New Gold paid for the acquisition with New Gold shares valued at about C$16.6 million.

“The acquisition of Bayfield further consolidates our position in the Rainy River district,” New Gold's Vice President of Corporate Development Hannes Portmann said. “By adding these three properties within and adjacent to our project area, it simplifies our development plans, increases our gold and silver mineral resources, and adds to our prospective land package.”

New Gold’s Rainy River project is located in Richardson Township, Ontario, approximately 65 km northwest of the town of Fort Frances. The property has access to excellent infrastructure, with year-round road access and power lines in close proximity. Current planning contemplates a 21,000-mt/d processing rate from a combination of open-pit, underground and stockpiled ore.

The project is expected to produce more than 225,000 oz/y of gold at below industry average costs. New Gold expects to process higher-grade ounces in the project’s early years, while stockpiling lower grades for processing toward the end of the mine life.

A feasibility study completed in January 2014 estimated development capital costs for the project at $885 million, inclusive of a $70 million contingency. Commissioning was targeted for late 2016, with the first year of full production in 2017. Mine life was projected at 14 years.