New Gold Inc. (USA) (NYSEMKT:NGD) was a relative outperformer during Wednesday’s trading session rallying by 0.42 percent on high volumes. The stock continued its uptrend from Tuesday’s trading session, which is indicative of the continued buying interest and is considered to be a reversal sign. New Gold currently trades below all daily moving averages.The indexes, which measures relative strength has formed a higher high, indicative of the strong bullish momentum at current levels. The MACD oscillator has given a fresh buy signal, which is considered bullish. Traders see the stock heading to levels of $2.49 in the near term.
New Gold Inc. (NYSE:NGD) has sold 30 per cent interest in the El Morro development to Goldcorp Inc. A net cash of $60 million has been achieved by the company and a $94 million loan payable funding has been cancelled. A gold stream of 4 per cent would be received by the company in the gold production at the facility. After this financial transaction, New Gold has gained a better financial standing in the market and the company would continue on its gold reserves and exploration projects in other regions.
Goldcorp and Teck Resources Limited have formed a joint venture as Project Corridor for the El Morro and Relincho development. With the ore being sourced from El Morro, the gold production could reach 400,000 ounces annually as per the preliminary financial assessment of the new venture. This will allow New Gold to purchase 16,000 ounces of gold annually at a rate of $400 an ounce.
The joint venture companies are mulling a Pre-Feasibility Study at the development in 3Q16 and the same was expected to be done by 2017 end.
The production of New Gold is currently owed to the company’s New Afton Mine in Canada, Mesquite Mine in United States, Peak Mines in Australia and Cerro San Pedro Mine in Mexico. The company also owned the Rainy River and Blackwater developments in Canada and will now get an additional 4 % from the El Morro project too.
Peak Mines Exploration Update
Meanwhile New Gold Inc. (NYSE:NGD) announced an update on its Peak Mines exploration project earlier this month. As part of the exploratory work on the company in 2015, two new zones have been discovered for polymetallic mineralization. Both Chronos and Anjea are situated just adjacent to the ore deposits in the nine-kilometer corridor of the Peak Mine’s facility.
While the former is a gold, silver, copper, zinc and lead mineralization zone near the perseverance ore location of the Peak mill while the other is a copper, gold, silver, lead, zinc mineralization zone just near the Great Cobar mine of the company.
The full update on the new explorations at the location would be provided by the company in the February 2016 annual Investor Day.