To quit this horrid act

A final note on New Gold (NGD) (from IKN489)

The New Gold (NGD) trials and tribulations were interesting for a while, but there is a limit one’s attention once it becomes clear there’s no decent trade available. This short piece is from IKN489, out last Sunday for subscribers.

A final
note on New Gold (NGD)

For the time being, at least.  In the short-ish piece on NGD in IKN487 last
week (18) in which we noted its continued mediocre price performance on the
back of the Mesquite
sales and rejected it as a trade candidate, one of the lines used was, “If and when NGD can do a deal to sell
Blackwater, it may be worth revisiting this stock.
” Among the feedback
mails from IKN487, one from somebody I consider to be very well placed to
comment on the current NGD situation (and who must remain anonymous, but I
vouch 100% for the source) wrote in and said that he didn’t think NGD would get
“North of U$50m for Blackwater”.

That, if true or even half true,
would be another massive hole blown in the balance sheet of NGD, as currently
Blackwater is carried at over U$500m by the company (!!). Perhaps this is why
NGD did what it did the day after IKN487, the next 15% dive in the stock price.
More perspective on the mess that Renaud Adams has inherited and how badly run
NGD was in the years before his arrival. We’ve already seen Mesquite sell for
$228m less than its carried position, and now the potential arises for at least
an internal impairment to Blackwater, if not a firesale. Year-end impairments
testing at the company in the years before was a joke that falls little short
of criminal. I would like to know how Randy Oliphant still has director’s
positions in other companies. That’s enough NGD for the time being, if anything
substantive changes at the company we may revisit, but only if a trade is in
the offing. Rubbernecking car crashes gets tiresome after a while.

I expect NGD to flatline. No need to run away any longer, just walk.

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