CIBC has increased its price target for New Gold (NGD, Financial) from $3.40 to $4.75, while maintaining an Outperformer rating on the stock. This adjustment is attributed to New Gold's consolidation of its New Afton mine and a robust performance in the first quarter of 2025. On May 1, New Gold finalized an agreement to purchase the remaining 19.9% free cash flow interest in the New Afton mine from the Ontario Teachers’ Pension Plan for $300 million. This transaction results in New Gold fully consolidating its interests in the New Afton mine.
The company also terminated all existing agreements related to the Ontario Teachers’ free cash flow interest. Furthermore, New Gold's production for the first quarter exceeded expectations, as reported on April 29. This strong financial performance has positively influenced CIBC's revised price target and ongoing confidence in the company's future prospects.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 7 analysts, the average target price for New Gold Inc (NGD, Financial) is $4.37 with a high estimate of $5.63 and a low estimate of $3.25. The average target implies an upside of 6.67% from the current price of $4.10. More detailed estimate data can be found on the New Gold Inc (NGD) Forecast page.
Based on the consensus recommendation from 7 brokerage firms, New Gold Inc's (NGD, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for New Gold Inc (NGD, Financial) in one year is $2.36, suggesting a downside of 42.37% from the current price of $4.095. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the New Gold Inc (NGD) Summary page.
NGD Key Business Developments
Release Date: April 30, 2025
- Gold Production: 52,200 ounces.
- Copper Production: 13.6 million pounds.
- All-in Sustaining Cost (AISC): $1,727 per ounce of gold.
- Cash Flow from Operations: Over $107 million.
- Free Cash Flow: $25 million, with New Afton contributing $52 million.
- Revenue: $209 million, higher than the prior year due to higher metal prices and copper sales.
- Net Loss: Approximately $170 million or $0.02 per share.
- Adjusted Net Earnings: $12 million or $0.02 per share.
- Capital Expenditures: $75 million total, with $42 million on sustaining capital and $33 million on growth capital.
- Cash on Hand: $213 million.
- Liquidity Position: $590 million.
- Senior Notes Offering: $400 million at 6.875% interest rate, due in 2032.
- Revolving Credit Facility: Extended to 2029 with an accordion feature for up to $100 million increase.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- New Gold Inc (NGD, Financial) achieved a 40% improvement in safety with a low total recordable injury frequency rate of 0.55%.
- The company produced over 52,000 ounces of gold and 13.6 million pounds of copper, slightly ahead of planned guidance.
- New Gold Inc (NGD) generated over $107 million in cash flow from operations and $25 million in free cash flow.
- The company successfully refinanced and extended its senior notes to 2032 and revolving credit facility to 2029 at lower rates, enhancing financial flexibility.
- New Gold Inc (NGD) consolidated its interest in New Afton to 100%, providing full exposure to exploration upside and mine life extension possibilities.
Negative Points
- Gold production decreased compared to Q1 2024 due to planned lower feed grades at both sites.
- Consolidated all-in sustaining costs were high at $1,727 per ounce due to lower production in Q1.
- Rainy River's all-in sustaining costs were $2,758 in the quarter, expected to trend lower but currently high.
- The company recorded a net loss of approximately $170 million or $0.02 per share during Q1.
- The transition from B3 cave to C-Zone at New Afton may result in lower grades and production in the short term.
