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by Stockwatch Business Reporter

New York spot gold rose $20.50 to $2,356.20 on Tuesday. The TSX Venture Exchange rose 3.03 points to 599.88 while the TSX gold index added 2.92 points to 326.32. Word that gold recoveries exceeded expectations led Hudbay Minerals Inc. (HBM) to a strong first quarter, sending its stock up $1.69 to $13.71 on 11.47 million shares.

Well, that did not play well with the market. Patrick Godin's New Gold Inc. (NGD), a $2.75 stock Friday, dropped to $2.55 Monday and dipped to an intraday low of $2.38 this morning. After yesterday's close, the company delivered news that might suggest why. New Gold is increasing its interest in the New Afton gold and copper mine in British Columbia to 80.1 per cent by paying the Ontario Teachers' Pension Plan $255-million (U.S.) for a portion of its interest in the mine. (The pension plan currently holds 46 per cent of the mine, but that will drop to 19.9 per cent.)

New Gold ended today down four cents to $2.51 on three million shares, but the grumpiness is not because of the purchase -- it is because of how the cost will be covered. Yes, New Gold will cover some of the payment from cash on hand and its revolving credit facility, but it is also selling new shares -- a lot of them and at a fire sale price. The company is offering 87.3 million shares at $1.72 (U.S.) per share -- $2.34 in Canadian dollars -- for $150-million (U.S.).

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