2009-09-23 19:44 ET - In the News
Brien Lundin, in the September, 2009, edition of the Gold Newsletter, says buy New Gold Inc., recently $3.36 (all figures U.S.). This is the first time Mr. Lundin has recommended the gold company. The newsletter editor says that 33 days after completing a $1.2-billion (Canadian) business combination with Western Goldfields Inc., New Gold had to eat a $190-million goodwill impairment charge on the deal in its second quarter financials.
Add to that foreign exchange losses of $31-million and the company ended up with a net loss of $203-million or 79 cents per share. Still, notes the goldbug, it was better than expected. The acquisition will add 140,000 to 150,000 ounces of gold production this year.
Mr. Lundin says the company expects operational improvements to continue for the rest of the year, forecasting a 2009 gold production of 330,000 to 360,000 ounces at a net cash cost of $490 to $510 per ounce.
New Gold is also developing its New Afton project which it hopes will be in production by the second half of 2012. It expects New Afton to produce 85,000 ounces of gold and 75 million pounds of copper over a 12-year mine life. The newsletter editor tells his readers to buy on weakness.
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