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New Gold Inc (TSE:NGD)
:NGD

New Gold (NGD) AI Stock Analysis

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New Gold

(NYSE MKT:NGD)

66Neutral
New Gold demonstrates a promising financial recovery with improved profitability and strong cash flow management. Technical indicators suggest a stable underlying trend, although with some short-term caution. While the stock's valuation is high, the optimistic earnings call guidance for increased production and reduced costs supports a positive growth outlook. This positions New Gold for potential future gains, though investors should be aware of the current high valuation and absence of dividends.
Positive Factors
Financial Performance
NGD reported third-quarter adjusted EPS of $0.08/sh, beating ours and consensus estimates of $0.05/sh and $0.04/sh.
Mineral Reserves
New Afton's Copper and Gold Mineral Reserve inventories increased, allowing the company to extend the mine life by one year.
Production Milestones
NGD announced the completion of significant production milestones at New Afton and Rainy River.
Negative Factors
Analyst Rating
Reiterate Rating: UNDERPERFORM given a higher relative unit cost base and higher leverage.
Gold Production
Q4’24 consolidated gold production below forecasts; copper better than expected.
Production Guidance
Management has lowered FY24 production guidance from 310koz-350koz to 300koz-310koz.

New Gold (NGD) vs. S&P 500 (SPY)

New Gold Business Overview & Revenue Model

Company DescriptionNew 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. It also operates the Cerro San Pedro mine in San Luis Potosí, Mexico. The company was incorporated in 1980 and is headquartered in Toronto, Canada.
How the Company Makes MoneyNew Gold Inc. generates its revenue primarily through the extraction and sale of gold, silver, and copper. The company's revenue model is based on the production output from its mining operations, where gold is the predominant metal produced. Revenue is influenced by factors such as metal prices, production volumes, and operational efficiencies. The company also engages in forward sales and hedging contracts to mitigate market price volatility, which can impact revenue stability. Strategic partnerships and joint ventures in exploration and production activities further contribute to its revenue streams by expanding its resource base and optimizing operational costs.

New Gold Financial Statement Overview

Summary
New Gold showcases a strong financial turnaround with notable improvements in revenue growth and profitability. The balance sheet reflects moderate leverage, but asset management has room for enhancement. Despite high capital expenditures, cash flow metrics indicate robust cash management and operational efficiency.
Income Statement
72
Positive
New Gold has shown a strong revenue growth of 17.57% in the latest year, indicating positive sales momentum. Gross Profit Margin for 2024 stands at 26.03%, while Net Profit Margin improved significantly from negative in 2023 to 11.10% in 2024. The EBIT and EBITDA margins are 19.71% and 36.67%, respectively, reflecting improved operational efficiency and profitability. The company has effectively turned around its performance, moving from a net loss to a positive income, showcasing resilience and strong recovery.
Balance Sheet
65
Positive
The company maintains a healthy equity position with a Debt-to-Equity Ratio of 0.38, indicating moderate leverage. Return on Equity has improved significantly to 9.75%, a positive indicator of shareholder value creation. However, the Equity Ratio stands at 52.52%, which is reasonable but suggests room for improvement in asset management. The reduction in cash reserves is a potential risk, but overall balance sheet stability supports the company’s financial health.
Cash Flow
68
Positive
New Gold has demonstrated strong cash flow management with a Free Cash Flow growth rate of 460.37% over the past year. The Operating Cash Flow to Net Income ratio is 3.83, highlighting efficient cash generation relative to income. The Free Cash Flow to Net Income ratio of 1.19 indicates that the company is successfully converting income into cash, supporting its operational and strategic initiatives. Despite high capital expenditures, the company has managed to improve its cash flow significantly.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
924.50M786.50M604.40M745.50M643.40M
Gross Profit
240.70M336.10M78.10M172.50M110.40M
EBIT
182.30M61.80M-18.40M137.30M81.40M
EBITDA
339.10M182.90M177.50M322.90M167.70M
Net Income Common Stockholders
102.60M-64.50M-66.80M140.60M-79.30M
Balance SheetCash, Cash Equivalents and Short-Term Investments
110.30M192.60M236.40M541.00M231.70M
Total Assets
2.00B2.29B2.24B2.48B2.25B
Total Debt
399.70M401.20M396.20M501.70M508.70M
Net Debt
294.50M215.70M195.40M20.20M322.40M
Total Liabilities
951.50M1.50B1.28B1.52B1.46B
Stockholders Equity
1.05B789.20M959.50M955.90M789.30M
Cash FlowFree Cash Flow
121.70M21.70M-102.20M76.40M10.60M
Operating Cash Flow
392.80M287.60M190.70M323.70M294.80M
Investing Cash Flow
-263.40M-234.00M-281.90M57.40M-173.20M
Financing Cash Flow
-207.80M-68.60M-185.00M-86.50M-21.90M

New Gold Technical Analysis

Technical Analysis Sentiment
Negative
Last Price4.27
Price Trends
50DMA
4.41
Negative
100DMA
4.13
Positive
200DMA
3.80
Positive
Market Momentum
MACD
0.26
Negative
RSI
74.45
Negative
STOCH
87.55
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:NGD, the sentiment is Negative. The current price of 4.27 is below the 20-day moving average (MA) of 4.78, below the 50-day MA of 4.41, and above the 200-day MA of 3.80, indicating a neutral trend. The MACD of 0.26 indicates Negative momentum. The RSI at 74.45 is Negative, neither overbought nor oversold. The STOCH value of 87.55 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:NGD.

New Gold Peers Comparison

Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSNGD
66
Neutral
C$3.38B24.2811.14%18.32%
47
Neutral
$2.36B-3.00-21.73%3.58%3.97%-28.71%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:NGD
New Gold
4.27
1.88
78.66%
AEM
Agnico Eagle
99.48
39.53
65.94%
GOLD
Barrick Gold
17.67
0.36
2.08%
EGO
Eldorado Gold
16.16
1.09
7.23%
KGC
Kinross Gold
11.79
5.47
86.55%
AUGG
Augusta Gold
0.69
-0.16
-18.82%

New Gold Earnings Call Summary

Earnings Call Date: Feb 19, 2025 | % Change Since: 3.64% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Positive
The earnings call presented a positive outlook with significant achievements in cost management, project milestones, and financial performance. While there were some production challenges, the overall sentiment remains optimistic due to future growth projections and cost reductions.
Highlights
Achievement of Key Project Milestones
At New Afton, commercial production at C-Zone was achieved, and the crusher and conveyor systems were commissioned. Rainy River mined the first development ore from the underground Main Zone, all on budget and ahead of schedule.
Strong Financial Performance
The company reported cash flow from operations of over $390 million and free cash flow of $85 million. Fourth quarter revenue was a record $262 million, with net earnings of $55 million.
Improvement in Cost Management
Consolidated all-in sustaining costs for the quarter were $1,018 per ounce, a decrease of 15% from the third quarter, with New Afton achieving an all-in sustaining cost of negative $540 per ounce after considering copper credits.
Projected Growth and Cost Reduction
Gold production is expected to increase by 30% over three years, and copper production is expected to increase by 90%. The consolidated all-in sustaining cost is expected to decrease by 64% by 2027.
Lowlights
Gold Production Miss
Despite strong cost management, there was a slight miss in gold production compared to updated guidance.
Mechanical Downtime at Rainy River
Gold production in the fourth quarter was impacted by unexpected mechanical downtime on the crushing conveyance system in December.
Company Guidance
During the New Gold's Fourth Quarter and Full Year 2024 Earnings Call, the company reported significant accomplishments and provided guidance for 2025. New Gold achieved close to 300,000 ounces of gold and 54 million pounds of copper production at an all-in sustaining cost of $1,239 per ounce, beating the low end of their guidance range. The company generated over $390 million in cash flow from operations and $85 million in free cash flow. Key project milestones included achieving commercial production at New Afton's C-Zone and mining the first development ore from Rainy River's underground Main Zone. Updated technical reports extended mine lives and increased net asset value. Looking forward, New Gold expects to increase gold production to a midpoint of 410,000 ounces by 2027, with copper production rising to 405 million pounds. By 2027, they anticipate reducing all-in sustaining costs to $400-$500 per gold ounce, projecting over $1.7 billion in free cash flow within three years. The company plans to maintain exploration momentum and manage capital expenditures efficiently, setting up for sustained free cash flow generation.

New Gold Corporate Events

Financial Disclosures
New Gold to Release Q1 2025 Results and Host Conference Call
Neutral
Apr 3, 2025

New Gold Inc. announced it will release its first quarter 2025 operational and financial results on April 29, 2025, followed by an earnings conference call and webcast on April 30, 2025. This announcement is significant for stakeholders as it provides insights into the company’s financial health and operational performance, potentially impacting its market positioning and investor relations.

Executive/Board ChangesShareholder MeetingsRegulatory Filings and Compliance
New Gold Announces Management Circular Mailing and Board Changes
Neutral
Mar 31, 2025

New Gold Inc. has announced the mailing of its Management Information Circular for its upcoming annual general and special meeting of shareholders, scheduled for May 6, 2025. The meeting will be held virtually to ensure accessibility for all shareholders. Margaret Mulligan will be resigning from the Board of Directors, and the company has expressed gratitude for her significant contributions over the past seven years. Additionally, New Gold has filed its Annual Information Form and Annual Report on Form 40-F with the relevant regulatory authorities, making these documents available online and in hard copy upon request.

Private Placements and FinancingBusiness Operations and Strategy
New Gold Concludes Tender Offer for 2027 Senior Notes
Neutral
Mar 14, 2025

New Gold Inc. announced the expiration and results of its tender offer for its 7.50% Senior Notes due 2027, with 72.21% of the principal amount tendered. The company plans to use proceeds from a new issuance of 6.875% Senior Notes due 2032 to purchase the tendered notes, with settlement expected on March 18, 2025. This financial maneuver aims to optimize New Gold’s debt structure and potentially improve its financial standing, although there is no assurance that untendered notes will be redeemed.

Executive/Board ChangesBusiness Operations and Strategy
New Gold Appoints Travis Murphy as Vice President of Operations
Positive
Mar 11, 2025

New Gold Inc. has appointed Travis Murphy as Vice President of Operations, effective March 24, 2025. Murphy, a seasoned mining professional with over 18 years of experience, is expected to enhance New Gold’s operational leadership with his strategic planning and values-based leadership. His previous roles at Newmont and Pretivm Resources, along with his commitment to safety, align with New Gold’s objectives of delivering safe production and achieving free cash flow goals.

Private Placements and FinancingBusiness Operations and Strategy
New Gold Prices $400 Million Senior Notes to Optimize Debt Structure
Positive
Mar 4, 2025

New Gold Inc. has announced the pricing of a $400 million offering of 6.875% Senior Notes due in 2032. The net proceeds from this offering, along with cash on hand, will be used to fund the purchase of its outstanding 7.50% senior notes due in 2027. This financial maneuver is part of a tender offer to purchase any and all of the existing notes, which is contingent upon the successful completion of the new notes offering. This strategic move is expected to optimize New Gold’s debt structure and potentially improve its financial flexibility, which could have positive implications for its stakeholders and market positioning.

Private Placements and FinancingBusiness Operations and Strategy
New Gold Launches $400 Million Senior Notes Offering
Positive
Mar 4, 2025

New Gold Inc. has announced a $400 million senior notes offering to fund a tender offer for its outstanding 7.50% senior notes due 2027. The proceeds will be used to purchase existing notes and cover related expenses, with any remaining funds used to redeem outstanding notes. This financial maneuver is part of New Gold’s strategy to manage its debt obligations and strengthen its financial position, potentially impacting its market standing and providing reassurance to stakeholders.

Private Placements and FinancingBusiness Operations and Strategy
New Gold Announces Tender Offer for 7.50% Senior Notes
Neutral
Mar 4, 2025

New Gold Inc. has announced a cash tender offer to purchase any and all of its outstanding 7.50% senior notes due 2027. This move is part of a broader financial strategy that includes a potential redemption of untendered notes and a contemporaneous notes offering to fund the tender offer and related expenses. The tender offer is set to expire on March 13, 2025, with settlement expected shortly thereafter. This initiative may impact the company’s financial structure and stakeholder interests, depending on the success of the notes offering and the tender offer’s outcome.

Business Operations and StrategyFinancial Disclosures
New Gold Exceeds Cost Guidance, Boosts Cash Flow and Ownership in 2024
Positive
Feb 19, 2025

New Gold Inc. reported strong financial results for the fourth quarter and full year 2024, surpassing its guidance on all-in sustaining costs and achieving robust free cash flow. The company produced 298,303 ounces of gold at all-in sustaining costs of $1,239 per ounce, below the lower end of its guidance. Despite challenges late in the year, New Gold maintained solid cash flow while investing in growth projects that are expected to boost future production. The company increased its ownership interest in the New Afton project to 80.1% by repurchasing a stake from the Ontario Teachers’ Pension Plan.

Business Operations and Strategy
New Gold Extends Mine Life and Projects Strong Cash Flow
Positive
Feb 12, 2025

New Gold Inc. has announced mine life extensions for its New Afton and Rainy River mines, projecting strong free cash flow over the next three years. The company has increased its mineral reserves, particularly at New Afton, with significant improvements in both copper and gold reserves without additional capital costs. The expansion at Rainy River is set to extend the open pit mine life, ensuring continuous mill operations until 2029. These developments are expected to increase production, reduce costs, and support long-term growth opportunities, thereby strengthening New Gold’s market position.

Executive/Board ChangesBusiness Operations and Strategy
New Gold Announces Management Change, Eyes Future Growth
Positive
Feb 3, 2025

New Gold Inc. announced a senior management change as Yohann Bouchard, Executive Vice President and Chief Operating Officer, has departed the company effective January 31, 2025. This transition is seen as an opportunity for new operational leadership, with President & CEO Patrick Godin expressing excitement about presenting the company’s operational outlook and updated technical reports, which will highlight the company’s ability to maximize free cash flow generation in the upcoming years.

New Gold Reports Record Production Quarter Amid Strategic Advancements
Jan 9, 2025

New Gold Inc. reported its highest production quarter for 2024, with significant achievements at its New Afton and Rainy River mines. New Afton exceeded its gold production guidance, despite Rainy River facing operational challenges in December. The company plans to release updated technical reports to demonstrate its strategies for increased production and cost efficiency. Overall, New Gold’s 2024 gold production was slightly below its updated guidance, while copper production met expectations, with costs expected to be at the low end of the guidance range.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.