns the gold project of the same name located in northwestern Ontario. The project has about 4 million ounces in proven and probable gold reserves and some 6.2 million ounces in measured and indicated gold resources.