* New Gold to fully own Blackwater project in British Columbia
* Silver Quest to get additional C$35 mln for stake in spin-off
* New co to focus on exploration in Yukon, British Columbia
* New Gold to also buy Geo Minerals for C$0.16 a share
* Shares of Geo, Silver Quest up 29 pct (Adds details on deal value, Geo Minerals deal, capex, New Gold comments)
By Gowri Jayakumar
Oct 17 (Reuters) - Silver Quest shareholders will get C$131 million from a sale of the company to New Gold , and C$35 million from their stake in McIntyre Minerals, the precious metals company New Gold will create to ramp up exploration in Yukon and British Columbia.
Vancouver-based New Gold, which holds a majority stake in Blackwater, a bulk-tonnage gold project in British Columbia, will also acquire Silver Quest’s portion in the project to become its sole owner.
The company also offered to buy Geo Minerals for about 16 Canadian cents a share, and plans to retain Geo’s Blackwater assets. New Gold will transfer Geo’s remaining assets to the new company, it said in a separate statement.
“The acquisition of Silver Quest’s Davidson interest and the Capoose Property consolidates our ownership of the Blackwater project and expands our presence significantly in the area,” said Randall Oliphant, New Gold’s executive chairman.
New Gold, which has a capital budget of C$300 million for the year, does not expect the Blackwater consolidation to hike its expenditures significantly, Hannes Portmann, the company’s vice president, corporate development, told Reuters.
“We need to get an understanding of how large this resource could become before we have any formal studies done on potential economics. Blackwater is still a few years away from production.”
Under the deal, Silver Quest shareholders will receive 0.09 New Gold shares and 1 common share of McIntyre for every 4 Silver Quest shares held. Geo shareholders will get 1 common share of McIntyre for every 15 Geo common shares held.
McIntyre will be led by the management and board of Silver Quest, and will have about C$15 million in cash to fund its exploration activities this year and the next, New Gold said.
The offer price of C$1.06 a share is at a 22 percent premium to Silver Quest’s Friday close. The deal is expected to close in December.
Shares of both Silver Quest and Geo were up over 29 percent on Monday on the Toronto Venture Exchange, while New Gold shares were down 3 percent at C$11.43 on the Toronto Stock Exchange. (Reporting by Gowri Jayakumar in Bangalore; Editing by Roshni Menon, Maju Samuel)