IKN

saucy doubts and fears

Even more New Gold (NGD): S&P downgrades its debt rating

My thanks to A. Reader for this one:

New
Gold Downgraded to B from B+ on Weaker Liquidity; Outlook Negative:
S&P Global Ratings lowered its long-term corporate credit and senior
unsecured debt ratings on New Gold to B from B+. The downgrade
primarily reflects the expected deterioration in New Gold’s liquidity
position related to delays at the company’s Rainy River development
project in Ontario. The company announced it has budgeted an additional
$195 million of capital expenditures to achieve commercial production by
Nov. 1, 2017–about three months behind schedule. S&P now expects
New Gold will face a liquidity shortfall in 2017 if it doesn’t raise new
funds required to complete the project. Although S&P’s ratings on
New Gold have incorporated the risks associated with the new mine
development, S&P now believes the company’s financial flexibility
has materially weakened. (S&P Global Ratings)

And even though this is cold sweat material for the company, I promise you, hand on heart, you’ll still get idiots in the market today who see “value in the equity at this price”. There are some people who need to learn the hard way what “equity” really means, y’see.

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