NGD - New Gold resumed at Outperform at BMO after increasing New Afton stake
2024-05-31 13:16:50 ET
- New Gold ( NYSE: NGD ) is reinstated Friday with an Outperform rating at BMO Capital, which also raised its stock price target to C$3.50 from C$3.00, citing upside potential from its increased New Afton ownership .
- New Gold's ( NGD ) agreement with Ontario Teacher's Pension Plan calls for a US$255M up-front cash payment to raise its free cash flow interest for New Afton from 54% to 80.1%, which BMO analyst Brain Quast says will boost attributable LOM cash flow for the mine from US$1.338B to US$1.865B and lift project net asset value from US$974M to US$1.357B.
- The company also announced positive results at New Afton's K-Zone, highlighting drill results of 2.01% Cu and 1.79 g/t Au over 217 meters and 1.21% Cu and 1.03 g/t Au over 214 meters, which indicates the potential for a new mining zone and pot, which could extend mine life.
- New Gold ( NGD ) is focused on optimizing operations at its Rainy River and New Afton mines in Canada, and is finishing a capex heavy period but should generate significant free cash flow in future years, Quast says in his investment thesis on the company.