http://www.newgold.com
New Gold is an intermediate gold producer with various properties in North America, South America and Australia.
Australia: Peak Mines, in production.
El Morro - Chili: Feasibility study completed, Environmental Permit in progress
Cerro San Pedro - Mexico - in production
Mesquite - California - in Production
New Afton - Canada - Development
From their last quarterly report
Third Quarter Financials
VANCOUVER, Nov. 4 /CNW/ - New Gold Inc. ("New Gold") (TSX and NYSE AMEX:NGD) today announces financial and operational results for the third quarter of 2010. New Gold had an excellent third quarter with gold sales of 89,692 ounces at a total cash cost(1) of $435 per ounce, net of by-product sales, resulting in earnings from mine operations of $46.7 million and cash flow from operations of $35.5 million. New Gold is also pleased to reiterate its 2010 full year guidance of 330,000 to 360,000 ounces of expected gold production at a total cash cost(1) of $445 to $465 per ounce sold, net of by-product sales
12.3 million ounces M&I gold Resources
8.2 million ounces gold Reserves
(see page 9 of their corporation presentation)
Corporate Presentation
Growth and production are increasing, while cash costs per ounce are decreasng.
New Gold closed today at $8.01
With a current book value of $4.66, and revenue growth I feel this one is undervalued.
Industry price ratio of BV is 3.2 times. NGD is currently trading at 1.62 times BV
I come up with a value of $14.91 using 3.2, and $14 using 3 times. Either way, I think it's undervalued.
Of course, we need the price of gold to hold up at these levels in order for the stock to move back up to the high made in 2010. If there's weakness in gold, you may want to consider adding New Gold to your portfolio of precious metal stocks.
Please visit the company website for more information.
NEW GOLD WEBSITE
(Disclosure: I currently hold shares in NGD)
How about the warrants on this stock? The b warrants have had a steep correction and look like a buy right here. Extremely long term as warrants go. As soon as the correction became obvious, there was a lot of liquidation from buyers a .045 but this looks good for an entry. Correct me if I'm wrong.
ReplyDeleteCharles, I had to go and have a look at that, and not too familiar with warrants. However, the WT.A, closed at 1.90, the WT.B - .06, the WT.C - .31.
ReplyDeleteHere's the information on the warrants from NGD website.
http://www.newgold.com/Investors/TradingSymbolsWarrantInformation/default.aspx
The "B" warrants are good until April 3, 2012, but to exercise it you need 10 warrants =$15 = 1 NGD common share. So you're in actual fact paying $15.60 for 1 share.
This website gives a listing of warrants for all companies, and you can see that it says these warrants are OVERVALUED.
http://canadianwarrants.com/WarrantValues-Current.htm
You might be better off buying a call option on the stock. The July 2011 strike $10 calls are going for .43 cents. I think each contract = 100 shares, so at .43 cents 1 contract would cost $43.00 which gives you the right to buy NGD for $10.
April calls with a strike of $9 are going for .39
It's much easier to get out of a trade when you buy the actual stock, should the markets trend against you. But that's my opinion, and I'm no expert on calls, options or warrants.
Let me know what you end up doing.
sorry, just noticed a typo in my comment above. should read ...10 warrants + $15 = 1 NGD common share.
ReplyDelete