What happened
Shares of New Gold (NGD 4.36%) slumped more than 10% by 3:30 p.m. EST on Wednesday. Weighing on the gold mining stock was its third-quarter report.
So what
For the third quarter New Gold reported an adjusted loss of $10 million, or $0.02 per share, which missed analysts' expectations that it would break even. While it sold its gold for 15% more than it did in the prior-year period, a 20% surge in its all-in sustaining costs ate up most of that benefit. That's due in large part to lower ore grades and an increase in waste tons mined at its Rainy River mine.
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The company's gold equivalent production also slipped about 0.1% year over year. While output at Rainy River rose 35%, a 25% decline in production at New Afton offset much of that gain. However, the company is still on track to achieve its full-year production guidance to deliver between 465,000 and 520,000 gold equivalent ounces.
Now what
New Gold is working on several projects at Rainy River to reposition it for "efficient and sustainable mining," according to comments by CEO Renaud Adams. That's part of its efforts to "provide a path forward that is premised on maximizing profitability and shareholder value creation." Investors, however, want results, which the company has struggled to deliver over the years. Until it does, shares will likely remain under pressure.
