Take physic, pomp

New Gold (NGD) 2q18 financials

In this post just three weeks ago, your humble scribe wrote the following:

Here’s the carrying value of NGD properties per quarter split into two piles: Rainy River and Everything Else:
amazes me isn’t that Rainy River is now over 50% of the total of
everything at NGD, what amazes me is that NGD still thinks this thing is
worth U$1.6294Bn. 

Consider that back in January 2014, when NGD had recently bought Rainy River and carried it on its books at U$394.6m, it told us that the development
capital costs of the project would be, “$885 million inclusive of a $70
contingency.” Does this mean that an over-cost, overdue mine that is
under-performing, producing far less gold than planned and making an
operating loss has goodwill of U$349.8m?

Hey…let’s call it $350m, just for fun.

Seriously, how stupid do these people think we are?

Do these C-suiters read this pissant blog, perhaps? This evening New Gold (NGD) reported its 2q18 financials and holy wow, they’ve bitten the bullet and taken a net-tax $282m impairment on the thing. That means a net loss of $302m (ouch) and an adjusted net loss of $2m on the quarter. In other words, they have begun the process of reducing RR to its true value (and don’t be fooled by today’s slice, there’s more to come). 
What we’ll now get to enjoy is a bunch of dumbass anal ysts who will tell you, “Yeah, but don’t look at that $302m number because it’s just an impairment, it doesn’t affect anything.” The same numbskulls that have had the stock on auto-buy reco for years and ignored the fact RR was a FUBAR of biblical proportions will applaud the company for coming clean. As day follows night, IKN can guarantee they’ll consider the fact that $300m of shareholder money has been flushed down the toilet as a minor technical detail.

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