Sale to fortify New Gold

Article Excerpt

NEW GOLD $1.20 (Toronto symbol NGD; TSINetwork Rating: Speculative) (888-315-9715;; Shares outstanding: 575.5 million; Market cap: $694.5 million; No dividends paid) continues to explore the possible sale of the company along with other options. New Gold has struggled to hit production targets at its biggest mine, Rainy River. The shares are down along with most gold stocks, and that will make it more difficult to raise funds to fix operational problems at the mine. Meanwhile, to raise funds, the company will sell its Mesquite mine in California for $158 million. New Gold will use the proceeds for Rainy River. As well, it will use some of the money to pay down its long-term debt of $959.1 million U.S. That amount is a very high 1.8 times the company’s market cap. New Gold is still a buy, but only for aggressive investors. investors…

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