New Gold (NGD) Granted Injunction, Cerro San Pedro Continues Operations
New Gold’s Cerro San Pedro mine will continue operations as the court grants an injunction. This will allow New Gold to continue mining operations during the trial and remedy any problematic disagreements on the environmental impact. The court granted this injunction as a prolonged suspension could have affected over 2000 jobs.
As I stated in a previous note that I believed New Gold would get Cerro San Pedro straightened out as they have an incredible management team that has the experience and financial resources to promote environmentally friendly mining.
At the time of my previous note I believed this to be an incredible opportunity to continue to add to the position and to be careful of selling from a news related item. This hiccup will be short-lived as New Gold has some of the best gold copper combination assets in friendly mining jurisdictions. I like finding projects with both gold and copper as this provides an opportunity in growing economies coupled with fear of devaluation of currencies. Buying New Gold under $4 is a great buy.
Even though the trend line was broken NGD found support at the horizontal support line. This often shakes out weak hands and the absence of sellers usually leads to explosive rallies especially when Gold finds support and reverses higher.
Disclaimer: My family and I own shares of NGD.