New Gold gains a partner

Article Excerpt

NEW GOLD $4.43 (Toronto symbol NGD; SI Rating: Speculative) (888-315-9715; www.newgold.com; Shares outstanding: 388.8 million; Market cap: $1.7 billion; No dividends paid) has entered into an agreement with Goldcorp over the El Morro gold/copper project in Chile. Barrick Gold had previously agreed to pay $465 million for Xstrata plc’s 70% stake in El Morro. Instead, New Gold will exercise its right of first refusal on Xstrata’s 70% stake and then transfer it to Goldcorp. Goldcorp will pay New Gold $50 million in cash, and pay some of New Gold’s costs to develop its 30% share. Barrick is challenging the transaction, but Goldcorp and New Gold feel Barrick has no legal right to buy Xstrata’s interest. New Gold is still a buy. buy…