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DEALS & CASES

Silver Quest Resources acquired by New Gold in $125 million stock swap transaction

December 2011
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On December 23, 2011, Silver Quest Resources Ltd. (TSXV: SQI) and New Gold Inc. (TSX: NGD) (AMEX: NGD) announced that New Gold had completed its acquisition of all the shares of Silver Quest. Under the terms of the court approved arrangement, 10.5 million New Gold common shares were issued to former Silver Quest securityholders on the basis of 0.09 of a New Gold share for each Silver Quest share and nominal cash consideration.

As a result of the completion of the arrangement, New Gold acquired Silver Quest's 25% interest in the Davidson Property and a 100% interest in the Capoose Property.

Silver Quest will cease to be a reporting issuer and New Gold will continue as a reporting issuer.

As part of the arrangement, for every three Silver Quest shares held, Silver Quest shareholders received one common share in a new precious metals-focused exploration company, Independence Gold Corp. New Gold holds 9.9% of the outstanding shares of Independence Gold with the former Silver Quest shareholders holding the remaining 90.1%. The TSX Venture Exchange approved the listing of the common shares of Independence Gold and the company's common shares commenced trading on the TSXV on December 29, 2011 under the stock symbol "IGO".

Gowlings advised Silver Quest in this transaction with a team that included Cyndi Laval, Stuart Breen, James Isaac, Yong-Jae Kim, Michael Macaulay and Irene Chen (securities), Brent Kerr (tax), Geoff Howard (employment), Jonathan Van Netten (litigation) and Steven Willard (real estate).


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