RBC Capital upgraded New Gold Inc. (NYSE:NGD) to outperform from sector perform and raised its price target to $1.25 from $1 following a site visit to the Rainy River mine.

The analysts have higher confidence in a production rebound from the open pit following rainfall-impacted Q2/22 results, as well as better visibility into the transition to underground mining.

By 2024 the analysts expect over 40% higher GEO production at approximately 30% lower AISC. According to the analysts, risks remain including permitting at New Afton and ramp-up execution at both operations, however, they are increasingly confident in production growth over the next 12-18 months.