New Gold, which is working with investment bank BMO Capital Markets to help find a buyer and evaluate other options, has held talks with interested parties, the sources said this week. There were no assurances the talks would result in a deal, they added, declining to be identified as the discussions are private.

The company could divest specific mines if an outright sale does not materialize, one of the people said, noting its New Afton mine in British Columbia and Mesquite mine in California may be appealing on a standalone basis.

"New Gold's corporate policy is not to comment on market rumors," said spokeswoman Julie Taylor. BMO declined to comment.

Toronto-based New Gold has struggled to hit production targets at its flagship Rainy River mine, its biggest, in Ontario and faces debt pressure. At the end of 2017, its debt-to-equity ratio was 47.1 percent, higher than the industry average, according to Thomson Reuters data. On Wednesday, the company named a new, permanent chief executive officer.

The stock, already up, jumped 32 percent after the Reuters report on Wednesday to touch a session high of C$1.36. The shares traded at C$1.31 in the early afternoon, the fifth most heavily traded in Toronto. Rainy River makes it harder to pull off a sale, the people said, as any buyer must be comfortable with the mine's operational problems as well as company debt.

Acquired in a acquisition of Rainy River Resources in 2013 worth about $310 million, the project's construction costs have soared 80 percent since 2014 to $1.59 billion.

Over the past year, the company has sold assets, replaced senior executives and reshuffled its board as it tried to resolve problems at Rainy River.

Spot gold prices are skirting 19-month lows on a strengthening U.S. dollar as a trade war between Washington and Beijing drives investors to seek safety in the greenback, rather than gold. Year to date, New Gold shares have dropped about 68 percent, clipping the company's market valuation to C$758 million ($583 million). In that period, the S&P/TSX Global Gold Index declined 22 percent. Global mergers and acquisitions of gold miners has dropped so far in 2018 to 204 deals, valued at $4.6 billion, from 259 transactions, worth $5.06 billion, in the same period last year, according to Thomson Reuters data. In late July, New Gold reported a second-quarter net loss of $302 million, compared with a $23 million net profit in the same period last year. The company cut its forecast for annual output by more than 20 percent and increased production cost estimates by about 25 percent, largely due to ramp-up issues at Rainy River alongside lower-than-expected grades and recovery rates.

($1 = 1.2992 Canadian dollars)

(Reporting by John Tilak and Susan Taylor in Toronto; Editing by Denny Thomas and Jeffrey Benkoe)

By John Tilak and Susan Taylor