What happened
Shares of New Gold (NGD -1.19%) had jumped roughly 10% by 2:30 p.m. EST on Friday. Driving the gold mining stock's rally was its third-quarter results.
So what
New Gold produced 105,628 gold equivalent ounces during the third quarter. While that was down year over year due to some challenges in the quarter, the company remained on track to achieve its updated full-year guidance range of 405,000 to 450,000 gold equivalent ounces.
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A more impressive metric was the company's all-in sustaining costs (AISC), which declined 9% in the quarter compared to the first half of the year, to $1,408 per gold equivalent ounce. The driving factor was a 16% decline in AISC at its Rainy River mine in Ontario. With the price of gold averaging $1,788 an ounce in the quarter, New Gold made money. Overall, it generated $54 million in cash from operations during the quarter. It also ended the period with a solid financial position, including $151 million in cash and $477 million in total liquidity.
New Gold also had positive things to say about what lies ahead. The gold miner noted that it expects production at Rainy River to improve in the fourth quarter. It also anticipates achieving its cost guidance for the full year. Meanwhile, the company also said that it's advancing the ramp-up of projects at its New Afton mine in British Columbia and continues working toward an optimized underground-mine plan study at Rainy River.
Now what
New Gold navigated some production challenges in the third quarter. It was able to drive down costs, improving the profitability of its Rainy River mine. Reducing costs remains an important focus because it still has higher costs than most other gold producers.
