NEW GOLD $5.48

NEW GOLD $5.48 (Toronto symbol NGD; TSINetwork Rating: Speculative) (888-315-9715; www.newgold.com; Shares outstanding: 509.9 million; Market cap: $3.1 billion; No dividends paid) has four mines: the Mesquite project in the U.S.; Cerro San Pedro in Mexico; the Peak mine in Australia; and the New Afton operation in B.C.

In the three months ended March 31, 2016, New Gold’s cash flow fell 7.9%, to $62.1 million, or $0.12 a share, from $67.4 million, or $0.13 a share. (All figures except share price and market cap in U.S. dollars.) Gold production fell 4.4% in the latest quarter, to 90,800 ounces from 95,000. Copper production rose 10.0%, to 25.4 million pounds from 23.0 million.

The company’s long-term debt is $788.0 million U.S. That’s a manageable 33% of its market cap. It also holds cash of $298.3 million, or $0.59 a share.

New Gold is now building a mine in Rainy River, Ontario; it aims to produce an average of 325,000 ounces of gold annually. The facility is now 35% complete, and production should start in 2017.

Like Hecla, the miner has strong speculative appeal because of its positive cash flow and rising production in the near term.

New Gold is a buy for aggressive investors.

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