NGD - New Gold: Share Price Underperformance Continues Following Guidance Cut

• New Gold had a rough Q2 performance and cut its FY2021 consolidated guidance, with lower grades than expected from East Lobe at the Rainy River Mine in Ontario.
• While the preliminary Q3 results were a little better on a sequential basis as grades improved, grades were well below initial plans, and production was down more than 5% year-over-year.
• Given the continued inflationary pressures we're seeing combined with lower FY2022 earnings estimates, I have revised my fair value for New Gold from US$2.75 to US$1.90.
• At a current share price of US$1.47, New Gold is reasonably valued, but I see much better ways to play the sector given that it's in the upper end of its trading range currently.

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