Provides Notice of Release of Third Quarter
Results
New Gold Inc. (“New Gold” or the “Company”) (TSX and NYSE
American: NGD) reports in-line third quarter operating results
from the Rainy River and New Afton Mines, which positions the
Company to achieve annual production guidance. (All amounts are in
US dollars unless otherwise indicated.) The Company also announces
that it will release its third quarter 2019 financial results
before market open on Wednesday, November 6, 2019. A conference
call and webcast will follow at 8:30 a.m. Eastern Time to discuss
these results. (Details are provided at the end of this press
release.)
Third Quarter and Recent Highlights
- Total production (excluding production from the Cerro San Pedro
Mine) for the third quarter was 128,899 gold equivalent ounces
(91,087 ounces of gold, 168,159 ounces of silver and 20.1 million
pounds of copper). For the nine-month period, production was
384,719 gold equivalent ounces (255,701 ounces of gold, 455,977
ounces of silver and 61.2 million pounds of copper). Production is
on track to meet annual guidance of 465,000 to 520,000 gold
equivalent ounces.
- The Rainy River Mine reported gold equivalent production of
76,092 ounces (75,080 ounces of gold and 87,705 ounces of silver)
for the quarter. For the nine-month period, production was 205,135
gold equivalent ounces (202,650 ounces of gold and 214,245 ounces
of silver). Production is on track to meet annual guidance of
between 250,000 to 275,000 gold equivalent ounces.
- The New Afton Mine delivered gold equivalent production of
52,807 ounces (16,007 ounces of gold and 20.1 million pounds of
copper). For the nine-month period, production was 179,584 gold
equivalent ounces (53,051 ounces of gold and 61.2 million pounds of
copper). Production is on track to meet guidance of between 215,000
to 245,000 gold equivalent ounces.
- On August 30, the Company completed a bought deal financing for
gross proceeds of C$150 million, the net proceeds of which were
used primarily for debt repayment, with approximately $100 million
of the Company’s 2022 senior unsecured notes purchased. Following
the purchase, the Company had available liquidity of approximately
$420 million, including $135 million in cash and cash
equivalents.
- Mr. Ankit Shah was promoted to Vice President, Strategy and
Business Development effective September 9, 2019. Mr. Shah joined
the Company in 2010 and brings more than 15 years of experience in
strategy, corporate development, capital allocation and investor
relations, primarily within the mining industry.
“The Company has delivered another quarter of strong operational
performance from both assets, which positions the Company to
achieve its annual production guidance. I would like to
congratulate the Rainy River team on delivering the fourth
consecutive quarter of improved performance as we reposition the
mine for long-term success. The New Afton team reported another
solid quarter of in-line results as we continue to advance the
development of the C-zone and unlock the long-term potential of
that asset. As we enter the final quarter of this pivotal year, we
have made significant progress at both operations, strengthened our
balance sheet as we re-position the Company for long-term success
and shareholder value creation.” stated Renaud Adams, CEO. “I am
also very pleased to announce the promotion of Ankit Shah to Vice
President, Strategy and Business Development. I am looking forward
to continuing to work with Ankit as part of the senior leadership
team as we advance our corporate strategy.”
Third Quarter Production Highlights
Gold Equivalent
Produced1 (oz)
Q3 2019
9M 2019
2019 Guidance
Rainy River
76,092
205,135
250,000 – 275,000
New Afton
52,807
179,584
215,000 – 245,000
Total Production
128,899
384,719
465,000 - 520,000
Gold Produced (oz)
Q3 2019
9M 2019
Rainy River
75,080
202,650
245,000 – 270,000
New Afton
16,007
53,051
55,000 - 65,000
Total Production
91,087
255,701
300,000 – 335,000
Copper Produced (Mlbs)
Q3 2019
9M 2019
New Afton Copper Produced
(Mlbs)
20.1
61.2
75 – 85
- Gold equivalent ounces include silver and copper ounces
produced converted to a gold equivalent based on a ratio of the
average spot market prices for the commodities for each period. All
copper is produced by the New Afton Mine. The ratio for Q3 2019 was
calculated based on average spot market prices of $1,474 per gold
ounce, $17.02 per silver ounce and $2.63 per copper pound. The
ratio for 2019 Guidance was calculated based on spot price
assumptions of $1,300 per gold ounce, $16.00 per silver ounce and
$2.75 per copper pound, and a foreign exchange rate of 1.30
Canadian dollars to the US dollar.
Rainy River Mine Operational Highlights
Rainy River Mine
Q1 18
Q2 18
Q3 18
Q4 18
Q1 19
Q2 19
Q3 19
Tonnes mined per day (ore and waste)
112,432
107,416
102,290
111,507
111,679
114,544
111,078
Ore tonnes mined per day
36,296
36,043
30,439
32,054
15,739
21,368
18,220
Operating waste tonnes per day
54,321
43,570
23,333
67,406
62,955
82,488
75,206
Capitalized waste tonnes per day
21,816
27,802
48,518
12,047
32,986
10,688
17,652
Total waste tonnes per day
76,137
71,372
71,851
79,453
95,941
93,176
92,858
Strip ratio (waste:ore)
2.1
1.98
2.36
2.48
6.10
4.36
5.10
Tonnes milled per calendar day
17,534
16,549
16,962
20,668
19,725
21,117
24,500
Gold grade milled (g/t)
1.08
1.24
1.21
1.42
1.19
1.15
1.14
Gold recovery (%)
81
87
87
89
90
93
91
Mill availability (%)
77
74
76
80
89
88
88
Gold production (oz)
39,325
55,219
55,538
77,202
61,557
66,013
75,080
Gold eq. production1 (oz)
40,016
55,984
56,275
78,074
62,278
66,765
76,092
- Gold equivalent ounces for Rainy River include silver ounces
produced converted to a gold equivalent based on a ratio of the
average spot market prices for the commodities for each period. The
ratio for Q3 2019 was calculated based on average spot market
prices of $1,474 per gold ounce and $17.02 per silver ounce and
includes 87,705 ounces of silver
- The mine reported gold equivalent production of 76,092 ounces
(75,080 ounces of gold and 87,705 ounces of silver) for the quarter
and is well positioned to achieve annual production guidance of
between 250,000 to 275,000 gold equivalent ounces. Ore production
during the quarter included planned lower grade ore from Phase 2 as
well as remaining higher-grade ore from Phase 1, as mining
operations continued the transition from Phase 1 to Phase 2 of the
mine plan. As the ore from Phase 1 is now mined out as planned,
grades mined in the fourth quarter are expected to decline and
average between 0.8 and 1.0 grams per tonne.
- During the quarter, approximately 1.7 million ore tonnes and
8.5 million waste tonnes (including 1.6 million capitalized waste
tonnes) were mined from the open pit at an average strip ratio of
5.1:1 as Phase 2 waste stripping continued to be prioritized during
the quarter. Additionally, 2.6 million tonnes of out-pit material
were mined during the quarter for use in the planned dam raises
over the balance of the year.
- Mill throughput for the quarter averaged 24,500 tonnes per day,
the first full quarter the mill operated at the target range of
24,000 tonnes per day. Mill availability for the quarter averaged
88%, achieving target levels as all major mill upgrades are
substantially completed. As the mill has demonstrated consistent
operations at target levels, there remains potential for further
increases in mill throughput as mill availability improves over the
coming quarters.
- Gold recovery averaged 91% for the quarter, in-line with plan.
Efforts continue to focus on achieving additional circuit
optimizations as well as the commissioning of the gravity circuit,
which could further improve recoveries.
- Construction activities continued during the quarter, which
included the advancement of the Stage 2 Tailings Management Area
(TMA) dam construction, renovation of the recently purchased camp
facility, installation of wick drains for stabilization of the east
waste dump as well as final commissioning of the water treatment
plant. The maintenance and warehouse facilities have been rescoped
to a smaller scale project and construction works are currently
underway.
- During the second half of the quarter, the operation
experienced periods of significant rainfall, averaging more than
60% above the 30-year average for Q3, causing an increase in the
water levels in the TMA. Over the next few weeks and until
construction of Stage 2 of the TMA is completed in late October,
the mine will prioritize management of the water levels in the TMA,
which may cause sporadic interruptions of the processing facilities
and/or reduced throughput. Water is currently being transferred
from the TMA to the water management pond via the recently
commissioned water treatment plant. Rainwater is also being
diverted from site where possible.
- During the quarter, the Company continued to advance a
comprehensive mine optimization study that includes a review of
alternative open pit and underground mining scenarios with the
overall objective of reducing capital and improving the return on
investment over the life of the mine. Results are now scheduled for
release during the first quarter of 2020, but by no later than
mid-February, in conjunction with the Mineral Reserves and
Resources update and the Company’s 2020 guidance estimates.
- As operational performance has improved over the past four
quarters, the focus is now shifting from stabilizing operations to
optimizing operational and cost performance. To support that
initiative, the Company expects to engage an external consultant to
support improved overall equipment efficiencies with the objective
of optimizing open pit mining productivity and unit cost
performance.
- Exploration activities continued in the third quarter, which
included reconnaissance work in the northeastern portion of the
broader Rainy River land package with the objective of identifying
targets for follow up drilling in 2020.
New Afton Mine Operational Highlights
New Afton Mine
Q1 18
Q2 18
Q3 18
Q4 18
Q1 19
Q2 19
Q3 19
Tonnes mined per day (ore and waste)
16,751
13,654
17,105
17,099
15,824
16,357
15,773
Tonnes milled per calendar day
14,333
14,804
14,518
15,012
14,759
14,992
15,572
Gold grade milled (g/t)
0.57
0.50
0.55
0.51
0.50
0.53
0.43
Gold recovery (%)
84
86
85
84
83
83
80
Gold production (oz)
19,998
18,637
19,916
18,778
17,841
19,203
16,007
Copper grade milled (%)
0.94
0.82
0.89
0.82
0.80
0.86
0.76
Copper recovery (%)
83
83
83
83
83
83
84
Copper production (Mlbs)
22.2
20.4
21.7
20.8
19.5
21.6
20.1
Gold equivalent production1 (oz)
73,717
68,340
70,416
67,191
60,986
65,791
52,807
- Gold equivalent ounces for New Afton includes silver ounces and
copper pounds produced converted to a gold equivalent based on a
ratio of the average spot market prices for the commodities for
each period. The ratio for Q3 2019 was calculated based on average
spot market prices of $1,474 per gold ounce, $17.02 per silver
ounce and $2.63 per copper pound and includes 80,454 ounces of
silver.
- The mine produced 52,807 gold equivalent ounces for the quarter
(16,007 ounces of gold, and 20.1 million pounds of copper). The
mine is on track to achieve production guidance of between 215,000
to 245,000 gold equivalent ounces. The lower than planned copper
grades realized for the quarter are expected to continue into the
fourth quarter.
- Mining and milling performance were in-line with planned levels
for the quarter, achieving 15,773 tonnes mined per day and 15,572
tonnes milled per day, at gold recovery of 80% and copper recovery
of 84%.
- The second phase of a planned mill upgrade to address supergene
ore recovery advanced during the quarter. Key equipment has been
installed and commissioning is expected during the fourth
quarter.
- Efforts during the quarter continued to focus on de-risking the
execution of the C-zone project, primarily focusing on the
finalization of the tailings disposal plan and advancing permitting
efforts. An updated life of mine plan is expected to be completed
in the first quarter of 2020. Sub-level cave (SLC) definition,
mining operability and sequencing will continue to be further
defined for potential incorporation of the SLC zone into the mine
plan. During the quarter, exploration-heading development towards
the C-zone commenced and advanced by approximately 720 metres.
- The New Afton delineation and exploration programs are
currently underway and include three key initiatives: 1)
underground drilling to delineate and expand mineral resources
within the SLC zone, located to the east of the planned B3 block
cave; 2) underground exploration drilling of the D-zone target to
test the potential for additional mineral resources down plunge of
the C-zone block cave mineral reserve; and 3) surface geophysical
and geochemical surveys along the prospective Cherry Creek trend
located within three kilometres of the New Afton mill (See May 29,
2019 press release). The regional exploration program advanced
during the quarter and focused on refining follow-up drilling
targets in the Cherry Creek trend area that could be included in
the drilling program, which is currently scheduled to begin in the
fourth quarter.
Upcoming News and Events
- Q3 Financial Results (before-market November 6)
- Updated Life of Mine plans for Rainy River and New Afton (Q1
2020)
Third Quarter Conference Call and Webcast Information The
Company plans to release its third quarter 2019 financial results
before market open on Wednesday, November 6, 2019. A conference
call and webcast will follow at 8:30 a.m. Eastern time to discuss
these results.
- Participants may listen to the webcast by registering on our
website at www.newgold.com or via the following link
https://event.on24.com/wcc/r/2099950/645C5C8DEAA01AEC5FA8DE84F5C02D86
- Participants may also listen to the conference call by calling
toll free 1-866-211-3198, or 1-647-689-6603 outside of the U.S. and
Canada.
- A recorded playback of the conference call will be available
until by calling toll free 1-800-585-8367, or 1-416-621-4642
outside of the U.S. and Canada, passcode 9896765. An archived
webcast will also be available until December 6, 2019 at
www.newgold.com.
About New Gold Inc. New Gold is a Canadian-focused
intermediate gold mining company with a portfolio of two core
producing assets in Canada, the Rainy River and New Afton Mines as
well as the 100% owned Blackwater development project. The Company
also operates the Cerro San Pedro Mine in Mexico (in reclamation).
New Gold’s vision is to build a leading diversified intermediate
gold company based in Canada that is committed to environment and
social responsibility. For further information on the Company,
visit www.newgold.com.
Cautionary Note Regarding Forward-Looking Statements
Certain information contained in this news release, including any
information relating to New Gold’s future financial or operating
performance are “forward looking”. All statements in this news
release, other than statements of historical fact, which address
events, results, outcomes or developments that New Gold expects to
occur are “forward-looking statements”. Forward-looking statements
are statements that are not historical facts and are generally, but
not always, identified by the use of forward-looking terminology
such as “plans”, “expects”, “is expected”, “budget”, “scheduled”,
“targeted”, “estimates”, “forecasts”, “intends”, “anticipates”,
“projects”, “potential”, “believes” or variations of such words and
phrases or statements that certain actions, events or results
“may”, “could”, “would”, “should”, “might” or “will be taken”,
“occur” or “be achieved” or the negative connotation of such terms.
Forward-looking statements in this news release include, among
others, statements with respect to: guidance for production and the
factors contributing to those expected results, including
throughput and recoveries; planned timing of construction of the
tailings management area and its expected capacity; planned
development and exploration activities and timing for 2019 and
future years; and the expected timing of life of mine plans for
Rainy River and New Afton.
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 New Afton Mine, 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.
Technical Information The scientific and technical
information contained herein has been reviewed and approved by Eric
Vinet, Vice President, Technical Services of New Gold. Mr. Vinet is
a Professional Engineer and member of the Ordre des ingénieurs du
Québec. He is a "Qualified Person" for the purposes of NI
43-101.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191010005225/en/
Anne Day Vice President, Investor Relations Direct: +1
(416) 324-6003 Email: anne.day@newgold.com
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