New Gold Inc. (NGD): A Bull Case Theory 

We came across a bullish thesis on New Gold Inc. on Valueinvestorsclub.com by rookie964. In this article, we will summarize the bulls’ thesis on NGD. New Gold Inc.’s share was trading at $6.82 as of October 9th. NGD’s trailing and forward P/E were 36.75 and 7.84 respectively according to Yahoo Finance.

New Gold Inc. (NGD) represents a compelling opportunity in the materials sector, which is often overlooked and comprises only 1.9% of the S&P 500. NGD operates two major Canadian gold mines, Rainy River in Ontario and New Afton in British Columbia, producing roughly 300,000 ounces of gold annually alongside copper as a byproduct. The company is highly profitable today, but growth is set to accelerate meaningfully from 2024–2027 as recent capital investments bear fruit.

NGD expects 38% growth in gold and 94% growth in copper production over this period, driving lower costs and generating approximately $2.5 billion in free cash flow—equivalent to 65% of its market capitalization. Today, NGD trades at a 25% FCF yield, far above the ~8% average for peers, and benefits from operating entirely in low-risk Canadian jurisdictions.

The New Afton mine is central to NGD’s thesis. It is a rare block-caving mine in Canada, with production costs declining as its C-Zone ramps up, expected to cut all-in sustaining costs from $1,239/oz to $400–$500/oz by 2027. Capex will drop materially from $120 million to $10 million, enhancing cash generation. NGD recently acquired the remaining minority interest in New Afton from Ontario Teachers’ Pension Plan for $300 million, effectively an accelerated buyback that increases exposure to its own assets and signals management confidence. Rainy River continues as a cash-generating mine with stable production but without the same expansion upside as New Afton.

NGD’s low-risk Canadian operations, exceptional growth potential, and high free cash flow yield create a uniquely attractive investment in gold equities. With limited uses for excess cash beyond capital returns, shareholders stand to benefit from both operational expansion and potential buybacks. Assuming a 10x P/FCF multiple, NGD shares could reach approximately $12, offering a significant upside relative to current valuations.

Previously we covered a bullish thesis on Harmony Gold Mining Company Limited (HMY) by Intelligent_Okra5374 in April 2025, which highlighted the company’s strong operations, pivot to high-grade, low-cost assets, copper diversification, and robust free cash flow. The stock has appreciated approximately 39.73% since our coverage. The thesis still stands, while rookie964 emphasizes New Gold Inc.’s growth, low-cost ramp at New Afton, and high free cash flow yield.

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Disclosure: None.