Loading ...New Gold further increases cash flow certainty with gold option contracts
TORONTO, March 8, 2016 /CNW/ – New Gold Inc. (“New Gold”) (TSX:NGD) (NYSE MKT:NGD) today announces that the company has entered into gold price option contracts covering 270,000 ounces of New Gold’s remaining 2016 production. New Gold purchased put options with a strike price of $1,200 per ounce covering 270,000 ounces of gold and simultaneously sold call options with a strike price of $1,400 per ounce covering an equivalent 270,000 ounces. The contracts will cover 30,000 ounces of gold per month for nine months beginning in April 2016. The net cost of entering into the option contracts was $2 million. In aggregate, the option contracts provide the company a guaranteed floor price of $1,200 per ounce while also providing exposure to further increases in the gold price up to $1,400 per ounce. New Gold entered into the contracts in order to further increase cash flow certainty as the company invests in the continued construction of its Rainy River project, which is expected to begin production in mid-2017. –