New Gold shares plunge on forecast that is smaller, costlier than expectations
TORONTO – Shares of New Gold Inc. were down more than 20 per cent in mid-day trading after the company released weaker than expected guidance for the year.
The company, which keeps its books in U.S. dollars, says it expects to produce between 300,000 and 335,000 ounces of gold this year at an all-in sustaining cash cost of between US$1,370 to $1,470 per ounce for its two mines.
The forecast is smaller and costlier than the 336,000 ounces at $1,022 per ounce expected by GMP Securities.
New Gold has struggled with production issues at its Rainy River mine in Ontario. The company estimated at the start of last year that it would produce about 431,000 ounces in 2018, before slashing its forecast for Rainy River by about 100,000 ounces midway through the year as it encountered grade and recovery issues.
The company says it lost $727.7 million or 1.26 per share in the fourth quarter, which included a $671-million impairment loss on its Rainy River mine.
Adjusted net income from continuing operations for the quarter was $22.7 million or four cents per share, compared with a loss of four cents per share a year earlier.
Shares in the company were down 37 cents at $1.26 in trading on the Toronto Stock Exchange.