Take physic, pomp

There are two problems with this Blackwater Feas Study pitch that New Gold (NGD) is giving us

Here’s the NR, it has a lot of numbers and Mr Oliphant saying, “Yeah, but Rainy River is gonna be way cool! Don’t worry dudes!” But like I say, clear the spin away and there are still two obvious problems:
1) Blackwater doesn’t work at current gold prices, period. At $1.3k Au and $22 Ag we have a 11.3% IRR, all after a capex bill of $1.87Bn? Next, please!
2) Rainy River might well turn out to be a better and economically more robust project (a nice way of saying that it has a chance of becoming a mine, unlike Blackwater). Thing is, NGD runs a book value of approx $3Bn as at 3q13, of which $832m is Blackwater and $362m is Rainy River. Write downs, anyone?
So pump up the other project if you want, Randall, we’re looking at the hole in your balance sheet at this end.

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