(All dollar figures are in US dollars unless otherwise
indicated)
TORONTO, July 27, 2016 /CNW/ - New Gold Inc. ("New Gold")
(TSX:NGD) (NYSE MKT:NGD) today announces its 2016 second quarter
results and provides an update on the construction of the company's
Rainy River project.
2016 SECOND QUARTER HIGHLIGHTS
- Gold production of 99,423 ounces increased by 15% relative to
2015 and copper production of 25.7 million pounds increased by
9%
- All-in sustaining costs(1) decreased to
$717 per ounce, including total cash
costs(2) of $334 per
ounce
- All four operations generated free cash flow during the
quarter
- Cash generated from operations before changes in non-cash
operating working capital(3) of $82 million, a 31% increase compared to
2015
- Cash generated from operations of $79
million, a 39% increase from 2015
- Adjusted net earnings(4) of $14 million, or $0.03 per share, relative to an adjusted net loss
of $1 million, or nil per share, in
2015
- Net loss of $9 million, or
$0.02 per share, compared to net
earnings of $9 million, or
$0.02 per share, in 2015
- Rainy River construction
approximately 40% complete at June 30,
2016 with $107 million in
capital expenditures during the quarter
- June 30, 2016 cash and
equivalents of $220 million
"We are proud to have delivered such strong second quarter
results," stated Randall Oliphant,
Executive Chairman. "The combination of higher production, lower
costs and improved gold prices enabled us to generate a 39%
increase in our cash flow. We are on track to meet our full-year
gold production guidance and pleased to be in a position to lower
our cost guidance. We look forward to a strong finish to the
year."
"At the same time, our Rainy
River project is moving ever closer to production. The
construction of the processing facilities and initial mining
activities are both going very well and we are making good progress
in resolving the challenge we encountered earlier this year related
to the ground conditions at the water and tailings management
facilities," added Mr. Oliphant.
CONSOLIDATED YEAR-TO-DATE OPERATIONAL RESULTS AND 2016
GUIDANCE
Consistent with the expectations the company outlined as part of
its first quarter results, gold production increased quarter over
quarter, resulting in consolidated gold production of 190,234
ounces in the first six months of 2016 which was 5% higher than the
same period of the prior year. As a result of the company's strong
first half production, New Gold is well positioned to meet its
full-year gold production guidance of 360,000 to 400,000 ounces. At
the same time, the company's first half copper production of 51.1
million pounds was higher than planned, increasing by 10% relative
to the prior-year period, and New Gold now anticipates it will
exceed the high end of its full-year copper production guidance of
81.0 to 93.0 million pounds. Consolidated full-year silver
production is expected to be at, or slightly below, the low end of
the guidance range of 1.6 to 1.8 million ounces.
For the six-month period ended June 30,
2016, New Gold's all-in sustaining costs of $736 per ounce and total cash costs of
$343 per ounce were both well below
the prior year and are tracking below the company's 2016 cost
guidance. The $233 per ounce decrease
in all-in sustaining costs relative to the first half of 2015 was
attributable to the combination of a $106 per ounce decrease in total cash costs and a
$125 per ounce, or $20 million, decrease in the company's
consolidated sustaining costs(1), which include New
Gold's cumulative sustaining capital, exploration, general and
administrative, and amortization of reclamation expenditures.
Based on New Gold's first half operating results, and assuming
current commodity prices and foreign exchange rates, the company
now expects its 2016 full-year total cash costs to be $360 to $400 per ounce, a $75 per ounce reduction from the company's
original guidance range of $435 to
$475 per ounce. As total cash costs form a component of
all-in sustaining costs, New Gold similarly expects a $75 per ounce reduction from its 2016 full-year
all-in sustaining costs to approximately $750 to $790 per ounce as compared to the
company's original guidance range of $825 to
$865 per ounce.
NEW GOLD SUMMARY OPERATIONAL
RESULTS
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Three months ended June
30
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Six months ended June
30
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2016
|
2015
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2016
|
2015
|
|
|
|
|
|
GOLD PRODUCTION (thousand
ounces)
|
|
|
|
|
New
Afton
|
25.3
|
24.4
|
50.4
|
48.3
|
Mesquite
|
25.6
|
22.5
|
52.9
|
48.2
|
Peak
Mines
|
31.3
|
14.9
|
50.9
|
34.3
|
Cerro San
Pedro
|
17.3
|
24.7
|
36.1
|
50.6
|
Total Gold
Production
|
99.4
|
86.4
|
190.2
|
181.4
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|
|
|
|
|
|
|
|
|
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Total Gold Sales (thousand
ounces)
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101.8
|
87.8
|
187.9
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180.2
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Average Realized Gold Price per
ounce(5)
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$1,267
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$1,191
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$1,239
|
$1,210
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|
|
|
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COPPER PRODUCTION (million
pounds)
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|
|
|
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New
Afton
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22.1
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19.9
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44.5
|
39.5
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Peak
Mines
|
3.6
|
3.7
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6.6
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7.1
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Total Copper
Production
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25.7
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23.6
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51.1
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46.6
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Total Copper Sales (million
pounds)
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25.2
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23.7
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50.4
|
45.8
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Average Realized Copper Price per
pound(5)
|
$2.14
|
$2.72
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$2.14
|
$2.66
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|
|
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SILVER PRODUCTION (million
ounces)
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|
|
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New
Afton
|
0.1
|
0.1
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0.1
|
0.1
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Cerro San
Pedro
|
0.2
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0.3
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0.5
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0.6
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Total Silver
Production
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0.3
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0.4
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0.7
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0.8
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Total Silver Sales (million
ounces)
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0.3
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0.4
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0.7
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0.8
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Average Realized Silver Price per
ounce(5)
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$17.39
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$16.23
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$15.96
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$16.41
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TOTAL CASH COSTS(2)($ per
ounce)
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|
|
|
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New
Afton
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($547)
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($940)
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($593)
|
($889)
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Mesquite
|
611
|
839
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618
|
867
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Peak
Mines
|
521
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1,157
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620
|
974
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Cerro San
Pedro
|
898
|
879
|
917
|
944
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Total Cash
Costs(2)
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$334
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$410
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$343
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$449
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All-IN SUSTAINING
COSTS(1)($ per
ounce)
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|
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New
Afton
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($131)
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($235)
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($198)
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($295)
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Mesquite
|
999
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1,533
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1,044
|
1,632
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Peak
Mines
|
706
|
1,549
|
827
|
1,337
|
Cerro San
Pedro
|
941
|
889
|
947
|
955
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All-in Sustaining
Costs(1)
|
$717
|
$922
|
$736
|
$969
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2016 SECOND QUARTER CONSOLIDATED OPERATIONAL RESULTS
New Gold's second quarter gold production increased by 15% to
99,423 ounces when compared to the prior-year quarter. The increase
in quarterly gold production was attributable to New Afton,
Mesquite and the Peak Mines all delivering higher production. This
was only partially offset by planned lower production from Cerro
San Pedro as the mine was in its final months of active mining.
Quarterly copper production also increased by 9% to 25.7 million
pounds when compared to the second quarter of 2015. Silver
production of 0.3 million ounces remained in line with 2015.
During the second quarter, all four of New Gold's operations
delivered production at all-in sustaining costs below $1,000 per ounce. As a result of this strong
performance, consolidated second quarter all-in sustaining costs of
$717 per ounce decreased by
$205 per ounce relative to the second
quarter of 2015. The significant decrease in all-in sustaining
costs relative to the prior-year quarter was attributable to the
combination of a $76 per ounce
decrease in total cash costs to $334
per ounce and a $129 per ounce, or
$6 million, decrease in the company's
consolidated sustaining costs. The decrease in total cash costs was
driven by the combined benefit of higher gold production, the
depreciation of the Canadian and Australian dollars and New Gold's
business improvement initiatives more than offsetting the impact of
lower by-product revenues resulting from lower realized copper
prices(5).
New Afton
Gold production at New Afton during the second quarter increased
to 25,287 ounces. The increase relative to the prior-year quarter
was due to a 16% increase in mill throughput which more than offset
a planned decrease in gold grade. Gold recoveries remained
consistent at 83% despite the significant increase in throughput.
New Afton's average mill throughput during the second quarter was
15,320 tonnes per day.
As a result of the continued strong throughput, New Afton's
quarterly copper production increased by 11% to 22.1 million pounds
when compared to the second quarter of 2015.
The $104 per ounce increase in New
Afton's all-in sustaining costs to ($131) per ounce was attributable to the impact
of lower by-product revenues only being partially offset by the
combined benefit of higher gold production, the depreciation of the
Canadian dollar relative to the U.S. dollar and a $6 million decrease in sustaining costs. New
Afton's second quarter total cash costs of ($547) per ounce were impacted by a $6 million, or $406
per ounce, decrease in by-product revenues relative to the
prior-year quarter as the benefit of higher copper sales volumes
was more than offset by the decrease in the realized price. As a
result of the depreciation of the Canadian dollar relative to the
U.S. dollar, the mine's operating costs, including mining,
processing and general and administrative costs, decreased to
$17.33 per tonne in the second
quarter relative to $18.82 per tonne
in the prior-year quarter.
New Afton's second quarter co-product cash costs were
$543 per ounce of gold and
$0.91 per pound of copper relative to
$466 per ounce and $1.06 per pound in the prior-year quarter. The
mine's second quarter co-product all-in sustaining costs were
$711 per ounce of gold and
$1.19 per pound of copper relative to
the prior-year quarterly all-in sustaining costs of $708 per ounce and $1.61 per pound.
For the six-month period ended June 30,
2016, New Afton's gold production increased to 50,355 ounces
when compared to the same period of the prior year. The increase in
production was attributable to the combination of higher throughput
and recovery more than offsetting a planned decrease in gold
grade.
Similarly, the mine's first half copper production increased by
13%, or 5.0 million pounds, to 44.5 million pounds primarily as a
result of a 15% increase in mill throughput.
For the six-month period ended June 30,
2016, New Afton's all-in sustaining costs increased by
$97 per ounce to ($198) per ounce despite an $8 million, or $348
per ounce, decrease in by-product revenues relative to the first
half of 2015 as a result of the decrease in the realized copper
price. New Afton's first half sustaining costs decreased by
$8 million to $20 million when compared to the first six months
of 2015.
New Afton's first half co-product cash costs were $516 per ounce of gold and $0.89 per pound of copper relative to
$480 per ounce and $1.04 per pound in the prior-year period. The
mine's first half co-product all-in sustaining costs of
$672 per ounce of gold and
$1.16 per pound of copper were below
the costs in the same prior-year period of $689 per ounce and $1.49 per pound.
Mesquite
Second quarter gold production at Mesquite increased by 14% to
25,564 ounces when compared to the prior-year quarter. The increase
in production was primarily attributable to a 28% increase in gold
grade which was only partially offset by a 13% decrease in ore
tonnes mined and placed on the leach pad.
Mesquite's second quarter all-in sustaining costs of
$999 per ounce and total cash costs
of $611 per ounce were both
significantly below the prior-year quarter. The mine's total cash
costs benefitted from the combination of higher gold production and
lower diesel prices. At the same time, Mesquite's quarterly
sustaining costs decreased by $3
million, or $306 per ounce, to
$12 million, which contributed to the
$534 per ounce total decrease in
all-in sustaining costs relative to the second quarter of 2015.
For the six-month period ended June 30,
2016, Mesquite's gold production increased by 10% to 52,935
ounces relative to the prior-year period. Mesquite's first half
production benefitted from increased ore tonnes mined and placed on
the leach pad as well as higher gold grade.
Mesquite's first half all-in sustaining costs of $1,044 per ounce and total cash costs of
$618 per ounce were both
significantly below the same period of the prior year. Mesquite's
first half sustaining costs decreased by $14
million, or $339 per ounce, to
$24 million, which led to a
$588 per ounce total decrease in
all-in sustaining costs relative to the six-month period ended
June 30, 2015.
Peak Mines
Second quarter gold production at the Peak Mines of 31,285
ounces was more than double that of the prior-year quarter. The
significant increase in gold production was attributable to the
combination of higher gold grade and recovery which was only
partially offset by lower throughput. Gold production in the
prior-year quarter was well below average due to the impact of
geotechnical challenges in the Peak Mines' most gold-rich ore body,
Perseverance, which limited the amount of ore that was mined and
processed from this area.
Quarterly copper production of 3.6 million pounds remained in
line with the second quarter of 2015 as the impact of the decrease
in throughput was offset by slight increases in both copper grade
and recovery.
All-in sustaining costs at the Peak Mines decreased by
$843 per ounce to $706 per ounce relative to the prior-year
quarter. The decrease in all-in sustaining costs was a result of a
$636 per ounce decrease in total cash
costs to $521 per ounce coupled with
a $207 per ounce decrease in
sustaining costs. The decrease in total cash costs was primarily
attributable to the increase in production with costs also
benefitting from the depreciation of the Australian dollar relative
to the U.S. dollar. The decrease in costs was achieved despite
by-product revenues decreasing by $4
million, or $505 per ounce,
relative to the prior-year quarter primarily as a result of the
decrease in the realized copper price.
For the six-month period ended June 30,
2016, gold production at the Peak Mines increased by 48% to
50,881 ounces relative to the prior-year period. The increase in
gold production in the first half of 2016 was driven by an increase
in gold grade and recovery for reasons consistent with those noted
above for the second quarter.
First half copper production of 6.6 million pounds was slightly
below that of the same period of the prior year as an 8% decrease
in throughput was only partially offset by 2% increase in copper
recovery while copper grade remained consistent.
All-in sustaining costs at the Peak Mines in the first half of
2016 decreased by $510 per ounce to
$827 per ounce. The decrease in
all-in sustaining costs was attributable to the combination of a
$354 per ounce decrease in total cash
costs and a $3 million, or
$156 per ounce, decrease in
sustaining costs. The decrease in total cash costs was driven by
the increase in production as well as the depreciation of the
Australian dollar relative to the U.S. dollar, which more than
offset the impact of by-product revenues decreasing by $5 million, or $251
per ounce, relative the first half of 2015 primarily as a result of
the decrease in the realized copper price.
Cerro San Pedro
Cerro San Pedro's second quarter gold production decreased to
17,287 ounces as planned. As the mine was in its final months of
active mining, the ore tonnes mined and placed on the leach pad
decreased significantly when compared to the prior-year quarter.
Cerro San Pedro finished active mining in late June and has now
transitioned to residual leaching.
Cerro San Pedro's second quarter silver production was 0.2
million ounces.
Cerro San Pedro's second quarter all-in sustaining costs of
$941 per ounce increased slightly
relative to the prior-year quarter, driven by a $19 per ounce increase in total cash costs to
$898 per ounce. The increase in total
cash costs was attributable to the lower gold production.
For the six-month period ended June 30,
2016, consistent with the company's expectations, gold
production at Cerro San Pedro decreased to 36,063 ounces as the
operation was in the final stages of active mining.
First half silver production of 0.5 million ounces remained in
line with the same period of the prior year.
All-in sustaining costs at Cerro San Pedro in the first half of
2016 decreased by $8 per ounce to
$947 per ounce. The decrease in
all-in sustaining costs was attributable to a decrease in total
cash costs resulting from a significant decrease in total tonnes
moved in the first half of 2016 relative to the same period of the
prior year.
"Our four operations had a very solid second quarter and first
half of the year," stated David
Schummer, Executive Vice President and Chief Operating
Officer. "I am very proud of our operating teams. It is as a result
of their efforts that we were able to reduce our cost guidance for
the year."
FINANCIAL RESULTS
|
|
|
|
Three months ended June
30
|
Six months ended June
30
|
(in millions of U.S. dollars, except per share
amounts)
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
Revenues
|
$180.3
|
$167.7
|
$334.8
|
$336.6
|
|
|
|
|
|
Operating
margin(6)
|
95.6
|
69.5
|
168.2
|
138.8
|
|
|
|
|
|
Adjusted net
earnings/(loss)(4)
|
13.7
|
(1.3)
|
13.4
|
(6.4)
|
Adjusted net earnings/(loss) per
share(4)
|
0.03
|
-
|
0.03
|
(0.01)
|
|
|
|
|
|
Net
earnings/(loss)
|
(8.8)
|
9.4
|
18.0
|
(34.4)
|
Net earnings/(loss) per
share
|
(0.02)
|
0.02
|
0.04
|
(0.07)
|
|
|
|
|
|
Cash generated from operations before changes in
non-cash operating working
capital(3)
|
82.4
|
62.7
|
144.5
|
130.1
|
Cash generated from
operations
|
79.2
|
56.9
|
140.7
|
126.7
|
|
|
|
|
|
Second quarter revenues of $180
million increased by $13
million, or 8%, relative to 2015 as higher gold and copper
sales volumes and a higher realized gold price more than offset a
decrease in the realized copper price. Relative to the second
quarter of 2015, the average realized price increased by
$76 per ounce of gold, or 6%, and
$1.16 per ounce of silver, or 7%,
while the average realized price of copper decreased by
$0.58 per pound, or 21%.
The company's second quarter operating margin(6)
increased by $26 million, or 38%,
relative to 2015 due the above-noted increase in revenues coupled
with a $14 million decrease in the
company's quarterly operating expenses. The decrease in operating
expenses was attributable to the combined benefit of the
depreciation of the Canadian and Australian dollars relative to the
U.S. dollar, the planned slowdown of mining activity at Cerro San
Pedro and the company's ongoing business improvement
initiatives.
New Gold had adjusted net earnings of $14
million, or $0.03 per share,
in the second quarter of 2016 relative to an adjusted net loss of
$1 million, or $nil per share, in the
prior-year quarter. The increase relative to the prior-year quarter
was primarily attributable to the increase in operating margin
noted above and an $8 million
decrease in finance costs, which were only partially offset by an
$11 million increase in depreciation
and depletion expense and a cumulative $2
million increase in share-based payment and exploration
and business development expenses. The decrease in finance costs
was driven by a greater portion of the company's interest expense
being capitalized against Rainy
River.
The company reported a net loss of $9
million, or $0.02 per share,
in the second quarter relative to net earnings of $9 million, or $0.02 per share, in the prior-year quarter. The
change was primarily due to non-cash foreign exchange movements
where the second quarter included a $5
million pre-tax foreign exchange loss while the prior-year
quarter included a $4 million pre-tax
foreign exchange gain. The second quarter of 2016 also included
non-cash pre-tax losses of $10
million on the revaluation of the gold stream obligation and
$8 million on the revaluation of the
company's gold price options contracts, both of which did not have
an impact on the prior-year quarterly earnings.
New Gold's second quarter cash generated from operations before
changes in non-cash operating working capital increased by
$20 million, or 31%, to $82 million. The increase relative to the second
quarter of 2015 was primarily attributable to the company's strong
operating performance and the higher realized gold price more than
offsetting the decrease in the realized copper price. The company's
cash generated from operations in the second quarter increased by
$22 million, or 39%, to $79 million.
For the six-month period ended June 30,
2016, revenues of $335 million
remained in line with the first half of 2015 as higher gold and
copper sales volumes and a higher realized gold price offset a
decrease in the realized copper price.
Driven by a $31 million decrease
in operating expenses, New Gold's first half operating margin
increased by 21% to $168 million.
New Gold had adjusted net earnings of $13
million, or $0.03 per share,
in the first half of 2016 relative to an adjusted net loss of
$6 million, or $0.01 per share, in the prior-year period. The
increase in earnings was attributable to the increase in operating
margin and a $14 million decrease in
finance costs, which were only partially offset by a $14 million increase in depreciation and
depletion expense and a $4 million
cumulative increase in share-based payment and exploration and
business development expenses.
The company reported net earnings of $18
million, or $0.04 per share,
in the first half relative to a net loss of $34 million, or $0.07 per share, in the first six months of 2015.
The change was primarily due to non-cash foreign exchange movements
where the first half of 2016 included a $29
million pre-tax foreign exchange gain while the prior-year
period included a $32 million pre-tax
foreign exchange loss. The 2016 first half foreign exchange gain
was offset by non-cash pre-tax losses of $26
million on the revaluation of the gold stream obligation and
$4 million on the revaluation of the
company's gold price options contracts, both of which did not have
an impact on the first half of the prior year.
For the six-month period ended June 30,
2016, New Gold's cash generated from operations before
changes in non-cash operating working capital increased by
$14 million, or 11%, to $145 million. The increase relative to the first
half of 2015 was primarily attributable to the decrease in the
company's operating expenses. The company's cash generated from
operations in the first half of 2016 increased by $14 million, or 11%, to $141 million.
FINANCIAL UPDATE
New Gold's cash and cash equivalents as at June 30, 2016 were $220
million. The company also has a $300
million revolving credit facility, of which $121 million has been used as at June 30, 2016 to issue letters of credit, with
the balance remaining undrawn. In addition, the remaining
$75 million of the stream deposit is
to be received from RGLD Gold AG, a wholly-owned subsidiary of
Royal Gold Inc., when 60% of the estimated Rainy River project development capital has
been spent and other customary conditions have been satisfied,
which is expected to be late in the third quarter or early in the
fourth quarter of 2016.
During the first quarter, New Gold announced that it had entered
into gold price option contracts. New Gold purchased put options
with a strike price of $1,200 per
ounce covering 270,000 ounces of gold and simultaneously sold call
options with a strike price of $1,400
per ounce covering an equivalent 270,000 ounces. The contracts
cover 30,000 ounces of gold per month for the nine-month period
from April through December 2016. As
the gold price traded between $1,200 and
$1,400 per ounce during the second quarter, the first three
30,000 per month contracts expired unexercised. As at the beginning
of the third quarter, there were 180,000 ounces covered by the
contracts for the balance of 2016.
At June 30, 2016, the face value
of the company's long-term debt was $800
million (book value – $789
million). The components of the debt include: $300 million of 7.00% face value senior unsecured
notes due in April 2020 and
$500 million of 6.25% face value
senior unsecured notes due in November
2022. The company currently has approximately 513 million
shares outstanding.
PROJECTS UPDATE
RAINY RIVER
Development activity at New Gold's Rainy River project, located in northwestern
Ontario, continued to advance
during the second quarter. The focus of the 2016 development
activities is the construction of the processing facilities and
supporting infrastructure as well as the initial stripping of the
open pit.
RAINY RIVER – 2016 SECOND
QUARTER PROJECT UPDATES
- Overall construction progress is currently over 40%
complete
- Plant site earthworks substantially complete
- Concrete placement over 75% complete
- Power line construction substantially complete
- Installation of mechanical, piping, electrical and
instrumentation underway in grinding building and primary
crusher
- First ball mill shell segment placed in grinding
building
- Pre-leach thickener tank 90% complete
- Leach tanks over 30% complete
- Received approval to being pumping an initial amount of
water from Pinewood river to water management facility
for storage
- Approvals to commence remediation work on water management
facilities expected in the coming weeks
- Final submission of redesigns to tailings management facility
planned for mid-August
- 225 people currently on full-time operations team with over 70%
from local communities, including over 30% from Indigenous
communities
- Material moved for mine development on target
- No Lost Time Incidents since New Gold acquired the project in
2013
Construction of the process facilities and the pre-production
mining activities are advancing well. During the second quarter,
the installation of the mechanical, piping, electrical and
instrumentation equipment started both in the grinding building and
the primary crusher and the first ball mill shell was installed.
The mine operations team moved approximately 5.0 million tonnes of
waste and overburden during the quarter, bringing the total
material moved to date to over 7.0 million tonnes. The team
continues to increase the mining rate and is now moving an average
of approximately 68,000 tonnes per day.
As previously disclosed, during the course of the construction
of the water management facility earlier in 2016, New Gold
identified areas where the strength of the foundation is less than
was estimated for the original designs. As a result, during the
second quarter, the company submitted revised construction designs
for regulatory review. Based on recent communications, New Gold
anticipates receipt of the requisite permit amendments to begin the
remediation work on the water management facility in the coming
weeks. Consistent with New Gold's previous disclosure, the
company's remediation plan includes the addition of rock toe
buttresses at the base of the water management berms. Subsequent to
the end of the second quarter, the company received approval to
begin pumping an initial amount of water from the Pinewood river to
the water management facility for storage.
The company is also finalizing its review of the tailings
management facility design, parts of which are similarly impacted
by the foundation conditions, and plans to submit its proposed
redesigns for regulatory review by mid-August. New Gold's proposed
redesign incorporates flatter slope angles and wick drains in some
areas. Construction on both the water management and tailings
facilities will recommence immediately after receiving the
respective approvals.
With construction of the processing facilities and other
components of the project on schedule, and the process of amending
the water and tailings management facilities advancing as planned,
the company continues to target first production at Rainy River in mid-2017. In support of this
schedule, New Gold continues to work with Environment and Climate
Change Canada towards obtaining a Schedule 2 Amendment, required to
deposit mine waste in certain creeks, which is targeted to be
received in mid-2017. However, the Schedule 2 Amendment is not
required to maintain the planned mid-2017 start-up, as the company
has also evaluated the potential to construct a smaller starter dam
within the broader tailings management facility. The contemplated
smaller facility would have capacity for approximately six months
of mine waste and would not require a Schedule 2
Amendment.
Project capital expenditures at Rainy
River during the second quarter totalled $107 million, bringing the total project
development capital spending through June
30, 2016 to $501 million.
Based on the development capital spent to date, and assuming a
C$1.30/US$ exchange rate on capital
expenditures going forward, the total Rainy River capital cost is expected to be
approximately $940 million. The total
capital cost estimate includes the previously announced
$35 million of additional capital
required to adjust the design of the water and tailings management
facilities.
Overall, 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 longer-term exploration potential in a great mining
jurisdiction. Rainy River is
expected to generate significant gold production growth for New
Gold at costs below the company's 2016 guidance for all-in
sustaining costs. Relative to the company's consolidated 2016 gold
production guidance of 360,000 to 400,000 ounces, Rainy River alone is expected to produce an
average of 325,000 ounces of gold annually, which will more than
offset the decrease in production and cash flow arising from the
transition of Cerro San Pedro to residual leaching. The company
looks forward to advancing the Rainy River project and providing
further updates on its development.
BLACKWATER
The company's Blackwater project, located in south-central
British Columbia, is expected to
produce an average of 485,000 ounces of gold per year at below
industry average costs. The current focus at Blackwater is
attaining the approval of the Environmental Assessment ("EA"). The
coordinated Federal and Provincial EA technical review is in
progress and New Gold is in the process of responding to the
comments received from the Federal government, Provincial agencies
and local Indigenous communities. The company continues to
anticipate approval of the Blackwater Provincial EA by early
2017.
Capital expenditures at Blackwater during the second quarter and
first half of 2016 were $3 million
and $4 million, respectively.
EL MORRO PROPERTY – 4% GOLD STREAM
As part of New Gold's 2015 sale of its 30% interest in the El
Morro property to Goldcorp Inc. ("Goldcorp"), the company retained
a 4% stream on future gold production from El Morro. The El Morro
property forms part of Goldcorp and Teck Resources Limited's
NuevaUnión project (formerly Project Corridor). A pre-feasibility
study is expected to commence for NuevaUnión in the fourth quarter
of 2016 and is expected to be completed in mid-2017. Environmental
Impact Assessment baseline studies are expected to commence in the
second half of 2016.
As at the end of 2015, 4% of the El Morro mineral reserves
represented 357,000 ounces of gold. For a detailed breakdown of
mineral reserves by category, as well as key assumptions,
parameters and risks, refer to New Gold's Annual Information Form
for the year ended December 31, 2015
filed on www.sedar.com.
WEBCAST AND CONFERENCE CALL
A webcast and conference call to discuss these results will be
held on Thursday, July 28, 2016
beginning at 9:30 a.m. Eastern time.
Participants may participate via webcast by registering on our
website at www.newgold.com. You may also listen to the conference
call by calling toll free 1-888-231-8191, or 1-647-427-7450 outside
of the U.S. and Canada. A recorded
playback of the conference call will be available until
August 28, 2016 by calling toll free
1-855-859-2056, or 1-416-849-0833 outside of the U.S. and
Canada, passcode 45491569. An
archived webcast will also be available until October 28, 2016 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 two 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 Rainy River and Blackwater projects, both in
Canada, as well as a 4% gold
stream on 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, results, outcomes 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, and the
factors contributing to those expected results, as well as expected
capital and other expenditures; planned activities for 2016 and
beyond at the Company's projects; the expected production, costs,
economics and operating parameters of the Rainy River project;
targeting timing for development and other activities related to
the Rainy River project; and statements with respect to the payment
of the remaining $75 million from
Royal Gold.
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 such
forward-looking statements are discussed in this news release, New
Gold's annual and quarterly management's discussion and analysis
("MD&A"), 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 significant 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 mineral
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) equipment,
labour and materials costs increasing on a basis consistent with
New Gold's current expectations; (7) arrangements with Indigenous
groups in respect of the Rainy River and Blackwater projects being
consistent with New Gold's current expectations; (8) all required
permits, licenses and authorizations being obtained from the
relevant governments and other relevant stakeholders within the
expected timelines; (9) the results of the feasibility study for
the Rainy River project being realized; (10) in the case of
all-in sustaining cost outlooks at the Rainy River project, the
assumed exchange rate being C$1.25/US$; and (11) conditions to the payment of
the remaining $75 million from
Royal Gold being satisfied later in
2016.
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 and the availability
and management of capital resources; additional funding
requirements; price volatility in the spot and forward markets for
metals and other commodities; fluctuations in the international
currency markets and in the rates of exchange of the currencies of
Canada, the United States, Australia and Mexico; discrepancies between actual and
estimated production, between actual and estimated mineral reserves
and mineral resources and between actual and estimated
metallurgical recoveries; changes in national and local government
legislation in Canada,
the United States, Australia and Mexico 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 Rainy River, New Afton C-zone and Blackwater
projects; and in Mexico, where
Cerro San Pedro has a history of ongoing legal challenges related
to our environmental authorization; 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; 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 the
Rainy River, New Afton C-zone and Blackwater projects; 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 Indigenous
groups; 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
process for Blackwater. 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 a SME Registered Member, AIPG Certified Professional
Geologist and a "Qualified Person" as defined under National
Instrument 43-101.
For additional technical information on New Gold's material
properties, including a detailed breakdown of Mineral Reserves and
Mineral Resources by category, as well as key assumptions,
parameters and risks, refer to New Gold's Annual Information Form
for the year ended December 31, 2015
filed on www.sedar.com.
NON-GAAP MEASURES
(1) ALL-IN SUSTAINING COSTS AND SUSTAINING COSTS
"All-in sustaining costs" per ounce is a non-GAAP financial
measure. 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 assists 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
IFRS 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 IFRS and is not necessarily indicative of cash flow from
operations under IFRS or operating costs presented under IFRS.
Further details regarding historical all-in sustaining costs and a
reconciliation to the nearest IFRS measures are provided below and
in the MD&A accompanying New Gold's financial statements filed
from time to time on www.sedar.com.
"Sustaining costs" is a non-GAAP financial measure. New Gold
defines sustaining costs as the difference between all-in
sustaining costs and total cash costs, being the sum of 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.
Management uses sustaining costs to understand the aggregate net
result of the drivers of all-in sustaining costs other than total
cash costs. The line items between cash costs and all in
sustaining costs in the tables below break down the components of
sustaining costs. Sustaining costs is intended to provide
additional information only and does not have any standardized
meaning under IFRS 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 IFRS.
(2) TOTAL CASH COSTS
"Total cash costs" per ounce is a non-GAAP financial measure which
is 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 performance and ability to generate liquidity through
operating cash flow to fund future capital expenditures and working
capital needs. 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. 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 IFRS 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
IFRS and is not necessarily indicative of cash flow from operations
under IFRS or operating costs presented under GAAP. Further details
regarding historical total cash costs and a reconciliation to the
nearest IFRS measures are provided below and in the MD&A
accompanying New Gold's financial statements filed from time to
time on www.sedar.com.
TOTAL CASH COSTS AND ALL-IN SUSTAINING COSTS
RECONCILIATION
|
|
|
|
|
|
|
|
|
|
Three months ended June
30
|
Six months ended June
30
|
(in millions of U.S. dollars, unless otherwise
noted)
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
Operating
expenses
|
$84.7
|
$98.2
|
$166.6
|
$197.8
|
Treatment and refining charges on concentrate
sales
|
3.8
|
8.5
|
7.3
|
15.9
|
Adjustments
|
0.6
|
1.0
|
(0.2)
|
1.7
|
Total cash costs before by-product
revenue
|
89.1
|
107.7
|
173.7
|
215.4
|
By-product copper and silver
sales
|
(55.1)
|
(71.7)
|
(109.3)
|
(134.5)
|
Total cash costs net of by-product
revenue
|
34.0
|
36.0
|
64.4
|
80.9
|
Gold ounces
sold
|
101,820
|
87,754
|
187,851
|
180,152
|
Total cash costs per gold ounce sold
($/ounce)
|
$334
|
$410
|
$343
|
$449
|
Total cash costs per gold ounce sold on a co-product
basis
($/ounce)
|
$609
|
$704
|
$625
|
$717
|
Total cash costs net of by-product
revenue
|
34.0
|
36.0
|
64.4
|
80.9
|
Sustaining capital
expenditure
|
27.1
|
35.7
|
49.5
|
75.0
|
Sustaining exploration -
expensed
|
1.8
|
1.2
|
4.2
|
1.6
|
Corporate G&A including share-based
compensation
|
8.7
|
7.1
|
17.4
|
15.1
|
Reclamation
expenses
|
1.3
|
0.9
|
2.4
|
2.0
|
Total all-in sustaining
costs
|
72.9
|
80.9
|
137.9
|
174.6
|
All-in sustaining costs per gold ounce sold
($/ounce)
|
$717
|
$922
|
$736
|
$969
|
All-in sustaining costs per gold ounce sold on a
co-product basis
($/ounce)
|
$871
|
$1,007
|
$885
|
$1,038
|
|
|
|
|
|
(3) CASH GENERATED FROM OPERATIONS BEFORE CHANGES IN WORKING
CAPITAL
"Cash generated from operations before changes in working capital"
is a non-GAAP financial measures with no standard meaning under
IFRS, which exclude changes in non-cash operating working capital.
Management uses this measure to evaluate the Company's ability to
generate cash from its operations before temporary working capital
changes.
CASH GENERATED FROM OPERATIONS BEFORE CHANGES IN
WORKING CAPITAL
RECONCILIATION
|
|
|
|
|
Three months ended June
30
|
Six months ended June
30
|
(in millions of U.S.
dollars)
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
Cash generated from
operations
|
$79.2
|
$56.9
|
$140.7
|
$126.7
|
|
Add back (deduct): Change
in non-cash operating working
capital
|
3.2
|
5.8
|
3.8
|
3.4
|
Cash generated from
operations before changes in non-cash working
capital
|
82.4
|
62.7
|
144.5
|
130.1
|
|
|
|
|
|
(4) ADJUSTED NET (LOSS)/EARNINGS
"Adjusted net (loss)/earnings" and "adjusted net (loss)/earnings
per share" are non-GAAP financial measures. Net (loss)/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 (loss)/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 (loss)/earnings and adjusted net (loss)/earnings per
share are intended to provide additional information only and do
not have any standardized meaning 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.
ADJUSTED NET EARNINGS
RECONCILIATION
|
|
|
|
|
|
|
|
|
|
|
Three months ended June
30
|
Six months ended June
30
|
(in millions of U.S. dollars, except per share
amounts)
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
Net (loss) earnings before
taxes
|
($3.0)
|
$10.3
|
$18.2
|
($26.7)
|
|
Other losses
(gains)
|
22.7
|
(10.5)
|
1.0
|
20.9
|
|
Inventory
write-down
|
(0.7)
|
(0.6)
|
-
|
(0.8)
|
Adjusted net earnings (loss) before
tax
|
19.0
|
(0.8)
|
19.2
|
(6.6)
|
|
Income tax
expense
|
(5.8)
|
(0.9)
|
(0.2)
|
(7.7)
|
|
Income tax
adjustments
|
0.5
|
0.4
|
(5.6)
|
7.9
|
Adjusted income tax (expense)
recovery
|
(5.3)
|
(0.5)
|
(5.8)
|
0.2
|
Adjusted net earnings
(loss)
|
13.7
|
(1.3)
|
13.4
|
(6.4)
|
Adjusted earnings (loss) per share
(basic)
|
0.03
|
-
|
0.03
|
(0.01)
|
Adjusted effective tax
rate
|
28%
|
68%
|
30%
|
(2%)
|
|
|
|
|
|
(5) AVERAGE REALIZED PRICE
"Average realized price per ounce or pound sold" is a non-GAAP
financial measure with no standard meaning under IFRS. Management
uses this measure to better understand the price realized in each
reporting period for gold, silver, and copper sales. Average
realized price 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.
(6) OPERATING MARGIN
"Operating margin" is a non-GAAP financial measure with no standard
meaning under IFRS, which management uses to evaluate the Company's
aggregated and mine-by-mine contribution to net earnings before
non-cash depreciation and depletion charges.
OPERATING MARGIN
RECONCILIATION
|
|
|
|
|
|
|
|
|
|
|
Three months ended June
30
|
Six months ended June
30
|
(in millions of U.S.
dollars)
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
Revenues
|
$180.3
|
$167.7
|
$334.8
|
$336.6
|
Less: Operating
expenses
|
(84.7)
|
(98.2)
|
(166.6)
|
(197.8)
|
Operating
margin
|
95.6
|
69.5
|
168.2
|
138.8
|
|
|
|
|
|
CONDENSED CONSOLIDATED INCOME STATEMENTS
(unaudited)
|
|
|
|
|
|
|
|
|
Three months ended
June
|
Six months ended
June
|
(in millions of U.S. dollars, except per share
amounts)
|
2016
|
2015
|
2016
|
2015
|
Revenues
|
180.3
|
167.7
|
334.8
|
336.6
|
Operating
expenses
|
84.7
|
98.2
|
166.6
|
197.8
|
Depreciation and
depletion
|
62.3
|
50.9
|
119.9
|
106.0
|
Earnings from mine
operations
|
33.3
|
18.6
|
48.3
|
32.8
|
|
|
|
|
|
Corporate
administration
|
5.9
|
5.5
|
11.6
|
11.5
|
Share-based payment
expenses
|
2.8
|
1.9
|
5.8
|
4.0
|
Exploration and business
development
|
2.0
|
1.2
|
4.5
|
2.3
|
Earnings from
operations
|
22.6
|
10.0
|
26.4
|
15.0
|
|
|
|
|
|
Finance
income
|
0.2
|
0.4
|
0.5
|
0.6
|
Finance
costs
|
(3.1)
|
(10.6)
|
(7.7)
|
(21.4)
|
Other (losses)
gains
|
(22.7)
|
10.5
|
(1.0)
|
(20.9)
|
|
|
|
|
|
(Loss) earning before
taxes
|
(3.0)
|
10.3
|
18.2
|
(26.7)
|
Income tax
expense
|
(5.8)
|
(0.9)
|
(0.2)
|
(7.7)
|
Net (loss)
earnings
|
(8.8)
|
9.4
|
18.0
|
(34.4)
|
|
|
|
|
|
(Loss) earnings per
share
|
|
|
|
|
Basic
|
(0.02)
|
0.02
|
0.04
|
(0.07)
|
Diluted
|
(0.02)
|
0.02
|
0.04
|
(0.07)
|
|
|
|
|
|
Weighted average number of shares outstanding (in
millions)
|
|
|
|
|
Basic
|
511.2
|
509.1
|
510.4
|
508.8
|
Diluted
|
511.2
|
509.8
|
511.6
|
508.8
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
(unaudited)
|
|
|
|
|
As at June
30
|
As at December
31
|
(in millions of U.S.
dollars)
|
2016
|
2015
|
ASSETS
|
|
|
Current
assets
|
|
|
Cash and cash
equivalents
|
219.5
|
335.5
|
Trade and other
receivables
|
106.0
|
109.0
|
Inventories
|
141.0
|
145.9
|
Current income tax
receivable
|
13.7
|
19.2
|
Prepaid expenses and
other
|
5.4
|
5.0
|
Total current
assets
|
485.6
|
614.6
|
|
|
|
Non-current
inventories
|
140.3
|
115.4
|
Mining
interests
|
2,966.5
|
2,803.2
|
Deferred tax
assets
|
177.7
|
138.9
|
Other
|
3.6
|
3.4
|
Total
assets
|
3,773.7
|
3,675.5
|
LIABILITIES AND
EQUITY
|
|
|
Current
liabilities
|
|
|
Trade and other
payables
|
160.0
|
141.1
|
Current income tax
payable
|
3.6
|
6.2
|
Total current
liabilities
|
163.6
|
147.3
|
|
|
|
Reclamation and closure cost
obligations
|
72.4
|
67.5
|
Gold stream
obligation
|
13.6
|
9.2
|
Provisions
|
207.3
|
147.6
|
Derivative
liabilities
|
2.1
|
2.1
|
Long-term
debt
|
788.5
|
787.6
|
Deferred tax
liabilities
|
410.0
|
414.4
|
Other
|
0.2
|
0.2
|
Total
liabilities
|
1,657.7
|
1,575.9
|
|
|
|
Equity
|
|
|
Common
shares
|
2,854.2
|
2,841.0
|
Contributed
surplus
|
100.8
|
102.3
|
Other
reserves
|
(10.7)
|
2.6
|
Deficit
|
(828.3)
|
(846.3)
|
Total
equity
|
2,116.0
|
2,099.6
|
Total liabilities and
equity
|
3,773.7
|
3,675.5
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(unaudited)
|
|
|
|
|
|
|
|
|
|
Three months ended
June
|
Six months ended
June
|
(in millions of U.S.
dollars)
|
2016
|
2015
|
2016
|
2015
|
OPERATING
ACTIVITIES
|
|
|
|
|
Net (loss)
earnings
|
(8.8)
|
9.4
|
18.0
|
(34.4)
|
Adjustments
for:
|
|
|
|
|
Foreign exchange losses
(gains)
|
4.9
|
(4.2)
|
(29.0)
|
31.8
|
Reclamation and closure costs
paid
|
-
|
(0.1)
|
(0.9)
|
(0.2)
|
Depreciation and
depletion
|
62.6
|
50.7
|
120.2
|
105.8
|
Other non-cash
adjustments
|
6.0
|
(0.6)
|
4.8
|
(5.2)
|
Income tax
expense
|
5.8
|
0.9
|
0.2
|
7.7
|
Finance
income
|
(0.2)
|
(0.4)
|
(0.5)
|
(0.6)
|
Finance
costs
|
3.1
|
10.6
|
7.7
|
21.4
|
Unrealized loss on gold stream
liability
|
10.4
|
-
|
25.5
|
-
|
|
83.8
|
66.3
|
146.0
|
126.3
|
Change in non-cash operating working
capital
|
(3.2)
|
(5.8)
|
(3.8)
|
(3.4)
|
Income taxes (paid)
refunded
|
(1.4)
|
(3.6)
|
(1.5)
|
3.8
|
Cash generated from
operations
|
79.2
|
56.9
|
140.7
|
126.7
|
INVESTING
ACTIVITIES
|
|
|
|
|
Mining
interests
|
(138.2)
|
(73.9)
|
(245.6)
|
(143.1)
|
Government grant
received
|
-
|
-
|
-
|
0.8
|
Proceeds from the sale of
assets
|
-
|
-
|
(2.1)
|
-
|
Gold price option contract investment
costs
|
0.6
|
0.6
|
1.1
|
0.6
|
Interest
received
|
0.2
|
0.4
|
0.5
|
-
|
Cash used by investing
activities
|
(137.4)
|
(72.9)
|
(246.1)
|
(141.7)
|
|
|
|
|
|
FINANCING
ACTIVITY
|
|
|
|
|
Proceeds received from exercise of options and
warrants
|
6.4
|
-
|
7.2
|
0.1
|
Financing initiation
costs
|
-
|
-
|
(0.3)
|
-
|
Interest
paid
|
(26.7)
|
(26.1)
|
(27.5)
|
(26.1)
|
Cash used by financing
activities
|
(20.3)
|
(26.1)
|
(20.6)
|
(26.0)
|
Effect of exchange rate changes on cash and cash
equivalents
|
(0.3)
|
3.1
|
10.0
|
(2.7)
|
|
|
|
|
|
Change in cash and cash
equivalents
|
(78.8)
|
(39.0)
|
(116.0)
|
(43.7)
|
Cash and cash equivalents, beginning of
period
|
298.3
|
365.8
|
335.5
|
370.5
|
Cash and cash equivalents, end of
period
|
219.5
|
326.8
|
219.5
|
326.8
|
|
|
|
|
|
Cash and cash equivalents are comprised
of:
|
|
|
|
|
Cash
|
154.2
|
232.8
|
154.2
|
232.8
|
Short-term money market
instruments
|
65.3
|
94.0
|
65.3
|
94.0
|
|
219.5
|
326.8
|
219.5
|
326.8
|
SOURCE New Gold Inc.