GICS Sector : Basic Materials
New Gold Inc., an intermediate gold mining company, engages in the exploration, development, and operation of mineral properties.It primarily explores for gold, silver, and copper deposits.The company's principal operating properties include 100% interests in the Rainy River mine located in Ontario, Canada; and New Afton mine situated in British Columbia, Canada.
New Gold's third-quarter 2025 earnings call highlighted the company's robust financial performance, with revenue reaching $463 million, driven by the production of 115,200 ounces of gold and 12 million pounds of copper. The all-in sustaining cost came in at $966 per ounce, a 19% decrease from the same quarter in 2024. The company's earnings per share (EPS) was $0.246, slightly lower than the estimated $0.264. Cash from operations was $296 million, and the company generated a record quarterly free cash flow of $205 million. New Afton contributed significantly to this performance, with the B3 cave producing approximately 4,300 tonnes per day and generating over $30 million in free cash flow.
Publication Date: Nov -29
Rainy River achieved a record quarterly production of over 100,000 ounces of gold, a 63% increase from the second quarter. The company's gold production is expected to be above the midpoint of its guidance of 265,000 to 295,000 ounces. New Afton's C-Zone cave construction is 79% complete and on track to ramp up to full production in 2026. The company's operational performance was reinforced by Ankit Shah's statement that "C-Zone is on track to ramp up to full production in 2026," indicating a positive outlook for the coming year.
New Gold had cash on hand of $123 million and a liquidity position of $500 million. The company repaid $260 million in debt, including the $150 million drawn on the credit facility, one quarter ahead of plan. The company's clear methodology for capital allocation prioritizes a strong balance sheet, investment in exploration and organic opportunities, and capital return to shareholders. The company is evaluating a special dividend, share buyback, or a structured dividend, and will approach M&A with a goal of increasing value on a per share basis.
With a P/E Ratio of 26.68 and an EV/EBITDA of 11.65, the market is pricing in significant growth prospects for New Gold. Analysts estimate next year's revenue growth at 56.9%, indicating a positive outlook for the company's future performance. The company's ROE of 22.38% and ROIC of 18.0% also suggest a strong potential for future growth. As the company continues to deliver on its strategic goals, including ramping up C-Zone at New Afton and advancing exploration programs, investors may be looking for a revaluation of the stock.
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Rainy River's 7% growth is driven by increasing gold production, improved operating efficiencies, and higher gold prices. The mine's life extension and exploration success have also contributed to the growth. Additionally, New Gold Inc.'s focus on cost reduction and optimization initiatives have enhanced the segment's profitability.
New Afton's 9% growth is driven by increasing gold prices, improved operational efficiency, and higher copper by-product credits. The mine's life extension to 2030 and exploration potential also contribute to growth. Additionally, New Gold Inc.'s focus on cost reduction and balance sheet strengthening enables reinvestment in the mine, further supporting growth.
New Gold Inc. is a leading gold producer with a portfolio of mines and development projects in Canada and Australia.
New Gold Inc. also produces copper as a by-product of its gold mining operations.
Silver is another by-product of New Gold Inc.'s mining operations, often extracted alongside gold and copper.
New Gold Inc. offers exploration services to identify and develop new mineral deposits.
New Gold Inc. operates several mines across Canada and Australia, producing gold, copper, and silver.
New Gold Inc. operates in the gold mining industry, which has few substitutes. However, the company faces some threat from other precious metals like silver and copper.
New Gold Inc. sells its gold to a few large refineries and banks, which limits the bargaining power of customers. The company's large-scale operations also reduce the dependence on individual customers.
New Gold Inc. relies on suppliers for equipment, materials, and services. While the company has some bargaining power due to its large scale, suppliers can still exert some pressure, especially for specialized equipment and services.
The gold mining industry has high barriers to entry, including significant capital requirements, regulatory hurdles, and environmental concerns. This limits the threat of new entrants to New Gold Inc.
The gold mining industry is highly competitive, with many established players competing for market share. New Gold Inc. faces intense rivalry from companies like Barrick Gold, Goldcorp, and Kinross Gold.
| Value | |
|---|---|
| Debt Weight | 33.56% |
| Debt Cost | 3.95% |
| Equity Weight | 66.44% |
| Equity Cost | 11.93% |
| WACC | 9.25% |
| Leverage | 50.51% |
Value: 5.2
Growth: 8.4
Quality: 8.4
Yield: 0.0
Momentum: 10.0
Volatility: 4.3
1-Year Total Return ->
Value: 5.7
Growth: 9.2
Quality: 7.6
Yield: 0.0
Momentum: 10.0
Volatility: 2.7
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Value: 3.4
Growth: 9.9
Quality: 5.1
Yield: 0.0
Momentum: 10.0
Volatility: 2.3
1-Year Total Return ->
Value: 9.7
Growth: 8.6
Quality: 4.6
Yield: 0.0
Momentum: 5.0
Volatility: 0.7
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Value: 4.1
Growth: 4.3
Quality: 6.0
Yield: 0.0
Momentum: 10.0
Volatility: 3.3
1-Year Total Return ->
Value: 2.5
Growth: 6.9
Quality: 4.3
Yield: 0.0
Momentum: 9.5
Volatility: 3.7
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