Rainy River Achieves Revised Annual Guidance
New Afton Exceeds Annual Guidance
TORONTO, Jan. 8, 2019 /PRNewswire/ - New Gold Inc.
("New Gold" or the "Company") (TSX and NYSE American: NGD)
reports strong fourth quarter operating results from the Rainy
River and New Afton Mines, with Rainy
River achieving annual revised gold production guidance and
New Afton exceeding annual gold production guidance as well as
achieving the high end of annual copper production guidance.
(All amounts are in US dollars unless otherwise indicated.)
Fourth Quarter and Recent Operational Highlights
- Total gold production for the quarter was 110,559 ounces and
455,448 ounces for the year, including 97,428 ounces and 315,483
ounces, respectively, from continuing operations1.
- The Rainy River Mine reported best ever quarterly gold
production of 77,202 ounces, a 39% increase over the prior quarter.
The stronger operational performance achieved in September
continued into the fourth quarter with the last four months of the
year contributing 45% of the 227,284 ounces produced for the year,
achieving revised annual guidance.
- The New Afton Mine delivered another solid quarter with gold
production of 18,778 ounces, contributing to annual production of
77,329 ounces, which exceeded the high end of annual guidance. New
Afton produced 20.8 million pounds of copper for the quarter and
85.1 million pounds for the year, achieving the high end of annual
guidance.
- During the quarter, mine closure activities continued at the
Cerro San Pedro Mine and 1,448 gold ounces were recovered from
residual leaching of the heap leach pads.
- Consistent with the renewed vision of repositioning the Rainy
River Mine for long-term success, the Company has adopted a
disciplined approach to capital allocation as well as mine life
optimization. Accordingly, management has deferred the 2019
underground mine development plan to 2020. During 2019, the Company
will launch a comprehensive review that includes alternative
underground mining scenarios with the overall objective of reducing
capital and improving the return on investment for the underground
portion of the life of mine. Further details will be provided in
the 2019 guidance press release, scheduled for release in the
second half of January.
- An internally funded development strategy for the New Afton
C-zone has been launched, which will extend mine life to 2030 with
robust economics. Further details will be provided in the 2019
guidance press release, scheduled for release in the second half of
January.
"We are pleased to report a strong fourth quarter at both
Rainy River and New Afton. It is
encouraging to see the improvement in overall performance achieved
at Rainy River in the final four
months of the year. This marks a pivotal turning point for
Rainy River as we reposition the
asset for long-term success. The stronger production delivered
during these months allowed the operation to comfortably meet
revised annual production guidance. The New Afton Mine reported
solid quarter-over-quarter results throughout the year and exceeded
annual gold production guidance while meeting the high end of
annual copper production guidance," stated Renaud Adams, CEO. "We begin 2019 on a positive
note and we expect to build on the successes achieved at
Rainy River in 2019 with a
disciplined strategy of driving operational and cost efficiencies
throughout the operation. It is with a renewed commitment that we
have relaunched a development strategy for the New Afton C-zone
which will significantly extend the mine life of this core asset
and unlock its long-term value potential. We look forward to
delivering positive results from both our core assets to create
sustainable shareholder value."
1. Continuing
operations include the Rainy River, New Afton and Cerro San Pedro
Mines.
|
Fourth Quarter and Annual Production Highlights
Gold Produced
(oz)
|
Q1
18
|
Q2
18
|
Q3
18
|
Q4
18
|
2018
|
2018
Guidance
|
Rainy
River
|
39,325
|
55,219
|
55,538
|
77,202
|
227,284
|
210,000 –
250,000
|
New Afton
|
19,998
|
18,637
|
19,916
|
18,778
|
77,329
|
55,000 –
65,000
|
Cero San
Pedro
|
4,448
|
2,895
|
2,079
|
1,448
|
10,870
|
10,000 –
15,000
|
Total Produced -
Continuing Operations1 (oz)
|
63,771
|
76,751
|
77,533
|
97,428
|
315,483
|
275,000 –
330,000
|
Mesquite2
|
33,111
|
31,799
|
36,492
|
13,131
|
114,533
|
140,000 –
150,000
|
Peak3
|
25,433
|
-
|
-
|
-
|
25,433
|
N/A
|
Total Gold
Produced (oz)
|
122,315
|
108,550
|
114,025
|
110,559
|
455,448
|
415,000 –
480,000
|
Copper Produced
(Mlbs)
|
Q1
18
|
Q2
18
|
Q3
18
|
Q4
18
|
2018
|
2018
Guidance
|
New Afton
|
22.2
|
20.4
|
21.7
|
20.8
|
85.1
|
75 - 85
|
Total Produced -
Continuing Operations1 (Mlbs)
|
22.2
|
20.4
|
21.7
|
20.8
|
85.1
|
75 -
85
|
Peak3
|
4.4
|
-
|
-
|
-
|
4.4
|
N/A
|
Total Copper
Produced (Mlbs)
|
26.6
|
20.4
|
21.7
|
20.8
|
89.5
|
75 -
85
|
|
|
1.
|
Continuing operations
include the Rainy River, New Afton and Cerro San Pedro
Mines.
|
2.
|
The Company completed
the sale of the Mesquite Mine on October 30, 2018.
|
3.
|
The Company completed
the sale of Peak Mines in early April 2018.
|
Rainy River Mine Operational Highlights
Rainy River
Mine
|
Q1
18
|
Q2
18
|
Q3
18
|
Q4
18
|
2018
|
Tonnes mined per day
(ore and waste)
|
112,432
|
107,416
|
102,290
|
111,507
|
108,392
|
Ore tonnes mined per
day
|
36,296
|
36,043
|
30,439
|
32,054
|
33,687
|
Strip ratio
(waste:ore)
|
2.1
|
1.98
|
2.36
|
2.48
|
2.22
|
Tonnes milled per
calendar day
|
17,534
|
16,549
|
16,962
|
20,668
|
17,934
|
Tonnes milled run
rate1
|
22,771
|
22,364
|
22,318
|
25,835
|
23,291
|
Gold grade milled
(g/t)
|
1.08
|
1.24
|
1.21
|
1.42
|
1.25
|
Gold recovery
(%)
|
81%
|
87%
|
87%
|
89%
|
86%
|
Mill availability
(%)
|
77%
|
74%
|
76%
|
80%
|
77%
|
Gold production
(oz)
|
39,325
|
55,219
|
55,538
|
77,202
|
227,284
|
|
|
1.
|
Run rate is defined
by (total tonnes milled / mill availability) / calendar
days.
|
- In the first full year of operations, Rainy River's safety performance continued to
improve throughout the year with the mine reporting a 0.93 Total
Reported Injury Frequency Rate (TRIFR) by the end of the year, as
compared to 2.94 in 2017.
- During the fourth quarter, the Rainy River Mine reported
continued improvement in overall operational performance and
delivered the best ever quarterly gold production of 77,202 ounces
(66,123 ounces sold) and 227,284 ounces (214,804 sold) for the
year, achieving revised annual guidance.
- The mill run rate averaged 25,835 tonnes per day for the
quarter, the first full quarter in which the mill averaged a daily
run rate above the target 24,000 tonnes per day. Milling operations
were suspended for approximately ten days during the quarter in
order to repair the Semi-Autogenous Grinding (SAG) mill starter and
to address the ball mill trunnion, which will be replaced during
the first quarter of 2019.
- Mill gold recovery for the quarter was 89%. During the quarter,
considerable efforts were deployed to improve the carbon
regeneration and stripping circuits, allowing for an improved
overall recovery of more than 90% during the second half of
December. Mill recoveries are expected to continue to improve over
the next two quarters as ongoing mill upgrades and the optimization
of the grinding circuit are completed.
- A total of 10.3 million ex-pit tonnes were mined during the
quarter, for an average of 111,507 tonnes per day, including 2.53
million tonnes of medium and high-grade ore.
- Grade reconciliation for the quarter continued to be in line
with the resource and dig-shape models, providing additional
confidence in the deposit.
- Consistent with the renewed vision of repositioning the Rainy
River Mine for long-term success, the Company has adopted a
disciplined approach to capital allocation as well as mine life
optimization and accordingly, management has deferred the 2019
underground mine development plan to 2020. During 2019, the Company
will launch a comprehensive review that
includes alternative underground mining scenarios with the
overall objective of reducing capital and improving the return on
investment for the underground portion of the life of mine. Further
details will be provided in the 2019 guidance press release,
scheduled for release in the second half of January.
New Afton Mine Operational Highlights
New Afton
Mine
|
Q1
18
|
Q2
18
|
Q3
18
|
Q4
18
|
2018
|
Underground mine
tpd
|
16,751
|
13,654
|
17,105
|
17,099
|
16,156
|
Gold grade milled
(g/t)
|
0.57
|
0.50
|
0.55
|
0.51
|
0.53
|
Gold recovery
(%)
|
84.1
|
85.5
|
84.7
|
83.5
|
84.5
|
Gold production
(oz)
|
19,998
|
18,637
|
19,916
|
18,778
|
77,329
|
Copper grade milled
(%)
|
0.94
|
0.82
|
0.89
|
0.82
|
0.87
|
Copper recovery
(%)
|
83.2
|
83.8
|
83.0
|
83.0
|
83.2
|
Copper production
(Mlbs)
|
22.2
|
20.4
|
21.7
|
20.8
|
85.1
|
- The New Afton Mine achieved a significant safety milestone in
late December reaching one million person hours without lost-time
injury.
- The mine produced 18,778 gold ounces for the quarter and 77,329
ounces for the year, exceeding the high end of annual guidance.
Copper production for the quarter was 20.8 million pounds and 85.1
million pounds for the year, reaching the high end of annual
guidance.
- An ore segregation strategy commenced during the quarter and
was further enhanced with the recent commissioning of an ore
scanner, which is expected to increase overall mill grade.
- The initial phase of a two-phase mill upgrade to address
supergene ore recovery was completed on time and on budget during
the quarter, which included the installation of pressure jigs and a
magnetic separator with commissioning currently underway. The
second phase of the planned upgrade will be launched during the
first quarter of 2019 with commissioning scheduled for the third
quarter.
- An internally funded development strategy for the New Afton
C-zone has been launched. The development of the C-zone would
provide mine life extension to 2030 with robust economics. Further
details will be provided in the upcoming 2019 guidance press
release scheduled for release in the second half of January.
Corporate Highlights
- The sale of the Mesquite Mine was completed in the quarter for
gross proceeds of $158 million,
providing enhanced liquidity to advance the Company's short-term
operational plan.
- Mr. Rob Chausse was appointed as
Chief Financial Officer effective November
5, 2018. Mr. Chausse brings more than 25 years of
international finance experience exclusively in the mining sector
that enhances the collective experience of the leadership
team.
- On December 11, 2018, the Company
announced a restructuring of the senior leadership team to better
align the corporate structure with the smaller asset base of two
operating assets, the Rainy River and New Afton Mines, as well as
the Blackwater project.
Upcoming News
- 2019 Guidance (second half of January).
- Q4 Financial Results and updated Reserves and Resources (before
market February 14).
- First Quarter 2019 production preview (mid-April).
About New Gold Inc.
New Gold is a Canadian-focused intermediate gold mining company.
The Company has a portfolio of two core producing assets in
top-rated jurisdictions, the Rainy River and New Afton Mines in
Canada. The Company also operates
the Cerro San Pedro Mine in Mexico
(which transitioned to residual leaching in 2016). In addition, New
Gold owns 100% of the Blackwater project located in Canada. New Gold's objective is to be a
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: the launch in 2019 of a
comprehensive review of alternative underground mining scenarios as
well as potential operational and cost efficiencies at Rainy River; the sources of funding and
potential financial performance of the C-zone development at New
Afton; and the timing of future New Gold communications, including
the 2019 guidance news release.
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; and
(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.
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.
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SOURCE New Gold Inc.