CA - New Gold: Margins Bounce Back In Q1

2023-05-14 02:34:01 ET

Summary

• New Gold released its Q1 results last month, reporting quarterly production of ~104,900 gold-equivalent ounces, a significant improvement from the year-ago period.
• Given the higher sales volumes and much lower sustaining capital in the period, margins improved materially despite a lower gold price, with AISC margins more than tripling to $404/oz.
• While this has still translated to industry-lagging costs and cash outflows as the company works to develop the C-Zone, 2024 should be a much better year.
• That said, I see some of the positive developments priced into the stock here with NGD up over 130% from its lows, so I would view any rallies above US$1.57 before July as an opportunity to book some profits.

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