Increases Cash Flow Despite Lower Metal Prices
(All figures are in US dollars unless otherwise indicated)
TORONTO,
Oct. 30, 2014 /PRNewswire/ - New Gold
Inc. ("New Gold") (TSX:NGD) and (NYSE MKT:NGD) today announces its
third quarter 2014 operational and financial results. The company
produced 93,367 ounces of gold at all-in sustaining
costs(1) of $848 per
ounce, including total cash costs(2) of $311 per ounce. New Gold delivered $79 million in net cash generated from operations
before changes in working capital(3) including
$58 million in net cash generated
from operations.
Third Quarter 2014 Highlights
- Gold production of 93,367 ounces coupled with 8% increase in
copper production to 25.6 million pounds relative to the prior-year
quarter
- Adjusted net earnings(4) of $5 million, or $0.01 per share
- Net cash generated from operations before changes in working
capital(3) increased by 16% to $79 million relative to the prior-year
quarter
-
- Increased by 29% to $241 million
in the nine-month period ended September 30,
2014
- Net cash generated from operations increased by 61% to
$58 million relative to the
prior-year quarter
-
- Increased by 175% to $199 million
in the nine-month period ended September 30,
2014
- $416 million in cash and cash
equivalents at September 30,
2014
- Rainy River - positive
Provincial and Federal Environmental Assessment Review Reports
released
- Further strengthened management team with addition of
David Schummer as Chief Operating
Officer
- 2014 production and cost guidance reiterated
"The third quarter saw our company achieve
multiple important successes," stated Randall Oliphant, Executive Chairman. "We
increased quarter-over-quarter gold production as planned, advanced
our growth projects, progressed our exploration initiatives and
strengthened our team. Most importantly, we are particularly proud
to have, once again, delivered increased cash flow for our
shareholders and now look forward to finishing 2014 with our
strongest quarter of the year."
2014 Guidance Reiterated
New Gold is pleased to reiterate its 2014
guidance for both production and costs.
As previously announced, the fourth quarter is
scheduled to be New Gold's strongest of the year which should bring
the company's consolidated full-year gold production into the
380,000 to 420,000 ounce guidance range. Gold production at New
Afton and the Peak Mines is scheduled to be at the mid-point of
their respective guidance ranges, while production at Mesquite and
Cerro San Pedro is expected be at the low end of their ranges. At
the same time, with the strong year-to-date performance of New
Afton and the Peak Mines, consolidated copper production is
positioned to meet or exceed the high end of the guidance range of
92 to 100 million pounds. Consolidated silver production is
expected to achieve the guidance of 1.35 to 1.75 million
ounces.
Based on the cost profile of the company's four
operations through the first nine months of 2014, and New Gold's
fourth quarter plans, the full-year guidance for all-in sustaining
costs(1) remains at $815 to
$835 per ounce. Guidance for 2014 total cash
costs(2), which form a component of all-in sustaining
costs(1), also remains at $320 to
$340 per ounce. Costs at each of New Afton, Mesquite and the
Peak Mines are tracking towards the low end of their respective
full-year guidance ranges while Cerro San Pedro's costs are likely
to be slightly above its guidance range. On a consolidated basis,
the combination of higher copper production, increased productivity
and lower sustaining capital expenditures should continue to offset
the negative impact of lower by-product metal prices.
Operations Overview
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|
|
|
|
New Gold Summary
Operational Results |
|
Three months
ended |
Nine months
ended |
|
September
30, |
September
30, |
|
2014 |
2013 |
2014 |
2013 |
Gold Production (thousand ounces) |
|
|
|
|
New Afton |
25.6 |
25.2 |
79.3 |
62.0 |
Mesquite |
26.3 |
20.8 |
70.4 |
72.1 |
Peak Mines |
28.3 |
23.9 |
77.1 |
76.5 |
Cerro San Pedro |
13.2 |
24.0 |
47.3 |
80.6 |
Total Gold Production |
93.4 |
94.0 |
274.1 |
291.2 |
|
|
|
|
|
Total Gold Sales |
88.2 |
94.1 |
267.0 |
287.3 |
Average Realized Gold Price ($ per ounce) |
$1,236 |
$1,359 |
$1,283 |
$1,375 |
|
|
|
|
|
Silver Production (thousand ounces) |
|
|
|
|
New Afton |
59.8 |
53.7 |
183.2 |
137.7 |
Peak Mines |
32.6 |
23.0 |
99.4 |
81.1 |
Cerro San Pedro |
138.3 |
219.4 |
783.0 |
1,003.1 |
Total Silver Production |
230.7 |
296.1 |
1,065.6 |
1,221.8 |
|
|
|
|
|
Total Silver Sales |
233.6 |
297.7 |
1,064.4 |
1,193.4 |
Average Realized Silver Price ($ per ounce) |
$19.66 |
$21.15 |
$19.90 |
$24.13 |
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|
|
Copper Production (million pounds) |
|
|
|
|
New Afton |
21.1 |
20.9 |
64.1 |
51.4 |
Peak Mines |
4.6 |
2.8 |
12.9 |
9.9 |
Total Copper Production |
25.6 |
23.7 |
77.0 |
61.4 |
|
|
|
|
|
Total Copper Sales |
22.7 |
23.5 |
72.2 |
58.8 |
Average Realized Copper Price ($ per pound) |
$3.11 |
$3.25 |
$3.06 |
$3.24 |
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|
|
|
|
Total Cash Costs(2) ($ per ounce) |
|
|
|
|
New Afton |
($1,245) |
($1,310) |
($1,264) |
($1,104) |
Mesquite |
951 |
1,017 |
937 |
936 |
Peak Mines |
568 |
856 |
641 |
874 |
Cerro San Pedro |
1,604 |
723 |
1,185 |
605 |
Total Cash Costs(2) |
$311 |
$280 |
$272 |
$399 |
|
|
|
|
|
All-in Sustaining Costs(1) ($ per ounce) |
|
|
|
|
New Afton |
($700) |
($365) |
($680) |
($191) |
Mesquite |
1,625 |
1,098 |
1,354 |
1,162 |
Peak Mines |
873 |
1,332 |
955 |
1,405 |
Cerro San Pedro |
1,701 |
771 |
1,317 |
674 |
All-in Sustaining Costs(1) |
$848 |
$779 |
$754 |
$905 |
Gold Production
Consolidated gold production during the third
quarter remained consistent with the prior-year quarter as
increases in production at each of New Afton, Mesquite and the Peak
Mines offset a planned decrease in production at Cerro San Pedro.
Consistent with the company's guidance, production increased when
compared to the second quarter of 2014 with further increases in
production projected for the fourth quarter. The fourth quarter is
scheduled to be the company's strongest of the year, with higher
expected production at Mesquite and Cerro San Pedro, stemming from
increased ore tonnes at higher grades being placed on the leach
pads, and continued strong performance at New Afton and the Peak
Mines.
New Afton - Gold production during the
quarter remained consistent with both the prior-year quarter and
the first two quarters of 2014. The steady gold production at New
Afton was a result of an increase in average daily throughput to
over 13,000 tonnes, which offset planned decreases in gold grade
processed to 0.76 grams per tonne and lower recovery from the
combination of higher throughput and lower grade. For the
nine-month period ended September 30,
2014, gold production increased by 28% compared to the same
period of the prior year due to a combination of higher throughput
and gold grade.
Mesquite - As outlined in the company's
second quarter results announcement, Mesquite's third quarter
production was scheduled to benefit from increased ore tonnes being
placed on the leach pad in the latter half of the second quarter.
As anticipated, third quarter gold production increased by 26% when
compared to the prior-year quarter and 42% when compared to the
second quarter of 2014. Consistent with the mine plan, the
combination of a further 35% increase in ore tonnes placed and 10%
higher grade in the third quarter of 2014, compared to the second
quarter, is expected to result in the fourth quarter being
Mesquite's best of the year. For the nine-month period ended
September 30, 2014, gold production
was comparable with the prior year as the planned decrease in ore
tonnes placed was offset by increased gold grade.
Peak Mines - Gold production increased by
18% when compared to the prior-year quarter due to the mining and
processing of higher gold grade. The average gold grade processed
in the third quarter was 4.9 grams per tonne, up from 3.9 grams per
tonne in the prior-year quarter and consistent with the second
quarter of 2014. For the nine-month period ended September 30, 2014, gold production was
consistent with the same period of the prior year as throughput,
grade and recovery all remained similar.
Cerro San Pedro - Cerro San Pedro's
production was below that of the prior-year quarter due to the
impact of mining activity through the beginning of the third
quarter being primarily focused on waste stripping. Consistent with
the mine plan, both the ore tonnes placed on the leach pad and gold
grade increased throughout the third quarter. Ore tonnes placed
increased by 12% and gold grade increased by 50% when compared to
the second quarter of 2014. Importantly, approximately 50% of the
total quarterly ore tonnes, which were also the highest grade, were
placed in September, which should drive higher fourth quarter
production. During the nine-month period ended September 30, 2014, production was below the same
period of the prior year for reasons consistent with those noted
above for the quarter.
Copper Production
Copper production increased by 8% when compared
to the third quarter of 2013 driven by higher production at both
New Afton and the Peak Mines. New Afton continued its strong
performance with increased throughput more than offsetting slight
decreases in copper grade and recovery resulting from the higher
throughput. Production at the Peak Mines increased by over 60% when
compared to the prior-year quarter, benefitting from a combination
of higher copper grade and increased recovery. For the nine-month
period ended September 30, 2014,
consolidated copper production increased by 15.6 million pounds, or
25%, to 77.0 million pounds.
Silver Production
Silver production in both the third quarter and
first nine 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 increased silver production at New Afton and the Peak
Mines.
All-in Sustaining Costs(1) and Total
Cash Costs(2)
New Gold continues to be among the lowest cost
producers in the industry with third quarter all-in sustaining
costs(1) of $848 per
ounce, including total cash costs(2) of $311 per ounce. The sum of the company's
operating expenses, sustaining capital, exploration and corporate
administration expenditures remained comparable with the prior-year
quarter. However, all-in sustaining costs(1) and total
cash costs(2) increased slightly when compared to the
third quarter of 2013 as gold sales volumes were below those of the
prior period due to timing of sales. For the nine-month period
ended September 30, 2014, New Gold's
all-in sustaining costs(1) of $754 per ounce and total cash costs(2)
of $272 per ounce were both new
record lows for the company.
New Afton - All-in sustaining
costs(1) decreased when compared to the prior-year
quarter while total cash costs(2) remained consistent.
The combination of the mine's strong operating performance and the
continued depreciation of the Canadian dollar relative to the U.S.
dollar offset the impact of lower copper by-product revenue
resulting from lower average realized copper prices. The mine's
Canadian dollar operating costs, including mining, processing and
general and administrative costs, were below C$18 per tonne during the third quarter.
Sustaining capital expenditures at New Afton of
$13 million during the third quarter
were below those of the prior-year quarter which drove the decrease
in all-in sustaining costs(1).
New Afton's third quarter co-product cash
costs(2) decreased to $383
per ounce of gold and $1.04 per pound
of copper from $454 per ounce of gold
and $1.05 per pound of copper in the
prior-year quarter. The mine's co-product all-in sustaining
costs(1) also decreased to $560 per ounce of gold and $1.51 per pound of copper from $784 per ounce of gold and $1.81 per pound of copper in the third quarter of
2013.
During the nine-month period ended September 30, 2014, New Afton was able to reduce
its already peer-leading unit costs, delivering lower all-in
sustaining costs(1) and total cash costs(2),
when computed on both a by-product and co-product basis, relative
to the same period of the prior year.
Mesquite - Total cash costs(2)
at Mesquite were below those of the prior-year quarter driven by
higher gold sales volumes. As disclosed in the company's second
quarter results announcement, approximately 50% of Mesquite's 2014
full-year sustaining capital was scheduled for the third quarter
which resulted in the mine's all-in sustaining costs(1)
being atypically high. Mesquite had $17
million of sustaining capital expenditures during the
quarter, including four new haul trucks and work on the leach pad
expansion, compared to $2 million in
the third quarter of 2013. For the nine-month period ended
September 30, 2014, Mesquite's total
cash costs(2) were consistent with the same period of
the prior year. All-in sustaining costs(1) increased
over the same period due to the planned increase in sustaining
capital expenditures in 2014, including the purchase of the four
haul trucks which is non-recurring in nature.
Peak Mines - All-in sustaining
costs(1) and total cash costs(2) at the Peak
Mines continued to decrease when compared to both the prior-year
quarter and the second quarter of 2014. Total cash
costs(2) decreased by $288
per ounce compared to the third quarter of the prior year due to a
combination of higher gold sales volumes and further productivity
improvements. Sustaining capital and exploration expenditures at
the Peak Mines of $6 million during
the quarter were also lower than the prior-year quarter which
helped drive a $459 per ounce
decrease in all-in sustaining costs(1). For the
nine-month period ended September 30,
2014, all-in sustaining costs(1) decreased by
$450 per ounce and total cash
costs(2) decreased by $233
per ounce when compared to the same period of the prior year for
reasons consistent with those noted above for the quarter.
Cerro San Pedro - Costs at Cerro San
Pedro during the quarter were above the prior-year quarter,
primarily due to the mine's largely fixed operating costs being
attributed to planned lower gold sales volumes. In addition, costs
were impacted by increased reagent costs and lower silver
by-product revenue, due to lower silver sales volumes and realized
prices. For the nine-month period ended September 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 third quarter. As the phase five
stripping campaign is now completed, costs are expected to decrease
in future periods.
"Our operating performance through the first
nine months of the year positions us well to deliver our full-year
guidance," stated Robert Gallagher,
President and Chief Executive Officer. "New Afton and the Peak
Mines continue to perform very well. At the same time, at both
Mesquite and Cerro San Pedro we have seen progressively more ore,
at higher grades, being loaded to the pads which should drive our
strong finish to the year."
Financial Results Overview
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New Gold Summary Financial
Results |
|
Three months ended |
Nine months ended |
|
September 30, |
September 30, |
(in millions of U.S. dollars; except per share
amounts) |
2014 |
2013 |
2014 |
2013 |
|
|
|
|
|
Revenues |
$169.3 |
$196.0 |
$537.9 |
$581.3 |
|
|
|
|
|
Operating
Margin(5) |
75.1 |
93.9 |
249.9 |
267.5 |
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|
|
|
Adjusted Net
Earnings(4) |
5.4 |
20.0 |
31.8 |
44.6 |
Adjusted Net Earnings per
Share(4) |
0.01 |
0.04 |
0.06 |
0.09 |
|
|
|
|
|
Net (Loss)/Earnings |
(59.6) |
12.2 |
(45.2) |
63.5 |
Net (Loss)/Earnings per Share |
(0.12) |
0.02 |
(0.09) |
0.13 |
|
|
|
|
|
Adjusted Net Cash Generated from
Operations before
Changes in Working Capital(3) |
78.6 |
68.0 |
240.6 |
186.8 |
Net Cash Generated from Operations |
58.2 |
36.2 |
198.9 |
72.2 |
Revenues were lower than the prior-year quarter
due to a combination of lower realized prices for each of the
metals New Gold produces as well as the timing of sales, which
resulted in not all of the company's production being sold. The
average realized gold price was down $123 per ounce when compared to the prior-year
quarter due to a combination of the overall decline in the gold
price and New Afton's quarterly gold sales being marked at the
September 30, 2014 price, which was
at the low of the quarter. At the same time, the average realized
price was down $1.49 per ounce for
silver and $0.14 per pound for copper
when compared to the third quarter of 2013. For the nine-month
period ended September 30, 2014,
revenues decreased relative to the prior-year period as the
combination of lower gold, silver and copper prices and lower gold
sales volumes was only partially offset by the benefit of increased
copper sales volumes. At metal prices consistent with those
realized in 2013, the company's sales volumes in the first nine
months would have resulted in higher revenues than in the
prior-year period.
New Gold's operating expenses were consistent
with the prior-year quarter as the depreciation of the Canadian
dollar relative to the U.S. dollar and continued increases in
productivity at the company's mines offset increased consumable
costs. The company's operating margin(5) was below that
of the third quarter of 2013 due to the decrease in revenues noted
above. For the nine-month period ended September 30, 2014, New Gold's operating expenses
were $26 million, or 8%, lower than
the prior-year period which, when combined with the above-noted
decline in revenues, resulted in a decrease in the company's
operating margin(5).
The company generated adjusted net
earnings(4) of $5 million,
or $0.01 per share and reported a net
loss of $60 million, or $0.12 per share, where the net loss was driven by
the combination of a $48 million
non-cash tax expense related to El Morro and the increase in the
Chilean tax rate from 20% to 35% as well as a $23 million pre-tax foreign exchange loss. Third
quarter adjusted net earnings(4) were adjusted for the
two items noted above as well as a $9
million pre-tax gain on the mark to market of the company's
share purchase warrants and a $7
million pre-tax non-cash 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 nine-month period ended September 30, 2014, adjusted net
earnings(4) were below the same period of the prior year
primarily due to the above-noted decrease in revenues.
New Gold's third quarter net cash generated from
operations before changes in working capital(3)
increased by 16% to $79 million when
compared to $68 million in adjusted
net cash generated from operations before changes in working
capital(3) in the prior-year quarter. In addition to
adjustments for working capital in both periods, the third quarter
of 2013 included adjustments for $18
million in Rainy River
transaction costs whereas the current quarter included no
adjustments. The 16% increase, which was delivered despite lower
metal prices, was driven by a combination of a $15 million decrease in cash taxes, resulting
from a tax refund at the Peak Mines and a higher proportion of the
company's profits being generated by New Afton in Canada where New Gold has built up a
substantial tax basis, and an aggregate $9
million decrease in corporate administration and exploration
expenses. These drivers of increased cash flow were partially
offset by the previously noted decrease in revenues stemming from
lower metal prices. Working capital used during the quarter was
driven by the combination of an increase in the inventory of
recoverable ounces being placed on the leach pad at Mesquite and
the increase in Mexican tax receivables. Net cash generated from
operations increased by $22 million,
or 61%, to $58 million, primarily as
the prior-year quarter was negatively impacted by the above-noted
$18 million in Rainy River transaction costs. For the
nine-month period ended September 30,
2014, net cash generated from operations before changes in
working capital(3) increased by 29% to $241 million, despite lower gold and copper
prices. Net cash generated from operations increased by 175% to
$199 million as the prior-year period
was impacted by a total of $84
million in non-recurring cash outflows including
$66 million related to the unwinding
of the company's legacy hedge position as well as the above-noted
Rainy River transaction costs.
Financial Update
At September 30,
2014, New Gold's cash and cash equivalents were $416 million. In addition, as announced on
August 14th, the company
put in place a $300 million revolving
credit facility of which $43 million
has been used to issue letters of credit with the balance remaining
undrawn. At the end of the quarter the face value of the company's
long-term debt was $887 million (book
value - $872 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
$87 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
September 30, 2014.
Project Development Update
New Afton Mill Expansion
New Gold continued to successfully advance the
New Afton mill expansion project during the third quarter. The
first pour of the concrete foundation for the tertiary grinding
building was completed in September and, subsequent to the quarter
end, all of the detailed engineering for the expansion was
completed. At the same time, all procurement packages for ancillary
equipment, including building cladding and roofing as well as
electrical and process control systems, have been issued for
tender.
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.
Rainy River
At New Gold's Rainy
River project, located in northwestern Ontario, two significant permitting milestones
were recently achieved. At the same time, detailed engineering and
exploration activities continued to advance throughout the third
quarter. See section Exploration Update below for further
information on exploration activity at Rainy River.
Rainy River -
Third Quarter 2014 Highlights
Permitting and environment
- Provincial Environmental Assessment Review Report released on
September 19th with
subsequent public consultation period now also completed
- Federal Environmental Assessment Review Report released on
October 10th currently in
the midst of a 30-day public consultation period
Engineering and Procurement
- Project development activities continued on schedule
-
- Long lead equipment ordered, including mining fleet, mills,
crushers and main transformer
- Detailed engineering for tailings facilities and access roads
substantially complete
- Detailed engineering for process plant 30% complete
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 below industry average costs. Both the project's
development and operating costs are benefitting from the continued
depreciation of the Canadian dollar as approximately 70% of the
development costs, and an even greater percentage of the operating
costs, are estimated to be Canadian dollar denominated.
Through September 30,
2014, $162 million of capital
purchase commitments have been made which primarily consist of the
initial mining fleet as well as milling equipment. Capital
expenditures during the third quarter were $20 million and for the nine-month period ended
September 30, 2014, capital
expenditures were $44 million.
Blackwater
The company's Blackwater project is located in south-central
British Columbia. As previously
disclosed, New Gold's focus in 2014 and 2015 is to advance the
project through the permitting phase. The company achieved a key
milestone in the permitting process subsequent to the quarter end
as, on October 7th, New
Gold filed the final Environmental Assessment report for the
project with regulators.
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.
Once in production, Blackwater is scheduled to produce an average
of 485,000 ounces of gold per year at below industry average costs.
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.
Capital expenditures during the third quarter
were $2 million and for the
nine-month period ended September 30,
2014, capital expenditures were $10
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 October 7,
2014, a decision by the Supreme Court of Chile overturned the April 2014 Copiapo Court of Appeals decision
which had lifted the injunction that had temporarily suspended
construction activity and development works at the El Morro
project. As a result of the Supreme Court decision, construction
and development activity at El Morro remains on hold, however,
engineering and design work continues. SEA, the Chilean
Environmental Authority who initially approved the project's
environmental permit, Goldcorp and the company continue to evaluate
the path forward. New Gold remains committed to open and
transparent dialogue with all stakeholders and to responsible
practices in accordance with the highest applicable health, safety
and environmental standards.
Exploration Update
New Afton C-zone
The company's exploration focus at New Afton
continues to be on the C-zone resource which extends along strike
and below the B-zone block cave reserve that is currently being
mined. New Gold provided a detailed update on the results of its
C-zone exploration activities on September
11, 2014 and since that time has received assay results for
an additional five drill holes. The latest results include gold and
copper grades as well as true widths that remain consistent with
those highlighted in the company's September news release. Based on
the review of all of the assay results received to date, the
overall continuity of mineralization and grade within the C-zone
remains strong with the added benefit of localized intervals of
higher grade gold and copper being distributed along a well-defined
geologic structure which forms the core of the C-zone resource.
Through September 30,
2014, 49 holes totaling 36,116 metres were completed as part
of the 2014 exploration program. Four underground diamond drills
remain active, targeting an additional 10,000 metres of drilling in
the fourth quarter, with two drills dedicated to upgrading the
resource and two drills focused on expanding the resource further
to the west.
Rainy River
At Rainy River,
the company's exploration program is targeting the areas offering
the best potential for additional mineral resources that could be
incorporated into the near to medium-term mine plan and thus
further enhance the already solid project economics. Two zones of
near surface mineralization located immediately adjacent to the
current open pit reserves are being targeted where one is situated
to the west of the deposit and the other is to the southeast. At
the same time, several zones of deeper Inferred mineral resources
proximal to the current underground mineral reserve stopes are
being drilled to test their potential for upgrading to Measured and
Indicated status and incorporation into the underground mine
plan.
In aggregate, 187 holes totaling 53,698 metres
were completed at Rainy River
through September 30, 2014, with
drilling apportioned evenly between the open pit and underground
targets. An additional 3,000 metres is planned for the fourth
quarter with two core drills currently active. The results of both
the open pit and underground drilling will be incorporated into the
company's year-end mineral resource estimate as well as the
project's mine planning.
Blackwater
Consistent with the approach at Rainy River, exploration at Blackwater is primarily focused on prospective
areas closest to the current eight million ounce mineral reserve.
The company's exploration team is currently focused on four high
priority prospects, the most significant of which, Blackwater South
and the adjacent Key target, are located within three kilometres of
the southern edge of the primary Blackwater deposit. Recent drilling at these
prospects has intercepted a broad area of intrusive-hosted,
porphyry-style mineralization that locally contains significant
levels of gold, silver, copper and molybdenum. The Blackwater exploration team has established a
clear geologic link between the epithermal-style gold and silver
mineralization in the Blackwater
deposit and the porphyry-style mineralization occurring a few
kilometres to the south which underscores the potential for
additional discoveries in the immediate Blackwater area. At the same time,
reconnaissance work on the two prospects further west on the
company's broader land package, Van
Tine/Fawn and Buck, has identified epithermal-style and
deeper intrusive-related alteration, with the limited assays
received to date including localized high grade gold over narrow
widths. Though the results of the Blackwater exploration program to date have
been largely qualitative, they further support New Gold's view that
there continues to be potential for new discoveries across the
company's over 1,000 square kilometre land package at Blackwater.
Through September 30,
2014, 17 holes totaling 7,663 metres were completed with an
additional 2,600 metres planned for the fourth quarter.
Peak Mines
As in previous years, exploration at the Peak
Mines continues to primarily target the addition and upgrading of
mineral resources through infill drilling of the previously
identified underground deposits. In addition, during the third
quarter, exploration drilling near the historic Great Cobar mine,
located near the northern end of the Peak mine corridor,
intercepted a new lens of high grade copper-gold mineralization.
The new intercept was located 150 metres south of the historic
underground workings and at 600 metres depth. The exploration team
is following up with additional drilling during the fourth quarter
to test the continuity of this mineralization further to the south
and up towards surface.
In aggregate, 239 holes totaling 51,630 metres
were completed at the Peak Mines through September 30, 2014, with over 85% of this total
focused on exploration and resource delineation around the
currently producing deposits.
Webcast and Conference Call
A webcast and conference call to discuss these
results will be held on Thursday, October
30, 2014, at 9:00 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 15491035. 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 and costs; planned activities for 2014 and
beyond at 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 certain
activities at El Morro have been delayed due to litigation relating
to its environmental permit; 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 historical 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 historical 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 Total
Cash Costs and All-in Sustaining Costs Reconciliation |
|
Three months
ended |
Nine months
ended |
|
September
30, |
September
30, |
(in millions of U.S. dollars, except where noted) |
2014 |
2013 |
2014 |
2013 |
|
|
|
|
|
Operating expenses from continuing operations |
$94.2 |
$102.1 |
$288.0 |
$313.8 |
Treatment and refining charges on concentrate sales |
8.2 |
7.3 |
25.7 |
21.4 |
Adjustments(1) |
0.3 |
(0.6) |
0.8 |
(1.1) |
|
|
|
|
|
Total cash costs before by-product revenue |
102.7 |
108.8 |
314.5 |
334.1 |
By-product copper and silver sales |
(75.3) |
(82.5) |
(241.8) |
(219.3) |
|
|
|
|
|
Total cash costs net of by-product revenue |
27.4 |
26.3 |
72.7 |
114.8 |
Ounces of gold sold |
88,168 |
94,082 |
266,956 |
287,300 |
|
|
|
|
|
Total cash cost per gold ounce sold ($/ounce) |
$311 |
$280 |
$272 |
$399 |
Total cash cost per gold ounce sold - co-product basis
($/ounce)(2) |
$666 |
$686 |
$668 |
$731 |
|
|
|
|
|
Total cash costs net of by-product revenue |
27.4 |
26.3 |
72.7 |
114.8 |
Sustaining capital expenditures |
36.5 |
35.8 |
90.6 |
108.6 |
Sustaining exploration - expensed and capitalized |
2.3 |
2.1 |
8.6 |
8.6 |
Corporate G&A including share-based
compensation(3) |
7.2 |
8.7 |
25.5 |
27.1 |
Reclamation expenses |
1.3 |
0.3 |
4.0 |
1.1 |
|
|
|
|
|
Total all-in sustaining costs |
74.8 |
73.2 |
201.3 |
260.2 |
|
|
|
|
|
All-in sustaining costs per gold ounce sold
($/ounce) |
$848 |
$779 |
$754 |
$905 |
All-in sustaining costs per gold ounce sold - co-product
basis ($/ounce)(2) |
$983 |
$989 |
$951 |
$1,056 |
|
|
|
|
|
|
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 CASH GENERATED FROM OPERATIONS
BEFORE CHANGES IN WORKING CAPITAL
"Adjusted net cash generated from operations
before changes in working capital" is a non-GAAP financial measure.
Net cash generated from operations has been adjusted for one-time
charges incurred in the second quarter of 2013 related to the
settlement of the company's legacy gold hedge position and in the
third quarter of 2013 related to the company's acquisition of the
Rainy River project. There is also an adjustment to remove the
impact of the change in working capital. The company believes the
presentation of adjusted net cash generated from operations before
changes in working capital enables investors and analysts to better
understand the underlying operating performance of our core mining
business. Adjusted net cash generated from operations before
changes in working capital 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 Adjusted Net Cash from
Operations before Changes in Working Capital
Reconciliation |
|
Three months ended |
Nine months ended |
|
September 30, |
September 30, |
(in millions of U.S. dollars) |
2014 |
2013 |
2014 |
2013 |
|
|
|
|
|
Net cash generated from operations |
$58.2 |
$36.2 |
$198.9 |
$72.2 |
|
Add back: Settlement payment of gold hedge
contracts |
-- |
-- |
-- |
65.7 |
|
Add back: Payment of Rainy River acquisition
expenses |
-- |
12.9 |
-- |
12.9 |
|
Add back: Rainy River transaction costs |
-- |
4.9 |
-- |
4.9 |
|
Add back: Change in non-cash operating working
capital |
20.4 |
14.0 |
41.7 |
31.1 |
|
|
|
|
|
Adjusted Net Cash
Generated from Operations before Changes in
Working Capital |
$78.6 |
$68.0 |
$240.6 |
$186.8 |
|
|
|
|
|
(4) 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 Adjusted Net Earnings
Reconciliation |
|
Three months ended |
Nine months ended |
|
September 30, |
September 30, |
(in millions of U.S. dollars; except per share
amounts) |
2014 |
2013 |
2014 |
2013 |
|
|
|
|
|
Net earnings/(loss) before taxes |
($11.5) |
$22.5 |
$11.0 |
$90.2 |
|
Loss on foreign exchange |
23.1 |
(6.7) |
26.1 |
11.8 |
|
Unrealized loss/(gain) on share purchase
warrants |
(9.2) |
(1.6) |
(4.4) |
(44.8) |
|
Loss on hedge monetization over original term of
hedge |
6.8 |
7.0 |
20.5 |
11.7 |
|
Other |
(0.1) |
7.3 |
(0.2) |
(1.2) |
Adjusted net earnings before tax |
9.1 |
28.5 |
53.0 |
67.7 |
|
|
|
|
|
|
Income tax expense |
(48.1) |
(10.3) |
(56.2) |
(26.7) |
|
Income tax adjustments |
44.4 |
1.8 |
35.0 |
3.6 |
Adjusted income tax expense |
(3.7) |
(8.5) |
(21.2) |
(23.1) |
|
|
|
|
|
Adjusted net earnings |
$5.4 |
$20.0 |
$31.8 |
$44.6 |
Adjusted net earnings per share |
0.01 |
0.04 |
0.06 |
0.09 |
|
|
|
|
|
(5) 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 Operating Margin
Reconciliation |
|
Three months ended |
Nine months ended |
|
September 30, |
September 30, |
(in millions of U.S. dollars) |
2014 |
2013 |
2014 |
2013 |
|
|
|
|
|
Revenues |
$169.3 |
$196.0 |
$537.9 |
$581.3 |
Operating expenses |
94.2 |
102.1 |
288.0 |
313.8 |
|
|
|
|
|
Operating margin |
$75.1 |
$93.9 |
$249.9 |
$267.5 |
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED INCOME
STATEMENTS |
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
Three
months ended |
|
Nine months ended |
|
|
September 30 |
|
September 30 |
|
|
$ |
|
$ |
|
$ |
|
$ |
(In millions of U.S. dollars, except
per share amounts) |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
169.3 |
|
196.0 |
|
537.9 |
|
581.3 |
Operating expenses |
|
94.2 |
|
102.1 |
|
288.0 |
|
313.8 |
Depreciation and depletion |
|
53.7 |
|
42.7 |
|
158.0 |
|
124.7 |
Earnings from mine operations |
|
21.4 |
|
51.2 |
|
91.9 |
|
142.8 |
|
|
|
|
|
|
|
|
|
Corporate administration |
|
6.0 |
|
6.5 |
|
20.2 |
|
21.1 |
Share-based payment expenses |
|
1.5 |
|
2.2 |
|
6.0 |
|
6.5 |
Exploration and business
development |
|
5.0 |
|
12.5 |
|
12.4 |
|
28.4 |
Income from operations |
|
8.9 |
|
30.0 |
|
53.3 |
|
86.8 |
|
|
|
|
|
|
|
|
|
|
Finance income |
|
0.5 |
|
0.6 |
|
1.0 |
|
1.2 |
|
Finance costs |
|
(7.1) |
|
(9.1) |
|
(21.8) |
|
(32.0) |
|
Rainy River acquisition costs |
|
- |
|
(4.9) |
|
- |
|
(4.9) |
|
Other (losses) gains |
|
(13.8) |
|
5.9 |
|
(21.5) |
|
39.1 |
|
|
|
|
|
|
|
|
|
(Loss) earnings before taxes |
|
(11.5) |
|
22.5 |
|
11.0 |
|
90.2 |
Income tax expense |
|
(48.1) |
|
(10.3) |
|
(56.2) |
|
(26.7) |
|
|
|
|
|
|
|
|
|
Net (loss) earnings |
|
(59.6) |
|
12.2 |
|
(45.2) |
|
63.5 |
|
|
|
|
|
|
|
|
|
(Loss) earnings per share |
|
|
|
|
|
|
|
|
|
Basic |
|
(0.12) |
|
0.02 |
|
(0.09) |
|
0.13 |
|
Diluted |
|
(0.12) |
|
0.02 |
|
(0.09) |
|
0.13 |
|
|
|
|
|
|
|
|
|
Weighted average number of shares
outstanding (in millions) |
|
|
|
|
|
|
|
|
|
Basic |
|
503.9 |
|
495.3 |
|
503.7 |
|
482.9 |
|
Diluted |
|
503.9 |
|
497.9 |
|
503.7 |
|
486.0 |
CONDENSED CONSOLIDATED STATEMENTS
OF FINANCIAL POSITION |
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
September 30 |
|
December 31 |
|
|
|
|
|
$ |
|
$ |
(In millions of U.S. dollars) |
|
|
|
|
2014 |
|
2013 |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
416.1 |
|
414.4 |
|
Trade and other receivables |
|
|
|
|
32.6 |
|
19.3 |
|
Inventories |
|
|
|
|
223.4 |
|
182.0 |
|
Current income tax receivable |
|
|
|
|
20.5 |
|
31.8 |
|
Prepaid expenses and other |
|
|
|
|
5.2 |
|
10.5 |
Total current assets |
|
|
|
|
697.8 |
|
658.0 |
|
|
|
|
|
|
|
|
Investments |
|
|
|
|
0.4 |
|
0.5 |
Non-current inventories |
|
|
|
|
28.7 |
|
31.0 |
Mining interests |
|
|
|
|
3,387.6 |
|
3,336.5 |
Deferred tax assets |
|
|
|
|
132.7 |
|
171.0 |
Other |
|
|
|
|
3.5 |
|
2.0 |
Total assets |
|
|
|
|
4,250.7 |
|
4,199.0 |
|
|
|
|
|
|
|
|
Liabilities and equity |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Trade and other payables |
|
|
|
|
114.4 |
|
90.2 |
Total current liabilities |
|
|
|
|
114.4 |
|
90.2 |
|
|
|
|
|
|
|
|
Reclamation and closure cost
obligations |
|
|
|
|
65.2 |
|
61.4 |
Provisions |
|
|
|
|
10.6 |
|
9.4 |
Share purchase warrants |
|
|
|
|
21.7 |
|
27.8 |
Long-term debt |
|
|
|
|
871.9 |
|
862.5 |
Deferred tax liabilities |
|
|
|
|
426.0 |
|
381.0 |
Deferred benefit |
|
|
|
|
46.3 |
|
46.3 |
Other |
|
|
|
|
0.4 |
|
0.5 |
Total liabilities |
|
|
|
|
1,556.5 |
|
1,479.1 |
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
Common shares |
|
|
|
|
2,818.0 |
|
2,815.3 |
Contributed surplus |
|
|
|
|
94.9 |
|
90.0 |
Other reserves |
|
|
|
|
(5.7) |
|
(17.6) |
Deficit |
|
|
|
|
(213.0) |
|
(167.8) |
Total equity |
|
|
|
|
2,694.2 |
|
2,719.9 |
Total liabilities and equity |
|
|
|
|
4,250.7 |
|
4,199.0 |
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS |
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Nine months ended |
|
|
|
September 30 |
|
September 30 |
|
|
|
$ |
|
$ |
|
$ |
|
$ |
(In millions of U.S. dollars) |
|
|
2014 |
|
2013 |
|
2014 |
|
2013 |
|
|
|
|
|
|
|
|
|
|
Operating activities |
|
|
|
|
|
|
|
|
|
|
Net (loss) earnings |
|
|
(59.6) |
|
12.2 |
|
(45.2) |
|
63.5 |
|
Adjustments for: |
|
|
|
|
|
|
|
|
|
|
|
Realized losses on gold contracts |
|
|
6.8 |
|
7.0 |
|
20.5 |
|
8.2 |
|
|
Realized and unrealized foreign exchange losses
(gains) |
|
|
23.1 |
|
(6.7) |
|
26.1 |
|
11.8 |
|
|
Unrealized gains on share purchase warrants |
|
|
(9.2) |
|
(1.6) |
|
(4.4) |
|
(44.8) |
|
|
Unrealized losses on concentrate contracts |
|
|
4.1 |
|
0.3 |
|
3.4 |
|
1.3 |
|
|
Settlement payment of gold hedge contracts |
|
|
- |
|
- |
|
- |
|
(65.7) |
|
|
Payment of Rainy River acquistion expenses |
|
|
- |
|
(12.9) |
|
- |
|
(12.9) |
|
|
Reclamation and closure costs paid |
|
|
(0.3) |
|
(0.4) |
|
(0.9) |
|
(1.4) |
|
|
Loss (gain) on disposal of assets |
|
|
0.1 |
|
0.5 |
|
(0.2) |
|
1.7 |
|
|
Depreciation and depletion |
|
|
54.1 |
|
42.8 |
|
157.8 |
|
125.1 |
|
|
Equity-settled share-based payment expense |
|
|
1.3 |
|
1.9 |
|
4.5 |
|
6.1 |
|
|
Realized and unrealized losses on cash flow
hedging items |
|
|
- |
|
- |
|
- |
|
(9.5) |
|
|
Income tax expense |
|
|
48.1 |
|
10.3 |
|
56.2 |
|
26.7 |
|
|
Finance income |
|
|
(0.5) |
|
(0.6) |
|
(1.0) |
|
(1.2) |
|
|
Finance costs |
|
|
7.1 |
|
9.1 |
|
21.8 |
|
32.0 |
|
|
|
75.1 |
|
61.9 |
|
238.6 |
|
140.9 |
|
Change in non-cash operating working
capital |
|
|
(20.4) |
|
(14.0) |
|
(41.7) |
|
(31.1) |
|
|
Income taxes refunded
(paid) |
|
|
3.5 |
|
(11.7) |
|
2.0 |
|
(37.6) |
Net cash generated from
operations |
|
|
58.2 |
|
36.2 |
|
198.9 |
|
72.2 |
|
|
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
|
|
|
|
Mining interests |
|
|
(73.7) |
|
(63.7) |
|
(190.6) |
|
(201.1) |
|
Government grant received |
|
|
20.5 |
|
- |
|
20.5 |
|
- |
|
Proceeds from the sale of assets |
|
|
0.1 |
|
- |
|
0.4 |
|
- |
|
Acquisition of Rainy River (net of
cash received) |
|
|
- |
|
(107.2) |
|
- |
|
(107.2) |
|
Interest received |
|
|
0.2 |
|
0.4 |
|
0.6 |
|
0.8 |
Cash used in investing activities |
|
|
(52.9) |
|
(170.5) |
|
(169.1) |
|
(307.5) |
|
|
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
|
|
|
|
Issuance of common shares on exercise
of options and warrants |
|
|
0.4 |
|
0.8 |
|
1.4 |
|
5.2 |
|
Financing initiation costs |
|
|
(2.2) |
|
- |
|
(2.2) |
|
(0.3) |
|
Interest paid |
|
|
(0.1) |
|
- |
|
(26.2) |
|
(26.3) |
Cash (used by) generated from
financing activities |
|
|
(1.9) |
|
0.8 |
|
(27.0) |
|
(21.4) |
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on
cash and cash equivalents |
|
|
(1.3) |
|
(0.2) |
|
(1.1) |
|
(2.3) |
|
|
|
|
|
|
|
|
|
|
Change in cash and cash
equivalents |
|
|
2.1 |
|
(133.7) |
|
1.7 |
|
(259.0) |
Cash and cash equivalents, beginning
of the period |
|
|
414.0 |
|
562.5 |
|
414.4 |
|
687.8 |
Cash and cash equivalents, end of
the period |
|
|
416.1 |
|
428.8 |
|
416.1 |
|
428.8 |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents are
comprised of: |
|
|
|
|
|
|
|
|
|
|
Cash |
|
|
251.1 |
|
267.5 |
|
251.1 |
|
267.5 |
|
Short-term money market
instruments |
|
|
165.0 |
|
161.3 |
|
165.0 |
|
161.3 |
|
|
|
416.1 |
|
428.8 |
|
416.1 |
|
428.8 |
SOURCE New Gold Inc.