Dallas, Texas 10/18/2013 (Financialstrend) – In what seems like a game of second guessing the Fed, a host of gold mining firms and goal trading houses have seen a big surge in the their stock valuation during trading on October 17. The thinking behind this surge goes something like this. The debt deal that was finalized late on October 16 in the U.S. Congress is being seen as a temporary arrangement which will last till February. With the uncertainly likely to return in 1Q next year, most gold related traders are betting on Fed not rocking the boat by reducing its asset purchases. This reasoning has driven the gold futures price to go up by close to 3.2% during trading yesterday. New Gold Inc. (USA) (NYSEMKT:NGD) also participated in the rally and posted a healthy 5.3% increase in its market valuations.
An additional reason for New Gold stock to be in demand can be ascribed to the announcement the company made on October 16. The gold mining firm had successfully completed the acquisition of 2.5% of stake in Rainy River Resources Ltd. With this latest round of purchases, New Gold Inc. (USA) (NYSEMKT:NGD) has gained control of 100% of the shares outstanding in Rainy River. Shareholders of Rainy River will get $2.00 in cash and 0.23 part of one New Gold issued share of common stock in exchange of one Rainy River share. The total cost of this 2.5% stake acquisition is hovering around $5.6 million in cash and issuing of close to 0.7 million new shares outstanding of common stock by NewGold.
Executive Chairman of New Gold, Randall Oliphant has been quoted to have stated that “We are pleased to have completed the acquisition of Rainy River and look forward to advancing it through the various stages of development as we have managed to do through the development of Mesquite, Cerro San Pedro and New Afton.”