Sep 13, 2018
New Gold stock soars as mining company said to be exploring sale
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New Gold, which is working with investment bank BMO Capital Markets to help find a buyer and evaluate other options, has held talks with interested parties, the sources said this week. There were no assurances the talks would result in a deal, they added, declining to be identified as the discussions are private.
The company could divest specific mines if an outright sale does not materialize, one of the people said, noting its New Afton mine in British Columbia and Mesquite mine in California may be appealing on a standalone basis.
“New Gold’s corporate policy is not to comment on market rumors,” said spokeswoman Julie Taylor. BMO declined to comment. Toronto-based New Gold has struggled to hit production targets at its flagship Rainy River mine, its biggest, in Ontario and faces debt pressure. At the end of 2017, its debt-to-equity ratio was 47.1 per cent, higher than the industry average, according to Thomson Reuters data.
On Wednesday, the company named a new, permanent chief executive officer. The stock, already up, jumped 32 per cent after the Reuters report on Wednesday to touch a session high of $1.36. The shares closed at $1.26, up 22 per cent in the early afternoon, and the company’s shares were among the most heavily traded in Toronto.
For the rest of this article: https://www.theglobeandmail.com/business/article-canadian-mining-company-new-gold-exploring-sale-sources-say/