Delivers Record First Half Cash Flow
(All figures are in US dollars unless otherwise indicated)
VANCOUVER, July 31, 2014 /PRNewswire/ - New Gold Inc. ("New
Gold") (TSX:NGD) and (NYSE MKT:NGD) today announces its second
quarter 2014 operational and financial results. The company
produced 89,460 ounces of gold at all-in sustaining
costs(1) of $745 per ounce, which led to $59 million, or $0.12 per share, in net cash generated from
operations.
Second Quarter 2014
Highlights
- All-in sustaining costs(1) of
$745 per ounce decreased by
$186 per ounce compared to the second
quarter of 2013 driven by lower total cash
costs(2)
- Record-low total cash costs(2) of
$251 per ounce were down $179 per ounce from $430 per ounce in the prior-year quarter
- All-in sustaining cost margin of $559 per ounce and total cash cost margin of
$1,053 per ounce
- Gold production of 89,460 ounces coupled with copper production
of 25.5 million pounds
- Adjusted net earnings(3) of
$8 million, or $0.02 per share, compared to $4 million, or $0.01 per share, in the prior-year quarter
- Net cash generated from operations per share increased by 33%
to $0.12 per share, or $59 million, from $0.09 per share, or $43
million, in the second quarter of 2013
- $414 million in cash and cash
equivalents at June 30, 2014
- The company reiterates its 2014 guidance of 380,000 to 420,000
ounces of gold production at all-in sustaining
costs(1) of $815 to
$835 per ounce, including total cash
costs(2) of $320 to
$340 per ounce
- Rainy River - all key long lead time items have been
ordered and detailed engineering is progressing; project continues
on schedule with targeted first production in late 2016
"We are proud that our second quarter results further establish
our low-cost position which, together with our steady production,
once again resulted in strong cash flow generation," stated
Randall Oliphant, Executive
Chairman. "We are particularly excited that after achieving such
solid performance in the first half of 2014, the second half of the
year, and particularly the fourth quarter, should deliver marked
increases in gold production and cash flow."
"Beyond the performance of our producing mines, we also made
important progress at both our Rainy
River and Blackwater
projects. At Rainy River, we
continued to successfully lock in long lead time equipment on
favourable terms while we also steadily advanced the detailed
engineering. At the same time, at Blackwater we have now submitted the final
environmental assessment report to advance the permitting process,"
added Mr. Oliphant.
Operations Overview
|
New Gold 2014 Second Quarter Summary Operational
Results
|
|
Three months ended
|
Six months ended
|
|
June 30,
|
June 30,
|
|
2014
|
2013
|
2014
|
2013
|
Gold Production (thousand
ounces)
|
|
|
|
|
New Afton
|
26.3
|
21.8
|
53.7
|
36.7
|
Mesquite
|
18.4
|
25.8
|
44.2
|
51.3
|
Peak Mines
|
27.9
|
24.7
|
48.8
|
52.5
|
Cerro San Pedro
|
16.8
|
30.2
|
34.1
|
56.6
|
Total Gold Production
|
89.5
|
102.5
|
180.8
|
197.1
|
|
|
|
|
|
Total Gold Sales
|
84.7
|
98.0
|
178.8
|
193.2
|
Average Realized Gold Price ($ per
ounce)
|
$1,304
|
$1,276
|
$1,306
|
$1,383
|
|
|
|
|
|
Silver Production (thousand
ounces)
|
|
|
|
|
New Afton
|
59.7
|
49.1
|
123.4
|
83.9
|
Peak Mines
|
34.5
|
27.0
|
66.8
|
58.1
|
Cerro San Pedro
|
326.0
|
424.7
|
644.7
|
783.6
|
Total Silver Production
|
420.2
|
500.8
|
834.9
|
925.6
|
|
|
|
|
|
Total Silver Sales
|
414.2
|
472.3
|
830.8
|
895.7
|
Average Realized Silver Price ($ per
ounce)
|
$19.53
|
$21.41
|
$19.97
|
$25.12
|
|
|
|
|
|
Copper Production (million
pounds)
|
|
|
|
|
New Afton
|
21.0
|
18.7
|
43.0
|
30.5
|
Peak Mines
|
4.5
|
3.0
|
8.4
|
7.1
|
Total Copper Production
|
25.5
|
21.7
|
51.4
|
37.6
|
|
|
|
|
|
Total Copper Sales
|
24.3
|
19.5
|
49.4
|
35.4
|
Average Realized Copper Price ($ per
pound)
|
$3.09
|
$3.06
|
$3.03
|
$3.23
|
|
|
|
|
|
Total Cash Costs(2)($ per
ounce)
|
|
|
|
|
New Afton
|
($1,262)
|
($1,104)
|
($1,273)
|
($958)
|
Mesquite
|
993
|
925
|
928
|
902
|
Peak Mines
|
627
|
948
|
681
|
882
|
Cerro San Pedro
|
1,169
|
610
|
1,051
|
553
|
Total Cash
Costs(2)
|
$251
|
$430
|
$253
|
$457
|
|
|
|
|
|
All-in Sustaining Costs(1)($ per
ounce)
|
|
|
|
|
New Afton
|
($678)
|
($450)
|
($671)
|
$168
|
Mesquite
|
1,413
|
1,370
|
1,191
|
1,189
|
Peak Mines
|
928
|
1,502
|
1,000
|
1,438
|
Cerro San Pedro
|
1,322
|
663
|
1,193
|
631
|
All-in Sustaining
Costs(1)
|
$745
|
$931
|
$707
|
$1,010
|
Gold Production
Consolidated gold production during the quarter was similar to
the first quarter of 2014 and in line with New Gold's quarterly
production targets for 2014. Consistent with expectations,
production was below that of the prior-year quarter due to mine
sequencing. As outlined in the company's February 6, 2014 guidance, New Gold's
consolidated gold production is scheduled to increase significantly
in the second half of 2014 and particularly in the fourth quarter,
benefitting from the expected combination of continued strong
performances at New Afton and the Peak Mines and increased ore
tonnes being placed on the heap leach pads at both Mesquite and
Cerro San Pedro.
New Afton - Gold production increased
by 21% when compared to the second quarter of 2013 and remained
consistent with the record-setting first quarter of 2014. During
the quarter, average daily throughput was approximately 12,750
tonnes, the gold grade processed was 0.83 grams per tonne and gold
recovery was 85%. All of these key production variables increased
when compared to the prior-year quarter. For the six-month period
ended June 30, 2014, gold production
increased by 46% compared to the prior-year period as the mine
continued its strong performance with increased throughput, higher
grade and consistent recovery.
Mesquite - Consistent with Mesquite's
mine plan, which was scheduled to include increased waste stripping
in the first half of the year, second quarter production was below
that of the prior-year quarter. Mesquite's quarterly production was
impacted by a combination of the lag effect of less tonnes of ore
being placed on the leach pad in the first quarter of 2014 relative
to the first quarter of 2013 and over 40% of the second quarter ore
tonnes being placed in June, which, due to the timing of
recoveries, primarily benefits production in future periods. The
combination of a 61% increase in ore tonnes placed on the leach pad
in the second quarter over the first quarter of 2014 and further
increases in ore tonnes placed coupled with higher grades in July
should result in increased production at Mesquite in the coming
quarters. For the six-month period ended June 30, 2014, gold production was below that of
the prior year due to a planned 30% decrease in ore tonnes placed
which was partially offset by an 18% increase in gold grade.
Peak Mines - Gold production increased
by 13% when compared to the prior-year quarter due to an increase
in gold grade. As stated in the company's 2014 first quarter
results announcement, average gold grades are expected to be higher
through the balance of the year, and accordingly the average gold
grade in the second quarter was 4.7 grams per tonne, up from 3.5
grams per tonne in the first quarter and 4.0 grams per tonne in the
second quarter of 2013. For the six-month period ended June 30, 2014, gold production was consistent
with the prior year as throughput, grade and recovery all remained
comparable.
Cerro San Pedro - Quarterly production
at Cerro San Pedro remained consistent with the first quarter,
however, was below that of the prior-year quarter as Cerro San
Pedro's mining activity in the first half of 2014 was primarily
focused on waste stripping. Cerro San Pedro's second quarter
production was in line with the company's plans and when compared
to the same period of the prior year, fewer ore tonnes were placed
on the leach pad resulting in lower production. During the
six-month period ended June 30, 2014,
due to the focus on waste stripping, 3.0 million tonnes of ore were
placed on the pad compared to 7.9 million tonnes in the same period
of the prior year. The impact to production of the lower ore tonnes
was partially offset by higher recoveries stemming from increased
process solution flow and the implementation of side-slope
leaching.
Copper Production
Copper production was 18% higher than the second quarter of 2013
as a result of increased production at both New Afton and the Peak
Mines. New Afton's copper production during the quarter increased
by 12% through a combination of higher throughput and grade, which
was partially offset by a slight reduction in recovery stemming
from the higher throughput. Production at the Peak Mines increased
by over 50%, benefitting from higher copper grade and increased
recovery. For the six-month period ended June 30, 2014, consolidated copper production
increased by 36% to 51.4 million pounds when compared to the same
period of 2013 for reasons consistent with those noted above
regarding the second quarter.
Silver Production
Silver production in both the second quarter and first six
months of 2014 was below that of the same periods of the prior year
with lower production at Cerro San Pedro being partially offset by
increases in silver production at New Afton and the Peak Mines.
All-in Sustaining Costs(1) and Total Cash
Costs(2)
On a consolidated basis, New Gold's all-in sustaining
costs(1) and total cash
costs(2) continue to position the company
as one of the lowest cost producers in the industry. All-in
sustaining costs(1) of $745 per ounce were $186 per ounce lower than the same quarter of the
prior year. The primary driver of this was New Gold's total cash
costs(2), which form a component of all-in
sustaining costs(1), being a record-low of
$251 per ounce, representing a
$179 per ounce decrease from the
prior-year quarter. For the six-month period ended June 30, 2014, New Gold's all-in sustaining
costs(1) of $707 per ounce and total cash
costs(2) of $253 per ounce were both significantly below the
equivalent costs in the same period of the prior year.
New Afton - All-in sustaining
costs(1) and total cash
costs(2) were well below the second quarter
of 2013 as a result of the mine's strong operating performance,
which led to increased gold and copper production, as well as the
7% depreciation of the Canadian dollar relative to the U.S. dollar.
Consistent with the first quarter of 2014, the mine's Canadian
dollar operating costs, including mining, processing and general
and administrative costs, were below C$20 per tonne.
Sustaining capital expenditures at New Afton of $14 million during the second quarter were
consistent with those of the prior-year quarter, however, the
increase in gold sales volumes resulted in lower sustaining capital
per ounce which also contributed to the decrease in all-in
sustaining costs(1).
New Afton's quarterly co-product cash
costs(2) decreased to $442 per ounce of gold and $1.02 per pound of copper from $468 per ounce of gold and $1.23 per pound of copper in the same period of
the prior year. The mine's co-product all-in sustaining
costs(1) also decreased to $643 per ounce of gold and $1.48 per pound of copper from $669 per ounce of gold and $1.76 per pound of copper in the second quarter
of 2013.
The combination of the mine's continued strong performance and
lower sustaining capital expenditures also resulted in lower all-in
sustaining costs(1) and total cash
costs(2), on both a by-product and
co-product basis, during the six- month period ended June 30, 2014 relative to the same period of the
prior year.
Mesquite - Total cash
costs(2) at Mesquite were slightly above
the prior-year quarter due to lower gold sales volumes. Mesquite
had $4 million of sustaining capital
expenditures and $2 million of
expensed exploration during the quarter compared to $10 million and $1
million in the second quarter of 2013. However, as a result
of the lower gold sales volumes, sustaining capital per ounce
remained similar to the prior-year quarter which led to consistent
all-in sustaining costs(1). For the
six-month period ended June 30, 2014,
Mesquite's all-in sustaining costs(1) and
total cash costs(2) also remained similar
to the prior-year period.
Peak Mines - All-in sustaining
costs(1) and total cash
costs(2) at the Peak Mines both decreased
significantly when compared to the prior-year quarter. Total cash
costs(2) in the second quarter were
$321 per ounce lower than the prior
year having benefitted from a combination of $6 million, or $210
per ounce, of additional copper by-product revenue, the 7%
depreciation of the Australian dollar relative to the U.S. dollar
and continued productivity improvements. Sustaining capital
expenditures at the Peak Mines during the quarter were also lower
than the prior-year quarter resulting in an even more significant
decrease in all-in sustaining costs(1). For
the six-month period ended June 30,
2014, costs were also well below the prior-year period for
reasons consistent with those noted above for the second
quarter.
Cerro San Pedro - Costs at Cerro San
Pedro during the quarter were impacted by a combination of lower
gold sales volumes, increased reagent costs to drive higher gold
and silver recoveries and lower silver by-product revenue.
Sustaining capital expenditures at Cerro San Pedro remained similar
to the second quarter of 2013, however, due to lower gold sales
volumes, sustaining capital per ounce increased which impacted
all-in sustaining costs(1) during the
quarter. For the six-month period ended June
30, 2014, all-in sustaining costs(1)
and total cash costs(2) were also
higher than the prior-year period for reasons consistent with those
noted above for the second quarter.
"Our four operations have combined to provide us with a very
solid first half of 2014," stated Robert
Gallagher, President and Chief Executive Officer. "All of
our mines have performed in line with our expectations and it is
rewarding that Mesquite and Cerro San Pedro are now moving into
their scheduled higher production quarters of the year, which
should help drive a strong finish to the year."
Financial Results
Overview
|
New Gold 2014 Second Quarter Summary Financial
Results
|
|
Three months ended
|
Six months ended
|
|
June 30,
|
June 30,
|
(in millions of U.S. dollars; except per share
amounts)
|
2014
|
2013
|
2014
|
2013
|
|
|
|
|
|
Revenues
|
$178.1
|
$183.5
|
$368.6
|
$385.3
|
|
|
|
|
|
Operating Margin(4)
|
82.8
|
77.9
|
174.8
|
173.6
|
|
|
|
|
|
Adjusted Net Earnings(3)
|
8.2
|
4.3
|
26.4
|
24.6
|
Adjusted Net Earnings per
Share(3)
|
0.02
|
0.01
|
0.05
|
0.05
|
|
|
|
|
|
Net Earnings/(loss)
|
16.2
|
15.0
|
14.4
|
51.3
|
Net Earnings/(loss) per Share
|
0.03
|
0.03
|
0.03
|
0.11
|
|
|
|
|
|
Net Cash Generated from Operations
|
59.3
|
(22.5)
|
140.7
|
36.0
|
Adjusted Net Cash Generated from
Operations(5)
|
59.3
|
43.2
|
140.7
|
101.7
|
Revenues during the second quarter of 2014 remained consistent
with the prior-year quarter as increased copper sales volumes
offset planned lower gold sales volumes. The average realized
commodity prices remained consistent with the second quarter of
2013 with the average realized gold and copper prices up slightly
and silver down marginally. For the six-month period ended
June 30, 2014, revenues also remained
similar to the prior-year period as increased copper sales volumes,
primarily driven by New Afton, largely offset the combination of
lower gold sales volumes and lower average realized prices for
gold, copper and silver.
New Gold's operating margin(4) increased
by 6%, or $5 million, in the second
quarter despite slightly lower revenues. The company generated the
higher margin by reducing its operating expenses by $10 million when compared to the prior-year
quarter. The decrease in operating expenses was primarily driven by
the depreciation of the Canadian and Australian dollars and Mexican
peso relative to the U.S. dollar as well as continued operational
efficiency improvements at the company's mines. For the six-month
period ended June 30, 2014, the
company's operating margin(4) remained
consistent with the prior-year period as lower operating expenses
offset the decrease in revenues. All four of the company's
operations generated positive operating
margins(4) in the first half of 2014, with
New Afton continuing to be the most significant contributor.
The company generated adjusted net
earnings(3) of $8
million, or $0.02 per share,
doubling the adjusted net earnings(3) of
the prior-year quarter. The increase in adjusted net
earnings(3) was driven by a combination of
lower exploration expenditures and lower finance costs.
Reported net earnings in the second quarter were $16 million, or $0.03 per share, remaining consistent with the
second quarter of 2013. Second quarter adjusted net
earnings(3) were adjusted for a
$16 million pre-tax foreign exchange
gain which was partially offset by the combination of a
$7 million pre-tax loss on the mark
to market of the company's share purchase warrants and a
$7 million pre-tax non-cash
accounting charge to revenue as the loss incurred on the
monetization of the company's legacy hedge position in May of 2013
is realized into income over the original term of the hedge
contract. For the six-month period ended June 30, 2014, adjusted net
earnings(3) remained consistent with the
same period of the prior year.
New Gold's second quarter net cash generated from operations
increased by 37%, or $16 million, to
$59 million when compared to adjusted
net cash generated from operations(5) in
the second quarter of 2013. The prior-year quarter included an
adjustment for a $66 million charge
related to the settlement of the company's legacy gold hedge
position. The increase in net cash generated from operations when
compared to the prior-year quarter was driven by a combination of
the above-noted $5 million increase
in operating margin(4), an $8 million decrease in exploration costs and a
$15 million decrease in cash taxes as
a higher proportion of the company's profits are generated by New
Afton in Canada where New Gold has
built up a substantial tax basis that results in lower Canadian
cash taxes. These drivers of increased cash flow were partially
offset by an $8 million increase in
use of working capital which included $6
million in tax receivables at Cerro San Pedro. For the
six-month period ended June 30, 2014,
net cash generated from operations increased by 38%, or
$39 million, to $141 million when compared to adjusted net cash
generated from operations(5) in the
prior-year period, despite lower commodity prices.
Projects Overview
New Afton Mill Expansion
New Gold made significant progress on the New Afton mill
expansion project during the second quarter. The project team and
AMEC Americas Limited ("AMEC"), the company's EPCM partner,
completed over 50% of the detailed engineering for the expansion
including the finalization of the plant layout and equipment
requirements. At the same time, early construction works, including
relocation of water pipelines inside and outside of the mill
building, were completed. All of the long lead time equipment has
been ordered and the bulk excavation for the tertiary grinding
building, located immediately adjacent to the current mill
building, has commenced.
The expansion project remains on schedule and New Gold looks
forward to benefitting from the combination of the targeted
increase in throughput to 14,000 tonnes per day and higher gold and
copper recoveries beginning in mid-2015. The project also remains
on budget with a total capital estimate of $45 million, the majority of which is scheduled
to be spent in 2014.
Rainy River
At New Gold's Rainy River
project, located in northwestern Ontario, after completing the feasibility
study during the first quarter of 2014, the procurement of long
lead time items was further advanced while engineering, permitting
and exploration also all continued apace.
Through June 30, 2014,
C$180 million of capital purchase
commitments have been made which primarily consist of the initial
mining fleet as well as the milling equipment. With relatively
limited development activity currently taking place in the
industry, New Gold continues to benefit both in terms of
competitive pricing dynamics for equipment and access to high
quality project development personnel. The cost of expenditures and
commitments made to date has been in line with, or below, those
estimated in the January 2014
Feasibility Study. Capital expenditures during the second quarter
were $15 million and for the
six-month period ended June 30, 2014,
capital expenditures were $24
million.
The company continues to target first production from
Rainy River late in 2016 with a
full year of production anticipated in 2017. Once in full
production, the 21,000 tonne per day, combined open pit-underground
operation is scheduled to produce an average of 325,000 ounces of
gold per year at all-in sustaining costs(1)
of $736 per ounce over the first nine
years of the project's life assuming a 0.95
US$/C$ exchange rate. At this exchange rate assumption, the
project development costs are estimated to be $885 million. As approximately 70% of the
development costs, and an even greater percentage of the operating
costs, are estimated to be Canadian dollar denominated, the
depreciation of the Canadian dollar relative to the U.S. dollar
benefits both of these costs which, in turn, further strengthens
the project economics.
Rainy River - Second Quarter 2014
Highlights
Engineering
- In conjunction with AMEC, the company's EPCM partner, project
development activities continued on schedule
- Established project controls and project management plan
- Completed basic engineering phase including finalizing process
flow sheets and building layouts
- Commenced detailed engineering phase
Permitting and environment
- Continued working closely with Provincial and Federal
regulatory authorities to advance project permitting process
- Per the permitting timelines, the company anticipates release
of Provincial and Federal Final Environmental Assessment review
reports during the third quarter of 2014
Exploration
- Positive preliminary assay results support potential for
additional underground resources both west of planned open pit and
southeast of Intrepid deposit
- Additional drilling for these areas planned in third quarter of
2014
The Rainy River project enhances New Gold's growth pipeline
through its manageable capital costs, significant production scale
at below current industry average costs and exciting regional
exploration potential in a great mining jurisdiction. The company
looks forward to providing further updates on the advancement of
Rainy River through the remainder
of 2014.
Blackwater
The company's Blackwater
project is located in south-central British Columbia. Once in production,
Blackwater is scheduled to produce
an average of 485,000 ounces of gold per year at all-in sustaining
costs(1) of $685 per ounce over the first nine years of the
project's life assuming a 0.95 US$/C$
exchange rate. At this exchange rate assumption, the project
development costs are estimated to be $1,865
million. Consistent with Rainy
River, any depreciation of the Canadian dollar relative to
the U.S. dollar benefits both Blackwater's development and operating costs
as well as the project economics.
As previously disclosed, New Gold's focus in 2014 is to advance
the project through the permitting phase as the company views the
potential of having Blackwater
fully permitted as further enhancing the value of the project.
Blackwater - Second Quarter 2014
Highlights
Permitting and environment
- Completed draft Environmental Assessment report and filed with
key stakeholders and regulators in early July 2014
- Continued discussions on Environmental Assessment cooperation
and Participation Agreements for construction and operation of the
project with neighbouring First Nations
- Continued key engineering studies for components such as the
transmission line, the tailings storage facility and water
management in order to support the broader permitting effort
Exploration
- 2014 field program initiated late in second quarter with focus
on six priority areas
- Specific drill targets confirmed through a combination of
surface mapping, sampling and geophysical surveys
- Targeting completion of 10,000 to 15,000 metres of drilling
with two to three drills in 2014
In the current commodity price environment, New Gold plans to
sequence the development of its projects with the near-term focus
being on the advancement of the lower capital cost Rainy River project. Thereafter, the timing of
Blackwater's development will be
driven by prevailing market conditions over the coming years. When
New Gold has obtained the requisite permits for both projects, the
company believes it will be best positioned to maximize its
flexibility with respect to any future development decisions.
Capital expenditures during the second quarter were $3 million and for the six-month period ended
June 30, 2014, capital expenditures
were $8 million.
El Morro
New Gold's share of the El Morro project provides the company
with a 30% fully-carried interest in an advanced stage, world-class
copper-gold project in north-central Chile. Under the terms of New Gold's agreement
with Goldcorp Inc. ("Goldcorp"), Goldcorp is responsible for
funding New Gold's full 30% share of capital costs. The carried
funding accrues interest at a fixed rate of 4.58%. New Gold will
repay its share of capital plus accumulated interest out of 80% of
its share of the project's cash flow with New Gold retaining 20% of
its share of cash flow from the time production commences.
On April 28, 2014, the Copiapo
Court of Appeals lifted the injunction which had temporarily
suspended construction activity and development works at the El
Morro project. The injunction was originally granted in
November 2013 based on constitutional
actions filed by certain local communities and groups. After
evaluating the constitutional actions, the Copiapo Court of Appeals
declared that there were no grounds on which to accept the actions
and they were rejected resulting in the injunction being lifted. On
July 15, 2014, the same
constitutional actions were heard by the Supreme Court of
Chile and the decision of the
court on this matter is expected in the third quarter of 2014.
Financial Update
At June 30, 2014, New Gold's cash
and cash equivalents were $414
million. In addition, on July 17,
2014, New Gold received a C$23
million payment from the Canada Revenue Agency related to
the company's claim for its 2012 British Columbia Mineral
Exploration Tax Credit. At the end of the quarter the face value of
the company's long-term debt was $886
million (book value - $871
million). The components of the long-term debt are:
$300 million of 7.00% face value
senior unsecured notes due in April
2020; $500 million of 6.25%
face value senior unsecured notes due in November 2022; and $86
million in El Morro funding loans, repayable out of a
portion of New Gold's share of El Morro cash flow upon the start of
production. The company had approximately 504 million common shares
outstanding as at June 30, 2014.
2014 Guidance Reiterated
New Gold is very pleased to reiterate its 2014 guidance for both
production and costs.
With a planned stronger second half of 2014, the company's
consolidated gold production target continues to be 380,000 to
420,000 ounces. Importantly, all four of the company's operations
remain on track to deliver on their original gold production
guidance. Further, with the strong performance of New Afton and the
Peak Mines, consolidated copper production is also on schedule to
be in line with the guidance range of 92 to 100 million pounds and
has the potential to reach the high end of this range. Consolidated
silver production is also expected to achieve guidance of 1.35 to
1.75 million ounces.
Based on the performance of the company's four operations
through the first half of 2014, and New Gold's quarterly plans for
the second half of the year, the guidance for all-in sustaining
costs(1) remains at $815 to $835 per ounce, including total cash
costs(2) of $320 to
$340 per ounce. Overall, the negative impact of the
appreciation of the Canadian and Australian dollars relative to the
company's guidance assumptions as well as lower than assumed copper
prices has been offset by a combination of higher copper production
and increased operational efficiencies. Looking forward to the
final two quarters of 2014, approximately 45% of the company's
second half production is expected in the third quarter, with the
balance in the fourth quarter which is expected to be the company's
strongest of the year. All-in sustaining
costs(1) at the four operations are
expected to remain relatively consistent in the final two quarters
of the year as the increase in the gold production base is expected
to offset increased sustaining capital expenditures. At Mesquite,
four new trucks, which represent approximately $14 million of the mine's 2014 sustaining capital
budget, were purchased in July which will result in elevated all-in
sustaining costs(1) at Mesquite during the
third quarter.
Webcast and Conference
Call
A webcast and conference call to discuss these results will be
held on Thursday, July 31, 2014, at
10:30 a.m. Eastern time. A live audio
webcast will be available at www.newgold.com. Participants may also
join the conference by calling 1-647-427-7450 or toll-free
1-888-231-8191 in North America.
To listen to a recorded playback of the call, please call
1-416-849-0833 or toll-free 1-855-859-2056 in North America - Passcode 73072681. The
archived webcast will also be available at www.newgold.com.
About New Gold Inc.
New Gold is an intermediate gold mining company. The company has
a portfolio of four producing assets and three significant
development projects. The New Afton Mine in Canada, the Mesquite Mine in the United States, the Peak Mines in
Australia and the Cerro San Pedro
Mine in Mexico, provide the
company with its current production base. In addition, New Gold
owns 100% of the Blackwater and
Rainy River projects, both in
Canada, as well as 30% of the El
Morro project located in Chile.
New Gold's objective is to be the leading intermediate gold
producer, focused on the environment and social responsibility. For
further information on the company, please visit
www.newgold.com.
Cautionary Note Regarding Forward-Looking
Statements
Certain information contained in this news release, including
any information relating to New Gold's future financial or
operating performance are "forward looking". All statements in this
news release, other than statements of historical fact, which
address events or developments that New Gold expects to occur are
"forward-looking statements". Forward-looking statements are
statements that are not historical facts and are generally, but not
always, identified by the use of forward-looking terminology such
as "plans", "expects", "is expected", "budget", "scheduled",
"targeted", "estimates", "forecasts", "intends", "anticipates",
"projects", "potential", "believes" or variations of such words and
phrases or statements that certain actions, events or results
"may", "could", "would", "should", "might" or "will be taken",
"occur" or "be achieved" or the negative connotation of such terms.
Forward-looking statements in this news release include, among
others, statements with respect to: guidance for production, total
cash costs and all-in sustaining costs; the results of the Rainy
River Feasibility Study, including the expected production, costs,
grades, NPV, IRR and payback period; planned activities for 2014 at
each of the company's projects; the timing of permitting activities
and environmental assessment processes; and targeted throughput
increase at New Afton, targeted timing for commissioning and full
production related to the New Afton mill expansion, Rainy River and sequencing of Blackwater.
All forward-looking statements in this news release are based on
the opinions and estimates of management as of the date such
statements are made and are subject to important risk factors and
uncertainties, many of which are beyond New Gold's ability to
control or predict. Certain material assumptions regarding our
forward-looking statements are discussed in this news release, New
Gold's MD&As, its Annual Information Form and its Technical
Reports filed at www.sedar.com. In addition to, and subject to,
such assumptions discussed in more detail elsewhere, the
forward-looking statements in this news release are also subject to
the following assumptions: (1) there being no signification
disruptions affecting New Gold's operations; (2) political and
legal developments in jurisdictions where New Gold operates, or may
in the future operate, being consistent with New Gold's current
expectations; (3) the accuracy of New Gold's current mineral
reserve and resource estimates; (4) the exchange rate between the
Canadian dollar, Australian dollar, Mexican peso and U.S. dollar
being approximately consistent with current levels; (5) prices for
diesel, natural gas, fuel oil, electricity and other key supplies
being approximately consistent with current levels; (6) labour and
material costs increasing on a basis consistent with New Gold's
current expectations; (7) permitting and arrangements with First
Nations and other Aboriginal groups in respect of Rainy River and Blackwater being consistent with New Gold's
current expectations; (8) all environmental approvals (including
the environmental assessment process for the Blackwater and Rainy
River projects), required permits, licenses and
authorizations being obtained from the relevant governments and
other relevant stakeholders within the expected timelines; and (9)
the results of the feasibility studies for the Rainy River and
Blackwater projects being
realized.
Forward-looking statements are necessarily based on estimates
and assumptions that are inherently subject to known and unknown
risks, uncertainties and other factors that may cause actual
results, level of activity, performance or achievements to be
materially different from those expressed or implied by such
forward-looking statements. Such factors include, without
limitation: significant capital requirements; price volatility in
the spot and forward markets for commodities; fluctuations in the
international currency markets and in the rates of exchange of the
currencies of Canada, the United States, Australia, Mexico and Chile; discrepancies between actual and
estimated production, between actual and estimated reserves and
resources and between actual and estimated metallurgical
recoveries; changes in national and local government legislation in
Canada, the United States, Australia, Mexico and Chile or any other country in which New Gold
currently or may in the future carry on business; taxation;
controls, regulations and political or economic developments in the
countries in which New Gold does or may carry on business; the
speculative nature of mineral exploration and development,
including the risks of obtaining and maintaining the validity and
enforceability of the necessary licenses and permits and complying
with the permitting requirements of each jurisdiction in which New
Gold operates, including, but not limited to: in Canada, obtaining the necessary permits for
the Blackwater and Rainy River projects; in Mexico, where Cerro San Pedro has a history of
ongoing legal challenges related to our environmental authorization
(EIS); and in Chile, where the
courts have temporarily suspended the approval of the environmental
permit for El Morro; the lack of certainty with respect to foreign
legal systems, which may not be immune from the influence of
political pressure, corruption or other factors that are
inconsistent with the rule of law; the uncertainties inherent to
current and future legal challenges New Gold is or may become a
party to; diminishing quantities or grades of reserves and
resources; competition; loss of key employees; additional funding
requirements; rising costs of labour, supplies, fuel and equipment;
actual results of current exploration or reclamation activities;
uncertainties inherent to mining economic studies including the
feasibility studies for Rainy
River and Blackwater; the
uncertainty with respect to prevailing market conditions necessary
for a positive development decision at Blackwater; changes in project parameters as
plans continue to be refined; accidents; labour disputes; defective
title to mineral claims or property or contests over claims to
mineral properties; unexpected delays and costs inherent to
consulting and accommodating rights of First Nations and other
Aboriginal groups; uncertainties with respect to obtaining all
necessary surface and other land use rights or tenure for
Rainy River; risks, uncertainties
and unanticipated delays associated with obtaining and maintaining
necessary licenses, permits and authorizations and complying with
permitting requirements, including those associated with the
environmental assessment processes for Blackwater and Rainy
River. In addition, there are risks and hazards associated
with the business of mineral exploration, development and mining,
including environmental events and hazards, industrial accidents,
unusual or unexpected formations, pressures, cave-ins, flooding and
gold bullion losses (and the risk of inadequate insurance or
inability to obtain insurance to cover these risks) as well as
"Risk Factors" included in New Gold's disclosure documents filed on
and available at www.sedar.com.
Forward-looking statements are not guarantees of future
performance, and actual results and future events could materially
differ from those anticipated in such statements. All of the
forward-looking statements contained in this news release are
qualified by these cautionary statements. New Gold expressly
disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information,
events or otherwise, except in accordance with applicable
securities laws.
Technical Information
The scientific and technical information in this news release
has been reviewed and approved by Mark A.
Petersen, Vice President, Exploration of New Gold. Mr.
Petersen is an AIPG Certified Professional Geologist and a
"Qualified Person" under National Instrument 43-101.
Non-GAAP Measures
(1) ALL-IN SUSTAINING COSTS
Consistent with guidance announced in 2013 by the World Gold
Council, an association of various gold mining companies from
around the world of which New Gold is a member, New Gold defines
"all-in sustaining costs" per ounce as the sum of total cash costs,
capital expenditures that are sustaining in nature, corporate
general and administrative costs, capitalized and expensed
exploration that is sustaining in nature and environmental
reclamation costs, all divided by the ounces of gold sold to arrive
at a per ounce figure. New Gold believes this non-GAAP financial
measure provides further transparency into costs associated with
producing gold and will assist analysts, investors and other
stakeholders of the company in assessing the company's operating
performance, its ability to generate free cash flow from current
operations and its overall value. This data is furnished to provide
additional information and is a non-GAAP financial measure. All-in
sustaining costs presented do not have a standardized meaning under
GAAP and may not be comparable to similar measures presented by
other mining companies. It should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with GAAP and is not necessarily indicative of cash flow from
operations under GAAP or operating costs presented under GAAP.
Further details regarding all-in sustaining costs and a
reconciliation to the nearest GAAP measures are provided in our
MD&As accompanying our financial statements filed from time to
time on www.sedar.com.
(2) TOTAL CASH COSTS
"Total cash costs" per ounce figures are non-GAAP measures which
are calculated in accordance with a standard developed by The Gold
Institute, a worldwide association of suppliers of gold and gold
products that ceased operations in 2002. Adoption of the standard
is voluntary and the cost measures presented may not be comparable
to other similarly titled measures of other companies. New Gold
reports total cash costs on a sales basis. The company believes
that certain investors use this information to evaluate the
company's ability to generate liquidity through operating cash flow
and that this measure, along with sales, is considered to be a key
indicator of the company's ability to generate operating earnings
and cash flow from its mining operations. Total cash costs include
mine site operating costs such as mining, processing and
administration costs, royalties, production taxes, and realized
gains and losses on fuel contracts, but are exclusive of
amortization, reclamation, capital and exploration costs and net of
by-product sales. Total cash costs are then divided by ounces of
gold sold to arrive at a per ounce figure. Co-product cash costs
remove the impact of other metal sales that are produced as a
by-product of gold production and apportion the cash costs to each
metal produced on a percentage of revenue basis, and subsequently
divides the amount by the total ounces of gold or silver or pounds
of copper sold, as the case may be, to arrive at per ounce or per
pound figures. Unless otherwise indicated, all total cash cost
information in this news release is net of by-product sales. These
measures, along with sales, are considered to be a key indicator of
a company's ability to generate operating earnings and cash flow
from its mining operations. This data is furnished to provide
additional information and is a non-GAAP financial measure. Total
cash costs and co-product cash costs presented do not have a
standardized meaning under GAAP and may not be comparable to
similar measures presented by other mining companies. It should not
be considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP and is not necessarily
indicative of cash flow from operations under GAAP or operating
costs presented under GAAP. Further details regarding total cash
costs and a reconciliation to the nearest GAAP measures are
provided in our MD&As accompanying our financial statements
filed from time to time on www.sedar.com.
|
|
|
|
|
New Gold 2014 Second Quarter Total Cash Costs and
All-in Sustaining Costs Reconciliation
|
|
Three months ended
|
Six months ended
|
|
June 30,
|
June 30,
|
(in millions of U.S. dollars, except where
noted)
|
2014
|
2013
|
2014
|
2013
|
|
|
|
|
|
Operating expenses from continuing
operations
|
$95.3
|
$105.6
|
$193.8
|
$211.7
|
Treatment and refining charges on concentrate
sales
|
8.7
|
6.8
|
17.5
|
14.1
|
Adjustments(1)
|
0.5
|
(0.3)
|
0.4
|
(0.7)
|
|
|
|
|
|
Total cash costs before by-product
revenue
|
104.5
|
112.1
|
211.7
|
225.1
|
By-product copper and silver sales
|
(83.2)
|
(69.9)
|
(166.5)
|
(136.8)
|
|
|
|
|
|
Total cash costs net of by-product
revenue
|
21.3
|
42.2
|
45.2
|
88.3
|
Ounces of gold sold
|
84,736
|
98,037
|
178,788
|
193,218
|
|
|
|
|
|
Total cash cost per gold ounce sold
($/ounce)
|
$251
|
$430
|
$253
|
$457
|
Total cash cost per gold ounce sold - co-product
basis ($/ounce)(2)
|
$682
|
$713
|
$670
|
$754
|
|
|
|
|
|
Total cash costs net of by-product
revenue
|
21.3
|
42.2
|
45.2
|
88.3
|
Sustaining capital expenditures
|
26.5
|
36.1
|
54.1
|
81.2
|
Sustaining exploration - expensed and
capitalized
|
4.2
|
3.7
|
6.3
|
6.6
|
Corporate G&A including share-based
compensation(3)
|
9.9
|
8.9
|
18.3
|
18.4
|
Reclamation expenses
|
1.3
|
0.4
|
2.6
|
0.7
|
|
|
|
|
|
Total all-in sustaining costs
|
63.2
|
91.3
|
126.5
|
195.2
|
|
|
|
|
|
All-in sustaining costs per gold ounce sold
($/ounce)
|
$745
|
$931
|
$707
|
$1,010
|
All-in sustaining costs per gold ounce sold -
co-product basis ($/ounce)(2)
|
$974
|
$1,032
|
$935
|
$1,115
|
|
1. Adjustments include non-cash items related to
royalties and asset retirement obligations.
|
2. Amounts presented on a co-product basis remove the
impact of other metal sales that are produced as a by-product of
our gold production and apportion the cash costs to each metal
produced on a percentage of revenue basis.
|
3. Represents the sum of corporate administration
costs and share-based payment expense per the income statement, net
of any non-cash depreciation within those
figures.
|
|
(3) ADJUSTED NET EARNINGS
"Adjusted net earnings" and "adjusted net earnings per share"
are non-GAAP financial measures. Net earnings have been adjusted
and tax affected for the group of costs in "Other gains and losses"
on the condensed consolidated income statement. The adjusted
entries are also impacted for tax to the extent that the underlying
entries are impacted for tax in the unadjusted net earnings from
continuing operations. The company uses this measure for its own
internal purposes. Management's internal budgets and forecasts and
public guidance do not reflect fair value changes on senior notes
and non-hedged derivatives, foreign currency translation and fair
value through profit or loss and financial asset gains/losses.
Consequently, the presentation of adjusted net earnings and
adjusted net earnings per share enables investors and analysts to
better understand the underlying operating performance of our core
mining business through the eyes of management. Management
periodically evaluates the components of adjusted net earnings and
adjusted net earnings per share based on an internal assessment of
performance measures that are useful for evaluating the operating
performance of our business and a review of the non-GAAP measures
used by mining industry analysts and other mining companies.
Adjusted net earnings and adjusted net earnings per share are
intended to provide additional information only and do not have any
standardized definition under IFRS and may not be comparable to
similar measures presented by other companies. They should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. The measures are not
necessarily indicative of operating profit or cash flows from
operations as determined under IFRS.
|
|
|
|
|
New Gold 2014 Second Quarter Adjusted Net Earnings
Reconciliation
|
|
Three months ended
|
Six months ended
|
|
June 30,
|
June 30,
|
(in millions of U.S. dollars; except per share
amounts)
|
2014
|
2013
|
2014
|
2013
|
|
|
|
|
|
Net earnings
|
$16.2
|
$15.0
|
$14.4
|
$51.3
|
Net earnings per share
|
0.03
|
0.03
|
0.03
|
0.11
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
(Gain)/Loss on foreign exchange
|
(15.8)
|
12.9
|
3.0
|
18.5
|
|
Unrealized loss/(gain) on share purchase
warrants
|
7.1
|
(20.6)
|
4.8
|
(43.2)
|
|
Loss on hedge monetization over original term of
hedge
|
6.9
|
4.7
|
13.7
|
4.7
|
|
Other
|
0.2
|
(9.7)
|
(0.1)
|
(8.5)
|
|
Tax impact of above adjustments
|
(6.4)
|
2.0
|
(9.4)
|
1.8
|
|
|
|
|
|
Adjusted net earnings
|
$8.2
|
$4.3
|
$26.4
|
$24.6
|
Adjusted net earnings per share
|
0.02
|
0.01
|
0.05
|
0.05
|
|
|
|
|
|
(4) OPERATING MARGIN
"Operating margin" is a non-GAAP financial measure with no
standard meaning under GAAP, which management uses to further
evaluate the company's results of operations in each reporting
period. Operating margin is calculated as revenue less operating
expenses and therefore does not include depreciation and depletion.
Operating margin is intended to provide additional information only
and does not have any standardized definition under IFRS; it should
not be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. Other companies may
calculate this measure differently and this measure is unlikely to
be comparable to similar measures presented by other companies.
|
|
|
|
|
New Gold 2014 Second Quarter Operating Margin
Reconciliation
|
|
Three months ended
|
Six months ended
|
|
June 30,
|
June 30,
|
(in millions of U.S. dollars)
|
2014
|
2013
|
2014
|
2013
|
|
|
|
|
|
Revenues
|
$178.1
|
$183.5
|
$368.6
|
$385.3
|
Operating expenses
|
95.3
|
105.6
|
193.8
|
211.7
|
|
|
|
|
|
Operating margin
|
$82.8
|
$77.9
|
$174.8
|
$173.6
|
|
|
|
|
|
(5) ADJUSTED NET CASH GENERATED FROM OPERATIONS
"Adjusted net cash generated from operations" is a non-GAAP
financial measure. Net cash generated from operations has been
adjusted for a one-time charge incurred in the second quarter of
2013 related to the settlement of the company's legacy gold hedge
position. The company believes the presentation of adjusted net
cash generated from operations enables investors and analysts to
better understand the underlying operating performance of our core
mining business. Adjusted net cash generated from operations is
intended to provide additional information only and does not have
any standardized meaning under IFRS. It should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with IFRS.
|
|
|
|
|
New Gold 2014 Second Quarter Adjusted Net Cash
from Operations Reconciliation
|
|
Three months ended
|
Six months ended
|
|
June 30,
|
June 30,
|
(in millions of U.S. dollars)
|
2014
|
2013
|
2014
|
2013
|
|
|
|
|
|
Net cash (used) generated from
operations
|
$59.3
|
($22.5)
|
$140.7
|
$36.0
|
|
Add back: Settlement payment of gold hedge
contracts
|
0.0
|
65.7
|
0.0
|
65.7
|
|
|
|
|
|
Adjusted net cash generation from
operations
|
$59.3
|
$43.2
|
$140.7
|
$101.7
|
|
|
|
|
|
CONDENSED
CONSOLIDATED INCOME STATEMENTS
|
(unaudited)
|
|
Three months ended
June 30
|
|
Six months ended June
30
|
|
|
$
|
|
$
|
|
$
|
|
$
|
(In millions of U.S.
dollars, except per share amounts)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
178.1
|
|
183.5
|
|
368.6
|
|
385.3
|
Operating
expenses
|
|
95.3
|
|
105.6
|
|
193.8
|
|
211.7
|
Depreciation and
depletion
|
|
52.7
|
|
44.1
|
|
104.3
|
|
82.0
|
Earnings from mine
operations
|
|
30.1
|
|
33.8
|
|
70.5
|
|
91.6
|
|
|
|
|
|
|
|
|
|
Corporate
administration
|
|
7.9
|
|
7.3
|
|
14.2
|
|
14.6
|
Share-based payment
expenses
|
|
2.3
|
|
1.8
|
|
4.5
|
|
4.3
|
Exploration and
business development
|
|
4.3
|
|
11.9
|
|
7.4
|
|
15.9
|
Income from
operations
|
|
15.6
|
|
12.8
|
|
44.4
|
|
56.8
|
|
|
|
|
|
|
|
|
|
|
Finance
income
|
|
0.2
|
|
0.2
|
|
0.5
|
|
0.6
|
|
Finance
costs
|
|
(7.3)
|
|
(11.4)
|
|
(14.7)
|
|
(22.9)
|
|
Other (losses)
gains
|
|
8.5
|
|
17.4
|
|
(7.7)
|
|
33.2
|
|
|
|
|
|
|
|
|
|
Earnings before
taxes
|
|
17.0
|
|
19.0
|
|
22.5
|
|
67.7
|
Income tax
expense
|
|
(0.8)
|
|
(4.0)
|
|
(8.1)
|
|
(16.4)
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
16.2
|
|
15.0
|
|
14.4
|
|
51.3
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.03
|
|
0.03
|
|
0.03
|
|
0.11
|
|
Diluted
|
|
0.03
|
|
0.03
|
|
0.03
|
|
0.11
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding (in millions)
|
|
|
|
|
|
|
|
|
|
Basic
|
|
503.8
|
|
477.0
|
|
503.6
|
|
476.6
|
|
Diluted
|
|
505.6
|
|
480.0
|
|
505.6
|
|
480.1
|
|
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
|
(unaudited)
|
|
|
|
|
|
June 30
|
|
December 31
|
|
|
|
|
|
$
|
|
$
|
(In millions of U.S. dollars)
|
|
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
414.0
|
|
414.4
|
|
Trade and other receivables
|
|
|
|
|
52.5
|
|
19.3
|
|
Inventories
|
|
|
|
|
202.1
|
|
182.0
|
|
Current income tax receivable
|
|
|
|
|
29.0
|
|
31.8
|
|
Prepaid expenses and other
|
|
|
|
|
5.8
|
|
10.5
|
Total current assets
|
|
|
|
|
703.4
|
|
658.0
|
|
|
|
|
|
|
|
|
Investments
|
|
|
|
|
0.6
|
|
0.5
|
Non-current inventories
|
|
|
|
|
30.2
|
|
31.0
|
Mining interests
|
|
|
|
|
3,360.9
|
|
3,336.5
|
Deferred tax assets
|
|
|
|
|
182.5
|
|
171.0
|
Other
|
|
|
|
|
1.8
|
|
2.0
|
Total assets
|
|
|
|
|
4,279.4
|
|
4,199.0
|
|
|
|
|
|
|
|
|
Liabilities and equity
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
|
|
|
101.6
|
|
90.2
|
Total current liabilities
|
|
|
|
|
101.6
|
|
90.2
|
|
|
|
|
|
|
|
|
Reclamation and closure cost
obligations
|
|
|
|
66.3
|
|
61.4
|
Provisions
|
|
|
|
|
10.5
|
|
9.4
|
Share purchase warrants
|
|
|
|
|
32.4
|
|
27.8
|
Long-term debt
|
|
|
|
|
870.5
|
|
862.5
|
Deferred tax liabilities
|
|
|
|
|
403.4
|
|
381.0
|
Deferred benefit
|
|
|
|
|
46.3
|
|
46.3
|
Other
|
|
|
|
|
0.4
|
|
0.5
|
Total liabilities
|
|
|
|
|
1,531.4
|
|
1,479.1
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
Common shares
|
|
|
|
|
2,817.4
|
|
2,815.3
|
Contributed surplus
|
|
|
|
|
93.5
|
|
90.0
|
Other reserves
|
|
|
|
|
(9.5)
|
|
(17.6)
|
Deficit
|
|
|
|
|
(153.4)
|
|
(167.8)
|
Total equity
|
|
|
|
|
2,748.0
|
|
2,719.9
|
Total liabilities and equity
|
|
|
|
|
4,279.4
|
|
4,199.0
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
(unaudited)
|
|
|
Three months ended June 30
|
|
Six months ended June 30
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
(In millions of U.S. dollars)
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
Operating activities
|
|
|
|
|
|
|
|
|
|
Net (loss) earnings
|
|
|
16.2
|
|
15.0
|
|
14.4
|
|
51.3
|
Adjustments for:
|
|
|
|
|
|
|
|
|
|
|
Realized losses on gold contracts
|
|
|
6.9
|
|
3.9
|
|
13.7
|
|
1.2
|
|
Realized and unrealized foreign exchange losses
(gains)
|
|
|
(15.8)
|
|
12.9
|
|
3.0
|
|
18.5
|
|
Unrealized losses (gains) on share purchase
warrants
|
|
|
7.1
|
|
(20.6)
|
|
4.8
|
|
(43.2)
|
|
Unrealized (gains) losses on concentrate
contracts
|
|
|
(2.3)
|
|
0.5
|
|
(0.7)
|
|
1.0
|
|
Settlement payment of gold hedge
contracts
|
|
|
-
|
|
(65.7)
|
|
-
|
|
(65.7)
|
|
Reclamation and closure costs paid
|
|
|
(0.4)
|
|
(0.6)
|
|
(0.6)
|
|
(1.0)
|
|
Loss (gain) on disposal of assets
|
|
|
-
|
|
0.7
|
|
(0.3)
|
|
1.2
|
|
Depreciation and depletion
|
|
|
52.5
|
|
44.5
|
|
104.0
|
|
82.3
|
|
Equity-settled share-based payment
expense
|
|
|
1.2
|
|
2.1
|
|
2.9
|
|
4.2
|
|
Realized and unrealized losses on cash flow hedging
items
|
|
|
-
|
|
(10.0)
|
|
-
|
|
(9.5)
|
|
Income tax expense
|
|
|
0.8
|
|
4.0
|
|
8.1
|
|
16.4
|
|
Finance income
|
|
|
(0.2)
|
|
(0.2)
|
|
(0.5)
|
|
(0.6)
|
|
Finance costs
|
|
|
7.3
|
|
11.4
|
|
14.7
|
|
22.9
|
|
|
|
73.3
|
|
(2.1)
|
|
163.5
|
|
79.0
|
|
Change in non-cash operating working
capital
|
|
|
(12.6)
|
|
(4.2)
|
|
(21.3)
|
|
(17.1)
|
Cash generated from operations
|
|
|
60.7
|
|
(6.3)
|
|
142.2
|
|
61.9
|
|
Income taxes paid
|
|
|
(1.4)
|
|
(16.2)
|
|
(1.5)
|
|
(25.9)
|
Net cash generated from (used by)
operations
|
|
|
59.3
|
|
(22.5)
|
|
140.7
|
|
36.0
|
|
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
Mining interests
|
|
|
(60.3)
|
|
(61.0)
|
|
(116.9)
|
|
(137.4)
|
|
Proceeds from the sale of assets
|
|
|
-
|
|
-
|
|
0.3
|
|
-
|
|
Interest received
|
|
|
0.2
|
|
0.2
|
|
0.4
|
|
0.4
|
Cash used in investing activities
|
|
|
(60.1)
|
|
(60.8)
|
|
(116.2)
|
|
(137.0)
|
|
|
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
|
|
|
|
Issuance of common shares on exercise of options and
warrants
|
|
|
0.4
|
|
0.7
|
|
1.0
|
|
4.4
|
|
Financing initiation costs
|
|
|
-
|
|
-
|
|
-
|
|
(0.3)
|
|
Interest paid
|
|
|
(26.1)
|
|
(26.3)
|
|
(26.1)
|
|
(26.3)
|
Cash used by financing activities
|
|
|
(25.7)
|
|
(25.6)
|
|
(25.1)
|
|
(22.2)
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash
equivalents
|
|
|
2.4
|
|
(1.0)
|
|
0.2
|
|
(2.1)
|
|
|
|
|
|
|
|
|
|
|
Change in cash and cash equivalents
|
|
|
(24.1)
|
|
(109.9)
|
|
(0.4)
|
|
(125.3)
|
Cash and cash equivalents, beginning of the
period
|
|
|
438.1
|
|
672.4
|
|
414.4
|
|
687.8
|
Cash and cash equivalents, end of the
period
|
|
|
414.0
|
|
562.5
|
|
414.0
|
|
562.5
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents are comprised
of:
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
284.0
|
|
267.5
|
|
284.0
|
|
267.5
|
|
Short-term money market instruments
|
|
|
130.0
|
|
295.0
|
|
130.0
|
|
295.0
|
|
|
|
414.0
|
|
562.5
|
|
414.0
|
|
562.5
|
SOURCE New Gold Inc.