IKN

idle and fond bondage

New Gold ( $NGD ) and an excerpt from IKN486, out last Sunday

In the IKN Weekly issue 486, out Sunday September 16th, one of the semi-long notes went under the title “New Gold (NGD) will sell Mesquite”. Here’s an except from those three and a half pages that talked NGD, Blackwater, Mesquite and ran some basic numbers to boot:

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Therefore to sum up Mesquite, what we have is
this:

  • An asset worth $386m according to NGD
  • Production of perhaps 150,000 ounces
    of gold a year and 15 years of resources. Nice.
  • High cash cost that is even higher when you consider
    its true revenue and sustaining capex that doesn’t advance the asset, it’s
    running to stand still.
  • Effectively unprofitable at today’s gold price.

And it’s those last two that made
me go “no way” when first thinking about what NGD would hammer under a
semi-obligatory asset disposal situation, the one we have today. However, it’s
that reaction of mine that was wrong because…

Equinox Gold (EQX.v), Leagold
Mining (LMC.to), Fiore Gold (F.v)

There are the names of not one but three
companies that wouldn’t just consider Mesquite,
they’d actively desire the thing.

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And this evening, this from NGD:

TORONTO, Sept. 19, 2018
/CNW/ – New Gold Inc. (“New Gold” or the “Company”) (TSX:NGD) (NYSE
American:NGD) today announces that it has entered into a definitive
share purchase agreement (the “Agreement”) with Equinox Gold Corp.
(“Equinox”) to sell its Mesquite Mine located in California.

The price being paid by EQX is most interesting, by the way.

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