Dallas, Texas 07/07/2015 (Financialstrend) – New Gold Inc. (USA) (NYSEMKT:NGD) remained one of the few gold mining stocks to post gains on Monday. The company has been in the news in the previous week for scheduling its second quarter earnings report on July 28, after market close. The company first quarter results reported on April 30 fell short of industry expectations.
The results remained below par because of the increase in the costs of production per ounce. At an earlier point in the precious metal mining history, New Gold Inc had one of the least-gold production costs in the world. However in the first quarter of 2015, the company reported an increase in production to the tune of 4% at the production cost of $1,014 per ounce. With gold prices at $1,200 per ounce, New Gold Inc. (USA)(NYSEMKT:NGD) production costs of $1,014 speak for themselves. The ensuing net loss (adjusted) was $5 million or $0.01 per share. Total net loss was $43.8 million or $0.9 per share.
There were other expenses too, which NGD had to incur. Capital expenditure increased from previous year by $10 million to $38 million this year. The expenditure was incurred due to Mesquite mine. Besides, nearly all of the company’s mines saw an increase in costs in the first quarter.
New Gold Inc. (USA)(NYSEMKT:NGD) is also troubled by the fall in copper prices. Therefore, in terms of balance, the company is top-heavy. It is just emerging from a very tough first quarter phase and needs to battle the pressure from copper prices, besides gold itself. Additionally it faces a challenge on the financial factors as well, such as the high debt loads. The down trend in its performance as well as its capital position has meant that the stock is not highly recommended as a stock for investments.
New Gold Inc. (USA) (NYSEMKT:NGD) is a key player within the precious mining sector and needs to strike the right balance to remain bullish for investors.