| Roth Capital: New Gold Still Worth $3.25 Following Financing Agreement With Royal Gold | |
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On Monday, July 20, New Gold Inc. (USA) (NYSE: NGD) announced it has entered a $175 million gold and silver stream agreement with Royal Gold, Inc (USA) (NASDAQ: RGLD). According to the contract, the latter will help the former fund the development of its Rainy River project. In return, Royal Gold will receive a percentage of all gold and silver production, while paying, upon delivery, 25 percent of the prevailing spot prices for gold and silver.
The Implications
In a report issued Monday, Roth Capital analyst Joe Reagor looks into the agreement and concludes that the announcement “demonstrates the strength of the project” (and confidence in its economic viability), even amidst a depressed gold price environment.
Furthermore, the gold stream demonstrates New Gold is “committed to moving forward with Rainy River despite a six month delay announced in early 2015,” the analyst adds.
Including the $175 million from the aforementioned agreement, New Gold now counts with $738 million for the development of Rainy River (the total estimated capital cost ascends to $760 million), in available cash and credit. Based on Roth Capital’s estimates, the analysts believe “the remaining capital will be funded by cash flow from existing operations.”
Consequently, Reagor reiterates a Buy rating and $3.25 12-month price target on shares of New Gold.
Latest Ratings for NGD
Date | Firm | Action | From | To |
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Jul 2015 | Roth Capital | Upgrades | Neutral | Buy | Jul 2015 | Morgan Stanley | Downgrades | Overweight | Equal-weight | May 2015 | Barclays | Maintains | | Equal-weight |
View More Analyst Ratings for NGD
View the Latest Analyst Ratings
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Royal Gold Inc.
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PRODUCER |
CODE : RGLD |
ISIN : US7802871084 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Royal Gold is based in United states of america. Royal Gold produces gold, copper, lead, silver and zinc in Argentina, in Bolivia, in Burkina Faso, in Canada, in Chile, in Guinea, in Mexico, in Nicaragua and in USA, develops copper, gold, lead, silver and zinc in Australia, in Burkina Faso, in Canada and in Chile, and holds various exploration projects in Argentina, in Bulgaria, in Canada and in Finland. Its main assets in production are BALD MOUNTAIN in USA, LIMON, LEEVILLE MINING COMPLEX and GOLDSTRIKE OPEN PIT in Nicaragua, DON MARIO (CERRO PELADO) and ROBINSON (NEVADA) in Bolivia, EL CHANATE, PEÑASQUITO, WHARF, MARIGOLD, DOLORES MINE, MULATOS MINE -ESTRELLA and GOLDSTRIKE UNDERGROUND in Mexico, SIGUIRI in Guinea, TAPARKO in Burkina Faso, MARTHA MINE in Argentina, ANDACOLLO HYPOGENE, TOQUI and ANDACOLLO in Chile and WILLIAMS, TWIN CREEKS, PIPELINE MINING COMPLEX and TROY in Canada, its main assets in development are GOLD HILL and PASCUA LAMA in Chile, HOLT MINE & MILL and PINE COVE (MINGS BIGHT) in Canada, BALCOOMA in Australia and BOUROUM in Burkina Faso and its main exploration properties are CANADIAN MALARTIC (QUEBEC), GOLDSTRIPE WILLA, MANHATTAN (WHITE CAPS) and CAMP BIRD MINE in Canada. Royal Gold is listed in Canada, in Germany and in United States of America. Its market capitalisation is US$ 9.1 billions as of today (€ 8.2 billions). Its stock quote reached its lowest recent point on February 28, 1992 at US$ 0.03, and its highest recent level on September 18, 2024 at US$ 139.14. Royal Gold has 65 455 293 shares outstanding. |