NEW GOLD $10.16 - Toronto symbol NGD

NEW GOLD $10.16 (Toronto symbol NGD; TSINetwork Rating: Speculative) (888-315-9715; www.newgold.com; Shares outstanding: 461.7 million; Market cap: $4.7 billion; No dividends paid) has three operating mines: the Mesquite mine in the U.S., the Cerro San Pedro mine in Mexico and the Peak mine in Australia. It also owns 30% of the El Morro copper/gold project in Chile (Goldcorp owns the other 70%) and 100% of the New Afton gold/copper/silver project in B.C.

El Morro contains an estimated 4.7 million ounces of gold and 3.7 billion pounds of copper. New Afton holds 2.7 million ounces of gold, 2.5 billion pounds of copper and 8.3 million ounces of silver.

New Gold also owns the Blackwater property in central B.C., which could hold as much as 7.8 million ounces of gold.

The company earned $0.07 a share in the three months ended March 31, 2012, up 16.7% from $0.06 a share a year earlier

New Gold’s $262.3 million of long-term debt is just 5.6% of its market cap. It holds cash of $235.7 million, or $0.51 a share. That gives it lots of funds to further develop its mines and make acquisitions.

The company produced 387,155 ounces of gold in 2011. This year, it expects to produce between 405,000 to 445,000 ounces. That includes as much as 45,000 ounces from the New Afton mine, which is scheduled to start up in August.

New Gold is a buy.

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