UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
6-K
REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of October 2018.
Commission File Number 001-31722
New
Gold Inc.
Suite 3510 – 181 Bay Street
Toronto, Ontario M5J 2T3
Canada
(Address of principal executive office)
Indicate
by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F
☐ Form 40-F ☒
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Note:
Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual
report to security holders.
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Note:
Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other
document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the
registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules
of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is
not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing
a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
DOCUMENTS
FILED AS PART OF THIS FORM 6-K
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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NEW GOLD INC. |
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By: |
/s/
Lisa Damiani |
|
| Date: October 24,
2018 |
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Lisa Damiani
General Counsel, Vice President, Government Relations and
Corporate Secretary
|
Exhibit 99.1
New Gold Announces
2018 Third Quarter Results
Rainy River Reports
Improved Productivity in September
(All dollar figures are in US dollars unless
otherwise indicated)
TORONTO, Oct. 24, 2018 /CNW/ - New Gold
Inc. ("New Gold" or the "Company") (TSX:NGD) (NYSE American:NGD) today announces its 2018 third quarter results.
Unless otherwise noted, all operating and financial results have been presented on a continuing basis and exclude the Mesquite
Mine and Peak Mines, which have been classified as discontinued operations.
(For detailed information, please refer
to the Company's Third Quarter Management's Discussion and Analysis and Financial Statements that are available on the Company's
website at www.newgold.com and on SEDAR at www.sedar.com. The Company uses certain non-GAAP financial performance measures throughout
this news release. Please refer to the "Non-GAAP Financial Performance Measures" section of this news release.)
2018 Third Quarter Highlights
- Appointed Mr. Renaud Adams as President and CEO effective
September 12, 2018
- Appointed Mr. James Gowans to the Board of Directors effective
July 8, 2018
- Announced the sale of the Mesquite Mine for gross proceeds
of $158 million, subject to closing adjustments, expected to close during the fourth quarter
- Gold production from total operations of 114,025 ounces and
copper production of 21.7 million pounds
- Operating expense from continuing operations of $644 per
gold ounce and $1.57 per copper pound
- All-in sustaining costs from total operations(1) of $966
per ounce, including total cash costs(2) of $424 per ounce
- Revenues of $147 million from continuing operations
- Operating cash flows of $51 million, or $0.09 per share
- Operating cash flows before changes in non-cash operating
working capital of $83 million, or $0.14 per share
- Loss from continuing operations of $2 million, or $0.00
per share
- Net loss of $166 million, or $0.29 per share, including
an impairment loss, net of tax of $162 million, relating to the sale of the Mesquite Mine
- September 30, 2018 total liquidity of $253 million, including
cash and cash equivalents of $129 million, prior to the receipt of Mesquite sale proceeds
"The third quarter included many positive
changes for New Gold that will help reposition the Company as a leading, Canadian-focused intermediate gold producer. We strengthened
the technical experience of the Board and senior executive team and announced the sale of the Mesquite Mine, which improves our
cash position, secures the liquidity to complete the ramp-up of Rainy River, and allows us to focus exclusively on our two producing
assets, Rainy River and New Afton, and unlocking value for our Blackwater project," stated Renaud Adams, President and Chief
Executive Officer. "The fourth quarter will be a pivotal quarter for New Gold as we advance a short-term operational plan
at Rainy River to reposition this core operation for long-term success. We are confident that additional productivity improvements
will be realized during the fourth quarter. Our New Afton Mine continues to deliver solid and consistent results, and we are currently
evaluating alternative scenarios to advance the development of the C-zone beginning in early 2019. We will launch exploration
programs at both assets as we seek to achieve organic growth opportunities by expanding our resource base."
2018 Third Quarter and Year-To-Date Financial
Results
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|
|
| |
Three months ended September 30 |
Nine months ended September 30 |
(in millions of U.S. dollars,
except per share amounts) |
2018 |
2017 |
2018 |
2017 |
| CONTINUING OPERATIONS(i) |
|
|
|
|
| Revenues |
147.1 |
93.0 |
447.1 |
265.2 |
| Operating margin(6) |
64.5 |
51.6 |
197.6 |
143.0 |
| Asset impairment, net of tax |
- |
- |
282.1 |
- |
| (Loss) earnings from continuing operations |
(1.6) |
26.7 |
(343.1) |
68.9 |
| Earnings (loss) from continuing operations per share (basic) |
(0.00) |
0.05 |
(0.59) |
0.12 |
| Adjusted (loss) earnings from continuing operations |
(4.6) |
2.6 |
(33.3) |
(0.1) |
| Adjusted (loss) earnings per share from continuing operations |
(0.01) |
0.00 |
(0.06) |
(0.00) |
| Operating cash flows generated from continuing operations |
43.2 |
54.8 |
135.2 |
138.8 |
Operating cash flows generated from continuing operations before changes in
non-cash operating working capital |
69.7 |
45.6 |
189.8 |
114.3 |
| TOTAL OPERATIONS (includes Mesquite and Peak Mines) |
|
|
|
| |
|
|
| Net (loss) earnings |
(165.8) |
27.0 |
(497.3) |
87.6 |
| Net (loss) earnings per share (basic) |
(0.29) |
0.05 |
(0.86) |
0.16 |
| Cash generated from operations |
51.1 |
66.0 |
182.1 |
223.4 |
| i. Continuing operations include the Rainy River, New Afton and Cerro San Pedro Mines. |
Third Quarter Financial Highlights - Continuing
Operations
- Revenues for the quarter from continuing operations increased
by $54 million, or 58%, relative to the prior-year period, due to higher gold sales volumes which offset lower gold prices. Relative
to the prior-year period, gold sales increased by 169%, attributable to the start-up of Rainy River.
- The average realized gold price for the quarter decreased
by $85 per ounce, or 7%, and the average realized copper price for the quarter increased by $0.15 per pound, or 5%, relative to
the prior-year quarter, which was only partially offset by a 6% decrease in copper sales at New Afton.
- Operating margin for the quarter increased by $13 million
relative to the prior-year period, driven by the higher gold sales volumes, which were partially offset by higher operating expenses
as well as a heap leach inventory and net realizable value inventory write-down of $12 million at Cerro San Pedro as the mine moved
to reclamation activities.
- The Company reported a loss from continuing operations
of $2 million, or $0.00 per share in the quarter, a decrease relative to earnings of $27 million, or $0.05 per share, in the prior-year
period. The third quarter loss from continuing operations included the net impact of finance costs of $18 million, an $11 million
pre-tax foreign exchange gain, and a $5 million gain on the revaluation of the gold stream obligation, while the prior-year period
included a $31 million pre-tax foreign exchange gain.
- New Gold had an adjusted net loss from continuing operations
of $5 million, or $0.01 per basic share, in the third quarter of 2018 relative to adjusted earnings of $3 million, or $0.01 per
basic share in the prior-year quarter. Quarterly adjusted loss from continuing operations included the net impact of a $16 million
increase in finance costs as the Company ceased capitalization of interest to its qualifying development property due to the commencement
of commercial production at Rainy River, a $20 million increase in depreciation and depletion expenses, partially offset by a $23
million increase in operating margin and a decrease of $6 million in exploration, business development, and corporate general and
administrative expenses.
- Operating cash flows generated from continuing operations
for the quarter, before changes in non-cash operating working capital of $70 million, was $24 million, or 53%, higher than the
prior-year period due to the increase in operating margin and a reduction in exploration and corporate general and administrative
expenses. Operating cash flows generated from continuing operations for the quarter were lower than the prior-year period due to
the increase in stockpile inventory at Rainy River.
Year-to-Date Financial Highlights - Continuing
Operations
- Revenues for the period from continuing operations increased
by $182 million, or 69%, relative to the prior-year period, due to higher gold sales volumes and higher copper prices. Relative
to the prior-year period, gold sales increased by 147%, attributable to the start-up of Rainy River.
- The average realized gold price for the period decreased
by $10 per ounce, or 1%, and the average realized copper price for the quarter increased by $0.44 per pound, or 17%, relative to
the prior-year period.
- Operating margin for the period increased by $55 million
relative to the prior-year period driven by higher gold sales volumes and higher copper prices, which was partially offset by higher
operating expenses.
- During the second quarter of 2018, the Company completed
an updated Rainy River life-of-mine plan, and in early August 2018 an updated National Instrument 43-101 Technical Report for Rainy
River was released. The updated life-of-mine plan contains updated per unit costs, changes to the sequencing in gold production
and a less than 3% reduction in gold production over the life-of-mine. The updated life-of-mine plan incorporates changes to open
pit design and extraction sequencing, resulting in higher ore tonnes mined and processed at a lower average gold grade. As a result
of the updated life-of-mine plan and the associated revision of Rainy River's 2018 outlook, the Company reported an impairment
loss, net of tax, of $282 million in the second quarter of 2018.
- The Company reported a
loss from continuing operations of $343 million, or $0.59 per share, for the period relative to earnings from continuing operations
of $69 million, or $0.12 per share, in the prior-year period. The loss from continuing operations included the net impact of the
after-tax impairment
charge of $282 million relating to Rainy River, finance costs of $52 million, a $14 million gain on the revaluation of the gold
stream obligation, a $7 million gain on the revaluation of copper price option contracts, a $17 million pre-tax foreign exchange
loss, and a $2 million restructuring charge, while the prior-year period included a $53 million pre-tax foreign exchange gain and
a $33 million gain on the sale of the El Morro stream.
- New Gold had an adjusted loss from continuing operations
of $33 million, or $0.06 per basic share, in the period relative to $0.1 million, or $0.00 per basic share in the prior-year period.
Adjusted net loss from continuing operations included the net impact of a $71 million increase in depreciation and depletion expenses,
and a $48 million increase in finance costs, as the Company ceased capitalization of interest to its qualifying development property
due to the commencement of commercial production at Rainy River, partially offset by a $65 million increase in operating margin,
a $13 million decrease in exploration, business development, and corporate general and administrative expenses, and an $8 million
increase in income tax recovery.
- Operating cash flows generated from continuing operations
for the period, before changes in non-cash operating working capital of $190 million, was $75 million, or 66%, higher than the
prior-year period due to the increase in operating margin. Operating cash flows generated from continuing operations for the period
were consistent with the prior-year period, as the increase in operating margin was offset in the prior-year period by the receipt
of an outstanding concentrate receivable of $21 million at New Afton, and in the current period by an increase in working capital
associated with the increase in stockpile inventory at Rainy River.
Third Quarter Financial Highlights - Total
Operations (including Mesquite and Peak Mines)
- For total operations, a net loss of $166 million, or $0.29
per share, was reported for the quarter. The decrease in net earnings relative to earnings from continuing operations relates to
an after-tax impairment loss of $162 million on the classification of Mesquite as an asset held for sale.
- Cash generated from total operations of $51 million for
the quarter was lower than the prior-year period due to the increase in stockpile inventory at Rainy River and the prior-year year
period including Peak Mines, which was sold early in the second quarter of 2018.
Year-to-Date Financial Highlights - Total
Operations (including Mesquite and Peak Mines)
- The Company reported a net loss of $497 million, or $0.86
per share for the period. The decrease in net earnings relative to earnings from continuing operations primarily relates to the
after-tax impairment loss of $162 million on the classification of Mesquite as an asset held for sale.
- Cash generated from operations for the nine-month period
of $182 million, was lower than the prior-year period, primarily due to the receipt of an outstanding concentrate receivable of
$21 million at New Afton in the prior-year period and an increase in working capital associated with the increase in stockpile
inventory at Rainy River which was only partially offset by the increase in operating margin. The prior-year period also included
Peak Mines, which was sold early in the second quarter of 2018.
2018 Third Quarter and Year-To-Date Operational
Results
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Three months ended September 30 |
Nine months ended September 30 |
(in millions of U.S. dollars,
except per share amounts) |
2018 |
2017 |
2018 |
2017 |
| CONTINUING OPERATIONS(i) |
|
|
|
|
| Gold (ounces): |
|
|
|
|
| |
Produced |
77,533 |
29,520 |
218,055 |
90,939 |
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Sold |
76,653 |
28,479 |
213,581 |
86,484 |
| Copper (millions of pounds): |
|
|
|
|
| |
Produced |
21.7 |
22.8 |
64.3 |
66.0 |
| |
Sold |
20.5 |
21.8 |
61.4 |
62.5 |
| Silver (millions of ounces): |
|
|
|
|
| |
Produced |
0.2 |
0.2 |
0.5 |
0.7 |
| |
Sold |
0.2 |
0.2 |
0.5 |
0.7 |
| Revenue |
|
|
|
|
| |
Gold ($/ounce) |
1,179 |
1,205 |
1,246 |
1,203 |
| |
Copper ($/pound) |
2.67 |
2.53 |
2.81 |
240 |
| |
Silver ($/ounce) |
13.69 |
16.05 |
15.31 |
16.62 |
| Average realized price(5) |
|
|
|
| |
Gold ($/ounce) |
1,205 |
1,290 |
1,275 |
1,285 |
| |
Copper ($/pound) |
2.93 |
2.78 |
3.08 |
2.64 |
| |
Silver ($/ounce) |
14.30 |
16.55 |
15.89 |
17.10 |
| Operating expense |
|
|
|
| |
Gold ($/ounce) |
644 |
527 |
677 |
546 |
| |
Copper ($/pound) |
1.57 |
1.14 |
1.64 |
1.12 |
| |
Silver ($/ounce) |
7.64 |
6.79 |
8.43 |
7.12 |
| Total cash costs ($/ounce) |
239 |
(535) |
303 |
(378) |
| All-in sustaining costs ($/ounce) |
984 |
264 |
1,069 |
358 |
| |
|
|
|
| TOTAL OPERATIONS (includes Mesquite and Peak Mines) |
|
|
|
| Gold (ounces): |
|
|
|
|
| |
Produced |
114,025 |
82,027 |
344,890 |
296,521 |
| |
Sold |
112,058 |
79,904 |
338,145 |
286,019 |
| Copper (millions of pounds): |
|
|
|
|
| |
Produced |
21.7 |
26.0 |
68.7 |
76.2 |
| |
Sold |
20.5 |
24.5 |
66.2 |
71.7 |
| Silver (millions of ounces): |
|
|
|
|
| |
Produced |
0.2 |
0.3 |
0.6 |
0.9 |
| |
Sold |
0.2 |
0.3 |
0.6 |
0.8 |
| Total cash costs ($/ounce) |
424 |
339 |
455 |
332 |
| All-in sustaining costs ($/ounce) |
966 |
792 |
984 |
706 |
| i. |
Continuing operations include the Rainy River, New Afton and Cerro San Pedro Mines. |
Third Quarter Operational Highlights
- Third quarter gold production of 114,025 ounces (including
36,492 ounces from Mesquite) was higher than the prior-year period primarily due to additional ounces from Rainy River that more
than offset the planned lower production at New Afton, Mesquite and Cerro San Pedro. Copper production of 21.7 million pounds and
silver production of 0.2 million ounces for the quarter was lower than the prior-year period, consistent with planned lower copper
and silver production in 2018.
- Operating expense per gold ounce for the quarter from continuing
operations of $644 increased relative to the prior-year period mainly due to planned higher operating expenses at Rainy River and
the impact of a heap leach inventory and net realizable value write-down at Cerro San Pedro.
- All-in sustaining costs for the quarter from continuing
operations were $984 per ounce, including total cash costs of $239 per ounce. All-in sustaining costs from all operations were
$966 per ounce, including total cash costs of $424 per ounce. The increase in all-in sustaining costs from all operations relative
to the prior-year period was attributable to the combined impact of an $85 per ounce increase in total cash costs and a $25 million
increase in the Company's consolidated sustaining costs, which include sustaining capital, exploration, general and administrative,
and amortization of reclamation expenditures. The increase in consolidated total cash costs was primarily driven by higher per
ounce operating costs at Rainy River. The increase in consolidated sustaining costs was primarily related to Rainy River sustaining
capital expenditures as construction of certain infrastructure continued in the quarter.
Year-to-Date Operational Highlights
- For the nine-month period, gold production of 344,890 ounces
(including 101,402 ounces from Mesquite and 25,432 ounces from Peak) was significantly higher than the prior-year period as additional
ounces from Rainy River more than offset the planned lower production at New Afton, Mesquite and Cerro San Pedro. Copper production
of 68.7 million pounds (including 4.4 million pounds from Peak) and silver production of 0.6 million ounces (including 0.1 million
ounces from Peak) were lower than the prior-year period, consistent with planned lower copper and silver production in 2018.
- Operating expense per gold ounce of $677 for the period
from continuing operations increased relative to the prior-year period mainly due to planned higher operating expenses at Rainy
River in its first nine months of operations.
- All-in sustaining costs from continuing operations were
$1,069 per ounce for the period, including total cash costs of $303 per ounce. All-in sustaining costs from all operations were
$984 per ounce, including total cash costs of $455 per ounce. The increase in consolidated total cash costs was primarily driven
by higher per ounce operating costs at Rainy River. The increase in consolidated sustaining costs was primarily related to sustaining
capital expenditures at Rainy River incurred during its first full year of operations.
Rainy River
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Three months ended September 30 |
Nine months ended September 30 |
| |
2018 |
2017 |
2018 |
2017 |
| Operating information |
|
|
|
|
| Gold (ounces): |
|
|
|
|
| |
Produced |
55,538 |
- |
150,082 |
- |
| |
Sold |
55,968 |
- |
148,680 |
- |
| Silver (ounces): |
|
|
|
|
| |
Produced |
59,643 |
- |
174,858 |
- |
| |
Sold |
61,708 |
- |
176,385 |
- |
| Operating expense: |
|
|
|
|
| |
Gold ($/ounce) |
760 |
- |
905 |
- |
| |
Silver ($/ounce) |
9.40 |
- |
11.41 |
- |
| All-in sustaining costs ($/ounce) |
1,546 |
- |
1,700 |
- |
| All-in sustaining costs on a co-product basis: |
| |
Gold ($/ounce) |
1,541 |
- |
1,694 |
- |
| |
Silver ($/ounce) |
19.07 |
- |
21.35 |
- |
| Rainy River Operational Metrics |
| |
Q4 2017 |
Q1 2018 |
Q2 2018 |
Q3 2018 |
Sept. 2018 |
|
Tonnes mined per day
(ore and waste) |
111,820 |
112,432 |
107,416 |
102,290 |
110,248 |
| Ore tonnes mined per day |
29,639 |
36,296 |
36,043 |
30,439 |
23,085 |
| Strip Ratio (waste:ore) |
2.77 |
2.10 |
1.98 |
2.36 |
3.78 |
| Tonnes milled per day |
16,022 |
17,534 |
16,549 |
16,962 |
20,462 |
| Gold grade milled (g/t) |
0.94 |
1.08 |
1.24 |
1.21 |
1.32 |
| Gold recovery (%) |
86.1 |
81.0 |
87.0 |
87.0 |
89.0 |
| Mill availability (%) |
N/A |
77 |
74 |
76 |
90 |
| Production |
28,509 |
39,325 |
55,219 |
55,538 |
25,517 |
- During the quarter, overall operational performance at
Rainy River improved, particularly following the completion of a five-day mill shutdown in late August. During the shutdown, the
work completed included a Semi-Autogenous Grinding (SAG) mill reline, modifications to the elution circuit and the replacement
of carbon elution circuit screens. Immediately following the upgrade, mill availability, processing rates and metal recoveries
improved and supported the best-ever monthly performance in September.
- During the quarter, the mill facility processed 1.6 million
tonnes, or 16,962 tonnes per day, at a grade of 1.21 grams per tonne, with recoveries of 87%. Following the mill upgrade, mill
availability increased to average approximately 90% in September. Supported by the improved availability of the mill facility,
September processing rates increased to average 20,462 tonnes per day, at a gold recovery rate of 89%.
- Production for the quarter was 55,538 gold ounces, which
included the five days related to the mill shutdown in August. Following the completion of the modifications, mill performance
improved, which supported solid monthly production of 25,517 gold ounces in September. The operation is on track to meet the low
end of the revised 2018 production guidance.
- Operating expense for the quarter was $760 per ounce. Operating
expense per ounce is expected to exceed revised 2018 guidance estimates due to the impact of unplanned maintenance costs related
to the mill facility. Operating expense is expected to decline in the coming quarters, as operational performance improves.
- All-in sustaining costs for the quarter were $1,546 per
ounce, and are expected to be within revised 2018 annual guidance estimates. It is expected that all-in sustaining costs will continue
to decline, corresponding with the planned productivity improvements and the completion of construction activities.
- During the quarter, the open pit mined approximately 9.4
million tonnes of ore and waste (102,290 tonnes per day).
- Reconciliation of tonnes and grades from blast hole samples
in the quarter were in line with the resource model. Optimization of mining practices to reduce overall mine dilution continued
during the quarter.
- At the end of the quarter, approximately 3.4 million tonnes
of medium grade and 2.9 million tonnes of lower grade ore, at grades of 0.73 and 0.46 grams per tonne respectively, was stockpiled
ahead of the mill facility for future processing.
Rainy River: The Operational Plan Forward
The Company has launched a near-term operational
plan that will focus on creating a culture of continuous improvement to drive operational efficiencies. The plan is focused on
optimizing mine practices, enhancing grade control procedures, and further improving mill availability and gold recoveries.
- During the fourth quarter, ongoing efforts will primarily
focus on improving mine and mill productivity.
- Concurrently, the Company will maintain a diligent focus
on optimizing capital allocation strategies and has undertaken a comprehensive review of all key cost drivers that could support
improved cost efficiencies as well as procurement practices.
- A key component of the Company's strategic operating plan
is to expand the technical and operational capacity of the Rainy River team.
- During the fourth quarter, the Company will assess the
potential launch of an exploration program in 2019 that has the overall objective of increasing mineral resources and potentially
extending the mine life over the near and longer terms.
New Afton
| |
|
|
| |
Three months ended September 30 |
Nine months ended September 30 |
| |
2018 |
2017 |
2018 |
2017 |
| Operating information |
|
|
|
|
| Gold (ounces): |
|
|
|
|
| |
Produced |
19,916 |
21,569 |
58,551 |
63,779 |
| |
Sold |
18,883 |
20,646 |
55,313 |
60,935 |
| Copper (millions of pounds): |
|
|
|
|
| |
Produced |
21.7 |
22.8 |
64.3 |
66.0 |
| |
Sold |
20.5 |
21.8 |
61.4 |
62.5 |
| Operating expense: |
|
|
|
|
| |
Gold ($/ounce) |
342 |
407 |
387 |
430 |
| |
Copper ($/pound) |
0.84 |
0.88 |
0.94 |
0.88 |
| All-in sustaining costs ($/ounce) |
(1,057) |
(643) |
(1,097) |
(505) |
| All-in sustaining costs on a co-product basis: |
| |
Gold ($/ounce) |
588 |
709 |
640 |
718 |
| |
Copper ($/pound) |
1.44 |
1.53 |
1.55 |
1.47 |
| New Afton Operational Metrics |
| |
Q4 2017 |
Q1 2018 |
Q2 2018 |
Q3 2018 |
| Tonnes mined per day |
19,436 |
16,751 |
13,654 |
17,105 |
| Tonnes milled per day |
16,121 |
14,333 |
14,804 |
14,518 |
| Gold grade (g/t) |
0.58 |
0.57 |
0.50 |
0.55 |
| Gold recovery (%) |
80.8 |
84.1 |
85.5 |
84.7 |
| Gold Production |
22,384 |
19,998 |
18,637 |
19,916 |
| Copper grade (%) |
93.0 |
94.0 |
82.0 |
89.0 |
| Copper recovery (%) |
80.9 |
83.2 |
83.8 |
83.0 |
| Copper Production (Mlbs) |
24.6 |
22.2 |
20.4 |
21.7 |
- The New Afton Mine delivered another quarter of solid,
low-cost production and free cash flow generation. The positive results over the first nine months of the year have positioned
the asset to meet, or exceed, 2018 production and cost guidance.
- Production for the quarter was 19,196 gold ounces and 21.7
million pounds of copper, on track to meet, or exceed, the high-end of 2018 production guidance.
- Operating expense for the quarter was $342 per gold ounce
and $0.84 per pound of copper. Operating expense for both gold and copper continue to trend below 2018 guidance levels.
- All-in sustaining costs for the quarter were ($1,057) per
gold ounce, trending lower than 2018 guidance estimates.
- During the fourth quarter, the Company will evaluate various
scenarios to advance an internally funded development strategy for the C-zone, which could extend the mine life of this asset.
A decision is anticipated in late 2018 with development activities beginning in early 2019.
- A two-stage project is currently underway to increase copper
recoveries from supergene ore, which is anticipated to become part of the mill feed in 2019 to 2022, peaking at approximately 40%
of total mill feed in 2020. Commissioning of a gravity recovery circuit with pressure jigs and a magnetic separator is scheduled
for the fourth quarter, and a Knelson concentrator is anticipated to be commissioned in the third quarter of 2019.
- During the fourth quarter, the Company will assess the
potential launch of an exploration program in 2019 that has the overall objective of increasing mineral resources and extending
the mine life over the medium and longer terms.
Cerro San Pedro
| |
|
|
| |
Three months ended September 30 |
Nine months ended September 30 |
| |
2018 |
2017 |
2018 |
2017 |
| Operating information |
|
|
|
|
| Gold (ounces): |
|
|
|
|
| |
Produced |
2,079 |
7,951 |
9,422 |
27,160 |
| |
Sold |
1,802 |
7,833 |
9,587 |
25,549 |
| Silver (millions of ounces): |
|
|
|
|
| |
Produced |
0.1 |
0.1 |
0.1 |
0.5 |
| |
Sold |
0.1 |
0.1 |
0.1 |
0.5 |
| Operating expense: |
|
|
|
|
| |
Gold ($/ounce) |
7,715 |
1,388 |
2,950 |
1,260 |
| |
Silver ($/ounce) |
95.81 |
18.10 |
37.31 |
16.86 |
| All-in sustaining costs ($/ounce) |
3,287 |
1,532 |
2,258 |
1,389 |
- Cerro San Pedro finished active mining late in the second
quarter of 2016 and transitioned to residual leaching. The Company has discontinued the addition of cyanide to the heap leach pad
and a staged closure process is underway.
Discontinued Operations
Mesquite
| |
|
|
| |
Three months ended September 30 |
Nine months ended September 30 |
| |
2018 |
2017 |
2018 |
2017 |
| Operating information |
|
|
|
|
| Gold (ounces): |
|
|
|
|
| |
Produced |
36,492 |
38,133 |
101,402 |
116,720 |
| |
Sold |
35,405 |
38,573 |
103,089 |
114,188 |
| Operating expense: |
|
|
|
|
| |
Gold ($/ounce) |
826 |
750 |
830 |
717 |
| All-in sustaining costs ($/ounce) |
927 |
866 |
886 |
809 |
- On September 19, 2018, the Company announced the strategic
sale of the Mesquite Mine to Equinox Gold Corp. for gross cash proceeds of $158 million, subject to closing adjustments, and results
are presented as discontinued operations. The transaction is expected to close during the fourth quarter.
Financial Update
New Gold's $400 million revolving credit facility
is currently secured by the New Afton and Mesquite mines. Upon closure of the Mesquite sale and the receipt of the anticipated
proceeds, Rainy River will be added as security to replace Mesquite in order to maintain the facility at $400 million and extend
it by one year to August 2021. Until the Rainy River security is perfected, which is expected to occur by 2019 (assuming the
sale closes in the coming weeks), the credit facility will be limited to a maximum draw of $225 million. The Company expects
to direct approximately $60 million of the Mesquite sale proceeds to reduce the outstanding balance on the revolving credit facility
and intends to retain approximately $100 million of the proceeds in cash.
At September 30, 2018, the face value of the
Company's long-term debt was $960 million (book value – $940 million). The components of the long-term debt include: $500
million of 6.25% face value senior unsecured notes due in November of 2022; $300 million of 6.375% face value senior unsecured
notes due in May of 2025; and $160 million drawn from the revolving credit facility. The Company currently has approximately 579
million shares outstanding.
Projects Update
Blackwater
Internal trade-off studies to potentially optimize
and enhance project economics of the Blackwater project are currently underway. Concurrently, activities continue to focus on attaining
the approval of the Environmental Assessment ("EA"), which is anticipated to be received in 2019.
Capital expenditures at Blackwater during the
third quarter and year-to-date were $2 million and $6 million, respectively.
Conference Call and Webcast Details
| Date: |
Thursday, October 25, 2018 |
| Time: |
10:00 a.m. Eastern Time |
| Dial in: |
North America: 1-888-231-8191, International: 1-647-427-7450 |
| Webcast: |
https://event.on24.com/wcc/r/1852623/BAD4CACA14493316D3FDFA5882CBEB76 |
| Replay: |
North America: 1-855-859-2056, International: 1-416-849-0833 |
| Passcode: |
4183034 |
The conference call replay will be available
until November 25, 2018. An archived webcast will also be available until January 26, 2019 at www.newgold.com.
About New Gold Inc.
New Gold is a Canadian-focused intermediate
gold mining company. The Company has a portfolio of four producing assets in top-rated jurisdictions. The New Afton and Rainy River
Mines in Canada, the Mesquite Mine in the United States and the Cerro San Pedro Mine in Mexico (which transitioned to residual
leaching in 2016), provide the Company with its current production base. In addition, New Gold owns 100% of the Blackwater project
located in Canada. 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 the statements made under "Rainy
River: The Operational Plan Forward", as well as other statements elsewhere in this news release, including, among others,
statements with respect to: guidance for production and costs, and the factors contributing to those expected results, including
mill throughput, mill availability, metal recoveries and ore grade, as well as expected capital and other expenditures; planned
development activities and timing for 2018 and future years at the Rainy River Mine, including adjustments to the back-end of the
mill; and the revised life-of-mine plan and the National Instrument 43-101 Technical Report for Rainy River dated July 25, 2018.
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 latest annual management's discussion
and analysis ("MD&A"), Annual Information Form and Technical Reports filed at www.sedar.com and on EDGAR at www.sec.gov.
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 and U.S. dollar, and to a lesser extent, the Mexican Peso, 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 First Nations and other Aboriginal groups in respect of the Rainy River mine and Blackwater project 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 and the absence of material negative comments
during the applicable regulatory processes; and (9) in the case of production, cost and expenditure outlooks at the operating
mines for 2018, commodity prices, exchange rates, grades, recovery rates, mill availability and mill throughput rates being consistent
with those estimated for the purposes for 2018.
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 and, to a lesser extent, Mexico; discrepancies between actual and estimated production, between actual and estimated
mineral reserves and mineral resources and between actual and estimated metallurgical recoveries; risks related to early production
at the Rainy River Mine, including failure of equipment, machinery, the process circuit or other processes to perform as designed
or intended; fluctuation in treatment and refining charges; changes in national and local government legislation in Canada, the
United States and, to a lesser extent, 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, 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 mineral reserves and mineral
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; 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. 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 risks associated with the start of production of a mine, such as Rainy River, (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 Annual Information Form, MD&A and other disclosure documents filed on and available at www.sedar.com and on EDGAR
at www.sec.gov. 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.
Cautionary Note to U.S. Readers Concerning
Estimates of Mineral Reserves and Mineral Resources
Information concerning the properties and operations
of New Gold has been prepared in accordance with Canadian standards under applicable Canadian securities laws, and may not be comparable
to similar information for United States companies. The terms "Mineral Resource", "Measured Mineral Resource",
"Indicated Mineral Resource" and "Inferred Mineral Resource" used in this news release are Canadian mining
terms as defined in the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") Definition Standards for Mineral
Resources and Mineral Reserves adopted by CIM Council on May 10, 2014 and incorporated by reference in National Instrument 43-101.
While the terms "Mineral Resource", "Measured Mineral Resource", "Indicated Mineral Resource" and
"Inferred Mineral Resource" are recognized and required by Canadian securities regulations, they are not defined terms
under standards of the United States Securities and Exchange Commission. As such, certain information contained in this news
release concerning descriptions of mineralization and mineral resources under Canadian standards is not comparable to similar information
made public by United States companies subject to the reporting and disclosure requirements of the United States Securities and
Exchange Commission.
An "Inferred Mineral Resource" has
a great amount of uncertainty as to its existence and as to its economic and legal feasibility. Under Canadian rules, estimates
of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies. It cannot be assumed that
all or any part of an "Inferred Mineral Resource" will ever be upgraded to a higher confidence category.
Readers are cautioned not to assume that all or any part of an "Inferred Mineral Resource" exists or is economically
or legally mineable.
Under United States standards, mineralization
may not be classified as a "Reserve" unless the determination has been made that the mineralization could be economically
and legally produced or extracted at the time the reserve estimation is made. Readers are cautioned not to assume that all
or any part of the measured or indicated mineral resources will ever be converted into mineral reserves. In addition, the definitions
of "Proven Mineral Reserves" and "Probable Mineral Reserves" under CIM standards differ in certain respects
from the standards of the United States Securities and Exchange Commission.
Technical Information
The scientific and technical information relating
to the operation of New Gold's operating mines contained herein has been reviewed and approved by Mr. Nicholas Kwong, Director,
Business Improvement of New Gold. All other scientific and technical information contained herein has been reviewed and approved
by Mark A. Petersen, Vice President, Exploration of New Gold. Mr. Kwong is a Professional Engineer and member of the Association
of Professional Engineers and Geoscientists of British Columbia. Mr. Petersen is a SME Registered Member, AIPG Certified Professional
Geologist. Mr. Petersen and Mr. Kwong are "Qualified Persons" for the purposes of NI 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 the Rainy River National Instrument 43-101 Technical Report dated June 30, 2018 and
New Gold's Annual Information Form for the year ended December 31, 2017 filed on www.sedar.com.
Non-GAAP Measures
(1) All-In 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 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 net 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, 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 in the MD&A accompanying New Gold's financial statements filed from
time to time on www.sedar.com.
OPEX, Cash Cost and AISC Reconciliation
| |
|
| |
Three months ended September 30, 2018 |
| (in millions of U.S. dollars, except where noted) |
Gold |
Copper |
Silver |
Total |
| OPEX, Cash Cost and AISC Reconciliation |
|
|
|
|
| Operating expenses(1) |
49.3 |
32.1 |
1.2 |
82.6 |
| Units of metal sold from continuing operations (ounces/millions of pounds/millions of ounces) |
76,653 |
20.5 |
0.2 |
|
| Operating expenses per unit of metal sold ($/ounce or pound) |
644 |
1.57 |
7.64 |
|
| Operating expenses(1) |
49.3 |
32.1 |
1.2 |
82.6 |
| Treatment and refining charges on concentrate sales |
2.0 |
5.4 |
0.1 |
7.5 |
| Adjustments(2) |
(5.7) |
(3.7) |
- |
(9.4) |
| Total cash costs from continuing operations |
45.6 |
33.8 |
1.3 |
80.7 |
| By-product silver and copper sales from continuing operations |
|
|
|
(62.4) |
| Total cash costs net of by-product revenue from continuing operations |
|
|
|
18.3 |
| Units of metal sold from continuing operations (ounces/millions of pounds/millions of ounces) |
76,653 |
20.5 |
0.2 |
|
| Total cash costs on a co-product basis(3) from continuing operations ($/ounce or pound) |
596 |
1.65 |
7.37 |
|
| Total cash costs per gold ounce sold from continuing operations ($/ounce) |
|
|
|
239 |
| Total co-product cash costs from continuing operations |
45.6 |
33.8 |
1.3 |
|
| Total cash costs net of by-product revenue from continuing operations |
|
|
|
18.3 |
| Sustaining capital expenditures |
31.2 |
20.3 |
0.8 |
52.3 |
| Sustaining exploration - expensed |
0.3 |
0.2 |
- |
0.5 |
| Corporate G&A including share-based compensation(4) |
1.5 |
1.0 |
- |
2.5 |
| Reclamation expenses |
1.0 |
0.7 |
- |
1.7 |
| Total co-product all-in sustaining costs from continuing operations |
79.6 |
56.0 |
2.1 |
|
| Total all-in sustaining costs net of by-product revenue from continuing operations |
|
|
|
75.4 |
| All-in sustaining costs on a co-product basis from continuing operations (3) ($/ounce or pound) |
1,041 |
2.73 |
12.64 |
|
| All-in sustaining costs per gold ounce sold from continuing operations ($/ounce) |
|
|
|
984 |
| Total co-product all-in sustaining costs (5) |
113.5 |
55.1 |
2.0 |
|
| Total all-in sustaining costs net of by-product revenue (5) |
|
|
|
108.2 |
| All-in sustaining costs on a co-product basis (3) ($/ounce or pound) |
1,013 |
2.69 |
12.43 |
|
| All-in sustaining costs per gold ounce sold ($/ounce) |
|
|
|
966 |
| (1) |
Operating expenses are apportioned to each metal produced on a percentage of revenue basis. |
| (2) |
Adjustments include the non-cash heap leach inventory write-down associated with discontinuing the addition of cyanide to the heap leach pad at Cerro San Pedro and social closure costs incurred at Cerro San Pedro included in operating expenses. |
| (3) |
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 apportions the cash costs to each metal produced on a percentage of revenue basis. |
| (4) |
Includes the sum of corporate administration costs and share-based payment expense per the income statement, net of any non-cash depreciation within those figures. |
| (5) |
Includes the impact of Mesquite, which has been classified as a discontinued operation as at and for the three and nine months ended September 30, 2018. |
OPEX, Cash Cost and AISC Reconciliation
| |
|
| |
Nine months ended September 30, 2018 |
| (in millions of U.S. dollars, except where noted) |
Gold |
Copper |
Silver |
Total |
| OPEX, Cash Cost and AISC Reconciliation |
|
|
|
|
| Operating expenses(1) |
144.5 |
100.5 |
4.5 |
249.5 |
| Units of metal sold from continuing operations (ounces/millions of pounds/millions of ounces) |
213,581 |
61.4 |
0.5 |
|
| Operating expenses per unit of metal sold ($/ounce or pound) |
677 |
1.64 |
8.43 |
|
| Operating expenses(1) |
144.5 |
100.5 |
4.5 |
249.5 |
| Treatment and refining charges on concentrate sales |
6.2 |
16.6 |
0.3 |
23.1 |
| Adjustments(2) |
(5.9) |
(4.1) |
(0.2) |
(10.2) |
| Total cash costs from continuing operations |
144.5 |
113.0 |
4.6 |
262.4 |
| By-product silver and copper sales from continuing operations |
|
|
|
(197.7) |
| Total cash costs net of by-product revenue from continuing operations |
|
|
|
64.7 |
| Units of metal sold from continuing operations (ounces/millions of pounds/millions of ounces) |
213,581 |
61.4 |
0.5 |
|
| Total cash costs on a co-product basis(3) from continuing operations ($/ounce or pound) |
683 |
1.84 |
8.67 |
|
| Total cash costs per gold ounce sold from continuing operations ($/ounce) |
|
|
|
303 |
| Total co-product cash costs from continuing operations |
144.9 |
113.0 |
4.6 |
|
| Total cash costs net of by-product revenue from continuing operations |
|
|
|
64.7 |
| Sustaining capital expenditures |
83.3 |
57.9 |
2.6 |
143.8 |
| Sustaining exploration - expensed |
0.9 |
0.6 |
- |
1.5 |
| Corporate G&A including share-based compensation(4) |
7.9 |
5.5 |
0.2 |
13.6 |
| Reclamation expenses |
2.6 |
1.8 |
0.1 |
4.5 |
| Total co-product all-in sustaining costs from continuing operations |
239.6 |
178.8 |
7.5 |
|
| Total all-in sustaining costs net of by-product revenue from continuing operations |
|
|
|
228.1 |
| All-in sustaining costs on a co-product basis from continuing operations (3) ($/ounce or pound) |
1,122 |
2.91 |
14.19 |
|
| All-in sustaining costs per gold ounce sold from continuing operations ($/ounce) |
|
|
|
1,069 |
| Total co-product all-in sustaining costs (5) |
357.5 |
183.6 |
8.0 |
|
| Total all-in sustaining costs net of by-product revenue (5) |
|
|
|
332.9 |
| All-in sustaining costs on a co-product basis (3) ($/ounce or pound) |
1,057 |
2.78 |
13.60 |
|
| All-in sustaining costs per gold ounce sold ($/ounce) |
|
|
|
984 |
| (1) |
Operating expenses are apportioned to each metal produced on a percentage of revenue basis. |
| (2) |
Adjustments include the non-cash heap leach inventory write-down associated with discontinuing the addition of cyanide to the heap leach pad at Cerro San Pedro and social closure costs incurred at Cerro San Pedro included in operating expenses. |
| (3) |
Amounts presented on a co-product basis remove the impact of other metal sales that are produced as a by-product of our gold production and apportions the cash costs to each metal produced on a percentage of revenue basis. |
| (4) |
Includes the sum of corporate administration costs and share-based payment expense per the income statement, net of any non-cash depreciation within those figures. |
| (5) |
Includes the impact of Mesquite, which has been classified as a discontinued operation as at and for the three and nine months ended September 30, 2018. |
OPEX, Cash Cost and AISC Reconciliation
| |
|
| |
Three months ended September 30, 2017 |
| (in millions of U.S. dollars, except where noted) |
Gold |
Copper |
Silver |
Total |
| OPEX, Cash Cost and AISC Reconciliation |
|
|
|
|
| Operating expenses(1) |
15.0 |
24.9 |
1.5 |
41.4 |
| Units of metal sold from continuing operations (ounces/millions of pounds/millions of ounces) |
28,479 |
21.8 |
0.2 |
|
| Operating expenses per unit of metal sold ($/ounce or pound) |
527 |
1.14 |
6.79 |
|
| Operating expenses(1) |
15.0 |
24.9 |
1.5 |
41.4 |
| Treatment and refining charges on concentrate sales |
2.4 |
5.4 |
0.1 |
7.9 |
| Adjustments(2) |
(0.1) |
(0.2) |
- |
(0.3) |
| Total cash costs from continuing operations |
17.5 |
30.1 |
1.6 |
49.0 |
| By-product silver and copper sales from continuing operations |
|
|
|
(64.3) |
| Total cash costs net of by-product revenue from continuing operations |
|
|
|
(15.3) |
| Units of metal sold from continuing operations (ounces/millions of pounds/millions of ounces) |
28,479 |
21.8 |
0.2 |
|
| Total cash costs on a co-product basis(3) from continuing operations ($/ounce or pound) |
610 |
1.40 |
7.20 |
|
| Total cash costs per gold ounce sold from continuing operations ($/ounce) |
|
|
|
(535) |
| Total co-product cash costs from continuing operations |
17.5 |
30.1 |
1.6 |
|
| Total cash costs net of by-product revenue from continuing operations |
|
|
|
(15.3) |
| Sustaining capital expenditures |
4.2 |
7.0 |
0.4 |
11.6 |
| Sustaining exploration - expensed |
0.4 |
0.6 |
- |
1.0 |
| Corporate G&A including share-based compensation(4) |
3.0 |
5.0 |
0.3 |
8.3 |
| Reclamation expenses |
0.6 |
1.0 |
0.1 |
1.7 |
| Total co-product all-in sustaining costs from continuing operations |
25.7 |
43.7 |
2.4 |
|
| Total all-in sustaining costs net of by-product revenue from continuing operations |
|
|
|
7.5 |
| All-in sustaining costs on a co-product basis from continuing operations (3) ($/ounce or pound) |
898 |
2.00 |
11.20 |
|
| All-in sustaining costs per gold ounce sold from continuing operations ($/ounce) |
|
|
|
264 |
| Total co-product all-in sustaining costs (5) |
78.1 |
56.7 |
3.3 |
|
| Total all-in sustaining costs net of by-product revenue (5) |
|
|
|
63.3 |
| All-in sustaining costs on a co-product basis (3) ($/ounce or pound) |
977 |
2.31 |
12.88 |
|
| All-in sustaining costs per gold ounce sold ($/ounce) |
|
|
|
792 |
| (1) |
Operating expenses are apportioned to each metal produced on a percentage of revenue basis. |
| (2) |
Adjustments relate to non-cash items related to inventory write-down reversals and social closure costs incurred at Cerro San Pedro that are included in operating expenses. |
| (3) |
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 apportions the cash costs to each metal produced on a percentage of revenue basis. |
| (4) |
Includes the sum of corporate administration costs and share-based payment expense per the income statement, net of any non-cash depreciation within those figures. |
| (5) |
Includes the impact of Mesquite, which has been classified as a discontinued operation as at and for the three and nine months ended September 30, 2017. |
OPEX, Cash Cost and AISC Reconciliation
| |
|
| |
Nine months ended September 30, 2017 |
| (in millions of U.S. dollars, except where noted) |
Gold |
Copper |
Silver |
Total |
| OPEX, Cash Cost and AISC Reconciliation |
|
|
|
|
| Operating expenses(1) |
47.2 |
70.3 |
4.7 |
122.2 |
| Units of metal sold from continuing operations (ounces/millions of pounds/millions of ounces) |
86,484 |
62.5 |
0.7 |
|
| Operating expenses per unit of metal sold ($/ounce or pound) |
546 |
1.10 |
7.10 |
|
| Operating expenses(1) |
47.2 |
70.3 |
4.7 |
122.2 |
| Treatment and refining charges on concentrate sales |
7.1 |
14.9 |
0.3 |
22.3 |
| Adjustments(2) |
(0.4) |
(0.5) |
- |
(0.9) |
| Total cash costs from continuing operations |
53.9 |
84.7 |
5.0 |
143.6 |
| By-product silver and copper sales from continuing operations |
|
|
|
(176.3) |
| Total cash costs net of by-product revenue from continuing operations |
|
|
|
(32.7) |
| Units of metal sold from continuing operations (ounces/millions of pounds/millions of ounces) |
86,484 |
62.5 |
0.7 |
|
| Total cash costs on a co-product basis(3) from continuing operations ($/ounce or pound) |
625 |
1.40 |
7.50 |
|
| Total cash costs per gold ounce sold from continuing operations ($/ounce) |
|
|
|
(378) |
| Total co-product cash costs from continuing operations |
53.9 |
84.7 |
5.0 |
|
| Total cash costs net of by-product revenue from continuing operations |
|
|
|
(32.7) |
| Sustaining capital expenditures |
12.2 |
18.3 |
1.2 |
31.7 |
| Sustaining exploration - expensed |
0.6 |
0.9 |
0.1 |
1.6 |
| Corporate G&A including share-based compensation(4) |
9.8 |
14.6 |
1.0 |
25.4 |
| Reclamation expenses |
1.9 |
2.8 |
0.2 |
4.9 |
| Total co-product all-in sustaining costs from continuing operations |
78.4 |
121.3 |
7.5 |
|
| Total all-in sustaining costs net of by-product revenue from continuing operations |
|
|
|
30.9 |
| All-in sustaining costs on a co-product basis from continuing operations (3) ($/ounce or pound) |
907 |
1.9 |
11.50 |
|
| All-in sustaining costs per gold ounce sold from continuing operations ($/ounce) |
|
|
|
358 |
| Total co-product all-in sustaining costs (5) |
240.4 |
146.4 |
9.4 |
|
| Total all-in sustaining costs net of by-product revenue (5) |
|
|
|
188.2 |
| All-in sustaining costs on a co-product basis (3) ($/ounce or pound) |
902 |
2.04 |
12.19 |
|
| All-in sustaining costs per gold ounce sold ($/ounce) |
|
|
|
706 |
| (1) |
Operating expenses are apportioned to each metal produced on a percentage of revenue basis. |
| (2) |
Adjustments relate to non-cash items related to inventory write-down reversals and social closure costs incurred at Cerro San Pedro that are included in operating expenses. |
| (3) |
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 apportions the cash costs to each metal produced on a percentage of revenue basis. |
| (4) |
Includes the sum of corporate administration costs and share-based payment expense per the income statement, net of any non-cash depreciation within those figures. |
| (5) |
Includes the impact of Mesquite, which has been classified as a discontinued operation as at and for the three and nine months ended September 30, 2017. |
(3) Operating Cash Flows Generated from
Continuing Operations before Changes in Working Capital
"Operating cash flows generated from continuing
operations before changes in working capital" is a non-GAAP financial measures with no standard meaning under IFRS, excludes
changes in non-cash operating working capital. Management uses this measure to evaluate the Company's ability to generate cash
from its operations before working capital changes. Further details regarding operating cash flows generated from continuing operations
before changes in working capital and a reconciliation to the nearest IFRS measure is provided in the MD&A accompanying New
Gold's financial statements filed from time to time on www.sedar.com.
Operating Cash Flows Generated from Continuing
Operations before Changes in Working Capital Reconciliation
| |
|
|
| |
Three months ended September 30 |
Nine months ended September 30 |
(in millions of U.S. dollars,
except per share amounts) |
2018 |
2017 |
2018 |
2017 |
| Operating cash flows generated from continuing operations |
43.2 |
54.8 |
135.2 |
138.8 |
| Add back (deduct): Change in non-cash operating working capital from continuing operations |
26.5 |
(9.2) |
54.6 |
(24.5) |
Operating cash flows generated from continuing operations before changes in
non-cash working capital |
69.7 |
45.6 |
189.8 |
114.3 |
| Cash generated from discontinued operations |
7.9 |
11.2 |
46.9 |
84.6 |
| Add back: Change in non-cash operating working capital from discontinued operations |
4.9 |
3.8 |
20.4 |
7.4 |
| Cash generated from operations before changes in non-cash operating working capital |
82.5 |
60.6 |
257.1 |
206.3 |
(4) Adjusted Net Earnings/(Loss) from Continuing
Operations
"Adjusted net (loss)/earnings from continuing
operations" and "adjusted net (loss)/earnings per share from continuing operations" are non-GAAP financial measures.
Earnings/(loss) from continuing operations have been adjusted and tax affected for impairment losses, inventory write-downs, corporate
restructuring, and gain on modification of long-term debt 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 from continuing operations and adjusted net (loss)/earnings per share from continuing operations 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 from Continuing Operations
Reconciliation
| |
|
|
| |
Three months ended September 30 |
Nine months ended September 30 |
(in millions of U.S. dollars,
except per share amounts) |
2018 |
2017 |
2018 |
2017 |
| Earnings (loss) before taxes from continuing operations |
- |
31.7 |
(423.3) |
75.1 |
| Other losses (gains) |
(14.3) |
(25.2) |
(3.8) |
(70.8) |
| Asset impairment |
- |
- |
383.7 |
- |
| Gain on modification of long-term debt |
- |
(3.3) |
- |
(3.3) |
| Corporate restructuring |
- |
- |
2.3 |
- |
| Inventory impairment |
10.5 |
- |
10.5 |
- |
| Adjusted net (loss) earnings from continuing operations before tax |
(3.8) |
3.2 |
(39.6) |
1.0 |
| Income tax (expense) recovery |
(1.6) |
(5.0) |
89.2 |
(6.2) |
| Income tax adjustments |
0.8 |
4.4 |
(82.9) |
5.1 |
| Adjusted income tax expense |
(0.8) |
(0.6) |
6.3 |
(1.1) |
| Adjusted net earnings (loss) from continuing operations |
(4.6) |
2.6 |
(33.3) |
(0.1) |
| Adjusted earnings (loss) per share from continuing operations (basic and diluted) |
(0.01) |
0.00 |
(0.06) |
(0.00) |
(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. Further details regarding average realized price
and a reconciliation to the nearest IFRS measure is provided in the MD&A accompanying New Gold's financial statements filed
from time to time on www.sedar.com.
(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 September 30 |
Nine months ended September 30 |
(in millions of U.S. dollars,
except per share amounts) |
2018 |
2017 |
2018 |
2017 |
| Revenues |
141.7 |
93.0 |
447.1 |
265.2 |
| Less: Operating expenses |
82.6 |
41.4 |
249.5 |
122.2 |
| Operating margin |
64.5 |
51.6 |
197.6 |
143.0 |
Consolidated Income Statements (unaudited)
| |
|
|
| |
Three months ended September 30 |
Nine months ended September 30 |
(in millions of U.S. dollars,
except per share amounts) |
2018 |
2017 |
2018 |
2017 |
| Revenues |
147.1 |
93.0 |
447.1 |
265.2 |
| Operating expenses |
82.6 |
41.4 |
249.5 |
122.2 |
| Depreciation and depletion |
57.4 |
37.0 |
179.2 |
108.6 |
| Revenue less cost of goods sold |
7.1 |
14.6 |
18.4 |
34.4 |
| Corporate administration |
4.7 |
5.4 |
15.6 |
18.8 |
| Corporate restructuring |
- |
- |
2.3 |
- |
| Share-based payment expenses |
(1.0) |
3.1 |
0.5 |
6.9 |
| Asset impairment |
- |
- |
383.7 |
- |
| Exploration and business development |
0.5 |
1.9 |
1.5 |
5.1 |
| Earnings (loss) from operations |
2.9 |
4.2 |
(385.2) |
3.6 |
| Finance income |
0.3 |
0.3 |
1.0 |
0.9 |
| Finance costs |
(17.5) |
2.0 |
(51.9) |
(0.2) |
| Other gains (losses) |
14.3 |
25.2 |
3.8 |
70.8 |
| Earnings (loss) before taxes |
- |
31.7 |
(432.3) |
75.1 |
| Income tax (expense) recovery |
(1.6) |
(5.0) |
89.2 |
(6.2) |
| (Loss) earnings from continuing operations |
(1.6) |
26.7 |
(343.1) |
68.9 |
| (Loss) earnings from discontinued operations, net of tax |
(164.2) |
0.3 |
(154.2) |
18.7 |
| Net (loss) earnings |
(165.8) |
27.0 |
(497.3) |
87.6 |
| (Loss) earnings from continuing operations per share |
|
|
|
| Basic |
(0.00) |
0.05 |
(0.59) |
0.12 |
| Diluted |
(0.00) |
0.05 |
(0.59) |
0.12 |
| (Loss) earnings per share |
|
|
|
|
| Basic |
(0.29) |
0.05 |
(0.86) |
0.16 |
| Diluted |
(0.29) |
0.05 |
(0.86) |
0.16 |
| Weighted average number of shares outstanding (in millions) |
| Basic |
578.7 |
576.2 |
578.7 |
560.2 |
| Diluted |
578.7 |
577.0 |
578.7 |
560.9 |
Consolidated Statements of Financial Position
(unaudited)
| |
|
|
| |
As at September 30 |
As at December 31 |
| (in millions of U.S. dollars) |
2018 |
2017 |
| ASSETS |
|
|
| Current assets |
|
|
| Cash and cash equivalents |
129.0 |
216.2 |
| Trade and other receivables |
33.4 |
27.1 |
| Inventories |
122.8 |
193.2 |
| Current income tax receivable |
4.3 |
12.9 |
| Prepaid expenses and other |
4.9 |
5.6 |
| Total current assets |
294.4 |
455.0 |
| Non-current inventories |
13.3 |
78.7 |
| Mining interests |
2,581.3 |
3,200.4 |
| Deferred tax assets |
113.0 |
171.6 |
| Other |
2.1 |
2.6 |
| |
3,004.1 |
3,908.3 |
| Assets held for sale |
206.2 |
109.0 |
| Total assets |
3,210.3 |
4,017.3 |
| LIABILITIES AND EQUITY |
|
|
| Current liabilities |
|
|
| Trade and other payables |
138.7 |
178.2 |
| Deferred benefit – Peak sale prepayment |
- |
3.0 |
| Total current liabilities |
138.7 |
181.2 |
| Reclamation and closure cost obligations |
96.3 |
121.5 |
| Gold stream obligation |
181.3 |
249.0 |
| Provisions |
1.0 |
2.6 |
| Long-term debt |
939.8 |
1,007.7 |
| Deferred tax liabilities |
128.4 |
250.3 |
| Other |
10.5 |
2.7 |
| |
1,496.0 |
1,815.0 |
| Liabilities held for sale |
36.0 |
62.8 |
| Total liabilities |
1,532.0 |
1,877.8 |
| Equity |
|
|
| Common shares |
3,036.8 |
3,036.5 |
| Contributed surplus |
105.0 |
103.2 |
| Other reserves |
(4.9) |
(38.9) |
| Deficit |
(1,458.6) |
(961.3) |
| Total equity |
1,678.3 |
2,139.5 |
| Total liabilities and equity |
3,210.3 |
4,017.3 |
Consolidated Statements of Cash Flow (unaudited)
| |
|
|
(in millions of U.S. dollars,
except per share amounts) |
Three months ended September 30 |
Nine months ended September 30 |
| 2018 |
2017 |
2018 |
2017 |
| OPERATING ACTIVITIES |
|
|
|
|
| (Loss) earnings from continuing operations |
(1.6) |
26.7 |
(343.1) |
68.9 |
| Adjustments for: |
|
|
|
|
| Foreign exchange (gains) loss |
(10.7) |
(30.6) |
17.3 |
(52.6) |
| Asset impairment |
- |
- |
383.7 |
- |
| Reclamation and closure costs paid |
(0.4) |
(0.3) |
(0.6) |
(0.8) |
| Gain on disposal of El Morro stream |
- |
- |
- |
(33.0) |
| Depreciation and depletion |
57.7 |
37.3 |
180.1 |
108.8 |
| Other non-cash adjustments |
6.6 |
10.7 |
(6.4) |
22.1 |
| Income tax expense (recovery) |
1.6 |
5.0 |
(89.2) |
6.2 |
| Finance income |
(0.3) |
(0.3) |
(1.0) |
(0.9) |
| Finance costs |
17.5 |
(2.0) |
51.9 |
0.2 |
| |
70.4 |
46.5 |
192.7 |
118.9 |
| Change in non-cash operating working capital |
(26.5) |
9.2 |
(54.6) |
24.5 |
| Income taxes paid |
(0.8) |
(0.9) |
(2.9) |
(4.6) |
| Operating cash flows generated from continuing operations |
43.2 |
54.8 |
135.2 |
138.8 |
| Operating cash flows generated from discontinued operations |
7.9 |
11.2 |
46.9 |
84.6 |
| Cash generated from operations |
51.1 |
66.0 |
182.1 |
223.4 |
| INVESTING ACTIVITIES |
|
|
|
|
| Mining interests |
(56.4) |
(146.6) |
(174.5) |
(459.6) |
| Proceeds from the sale of Peak Mines, net of transaction costs |
- |
- |
42.4 |
- |
| Proceeds from the sale of the El Morro stream and other assets |
0.1 |
- |
0.3 |
65.3 |
| Interest received |
0.2 |
0.3 |
0.8 |
0.7 |
| Gold price option contract investment costs |
- |
- |
- |
(0.9) |
| Investing cash flows used by continuing operations |
(56.1) |
(146.3) |
(131.0) |
(394.5) |
| Investing cash flows used by discontinued operations |
(2.8) |
(11.7) |
(11.8) |
(30.5) |
| Cash used by investing activities |
(58.9) |
(158.0) |
(142.8) |
(425.0) |
| FINANCING ACTIVITY |
|
|
|
|
| Proceeds received from exercise of options |
- |
- |
- |
0.6 |
| Net proceeds received from issuance of common shares |
- |
- |
- |
164.7 |
| (Repayment) drawdown of Credit Facility |
(20.0) |
100.0 |
(70.0) |
100.0 |
| Finance lease payments |
(1.3) |
- |
(1.9) |
- |
| Cash settlement of gold stream obligation |
(4.2) |
- |
(10.8) |
- |
| Issuance of senior unsecured notes, net of transaction costs |
- |
- |
- |
295.1 |
| Repayment of senior unsecured notes |
- |
- |
- |
(305.3) |
| Interest paid |
(3.4) |
(2.5) |
(35.7) |
(35.3) |
| Cash (used by) generated by financing activities |
(28.9) |
97.5 |
(118.4) |
219.8 |
| Effect of exchange rate changes on cash and cash equivalents |
0.6 |
2.8 |
(0.1) |
3.0 |
| Cash and cash equivalents classified as held for sale |
(2.3) |
- |
(2.3) |
- |
| Cash and cash equivalents sold |
- |
- |
(5.7) |
- |
| Change in cash and cash equivalents |
(38.4) |
8.3 |
(87.2) |
21.2 |
| Cash and cash equivalents, beginning of period |
167.4 |
198.8 |
216.2 |
185.9 |
| Cash and cash equivalents, end of period |
129.0 |
207.1 |
129.0 |
207.1 |
| Cash and cash equivalents are comprised of: |
| Cash |
117.0 |
134.2 |
117.0 |
134.2 |
| Short-term money market instruments |
12.0 |
72.9 |
12.0 |
72.9 |
| |
129.0 |
207.1 |
129.0 |
207.1 |
View
original content:http://www.prnewswire.com/news-releases/new-gold-announces-2018-third-quarter-results-300737498.html
SOURCE New Gold Inc.
View original content: http://www.newswire.ca/en/releases/archive/October2018/24/c7250.html
%CIK: 0000800166
For further information: Anne Day, Vice President, Investor
Relations, Direct: +1 (416) 324-6003, Email: Anne.Day@newgold.com; Julie Taylor, Director, Corporate Communications and Investor
Relations, Direct: +1 (416) 324-6015, Toll free: +1 (888) 315-9715, Email: info@newgold.com
CO: New Gold Inc.
CNW 18:15e 24-OCT-18
This regulatory filing also includes additional resources:
ex991.pdf
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