(All amounts are in U.S. dollars unless otherwise indicated)
May 5, 2021-- New Gold Inc. (“New Gold” or the “Company”)
(TSX and NYSE American: NGD) reports first quarter results for
the Company as of March 31, 2021. The Company will host a
conference call and webcast today at 8:30 am Eastern Time to
discuss the first quarter consolidated results (details are
provided at the end of this news release). For detailed
information, please refer to the Company’s First Quarter
Management’s Discussion and Analysis (MD&A) 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 and the MD&A for more
information.
“The first quarter saw Rainy River deliver to plan and I am
proud of the progress New Afton has made as it continues to safely
and sequentially ramp-up operations," stated Renaud Adams,
President & CEO. "Planned increases in grade at Rainy River
through the year, and New Afton nearing pre-incident mining rates,
are expected to underpin stronger operational and financial results
in the final three quarters of 2021 such that we remain on-track to
achieve our guidance."
"During the quarter we continued to reinvest in our future, with
exploration programs at both of our assets and strategic
investments in Canadian opportunities. Our financial position is
expected to strengthen with our exposure to gold and copper prices,
and our focus in 2021 remains on further optimizing the performance
at our operations and maximizing free cash flow to enhance our
financial flexibility," added Mr. Adams.
Sustainability and ESG New Gold has four sustainability
focus areas: Indigenous Peoples, Tailings Management, Water and
Climate. New Gold has adapted its sustainability efforts to align
with the most pressing ESG issues facing the Company and the mining
industry. As such, our ESG approach continues to prioritize the
health, safety, and well-being of our people and the people in the
communities in which we operate. The protection of our people is
central to our success as we believe people are our greatest asset.
New Gold is committed to providing training, opportunities, and
progression paths for our teams, and we actively seek to ensure
that we promote diversity within our teams at all levels of the
organization. We have adopted an embedded approach to execute on
our sustainability strategy that aligns with ESG reporting
standards.
Consolidated First Quarter Highlights
- Total production for the first quarter was 96,026 gold
equivalent1 ("gold eq.") ounces (66,650 ounces of gold, 187,224
ounces of silver and 13.8 million pounds of copper).
- Revenues for the quarter were $165 million.
- Operating expense for the quarter was $1,022 per gold eq.
ounce.
- Total cash costs2 for the quarter were $1,067 per gold eq.
ounce.
- All-in sustaining costs2 for the quarter were $1,550 per gold
eq. ounce.
- Average realized gold price2 of $1,788 per ounce.
- Net earnings for the quarter were $15 million($0.02 per
share).
- Adjusted net earnings2 for the quarter were $8 million ($0.01
per share).
- Cash generated from operations for the quarter $53 million
($0.08 per share). Cash generated from operations for the quarter,
before changes in non-cash operating working capital2, was $64
million($0.09 per share).
- At the end of the quarter, the Company had a cash position of
$131 million and a strong liquidity position of $435
million.
Consolidated Financial Highlights
Q1 2021
Q1 2020
Revenue ($M)
164.9
142.3
Net earnings (loss), per share
($)
0.02
(0.04)
Adj. net earnings (loss), per
share ($)2
0.01
(0.03)
Operating cash flow, per share
($)
0.08
0.08
Adj. operating cash flow, per
share ($)2
0.09
0.07
- Revenues for the quarter were $165 million, an increase
compared to the prior-year period due to higher gold and copper
prices, which was partially offset by lower sales volume as
underground operations at New Afton continued to ramp-up during the
quarter following the tragic mud-rush incident in February.
- Operating expenses for the quarter were higher than the
prior-year period due to the strengthening of the Canadian dollar
and costs related to the continued ramp-up of operations at New
Afton.
- Net earnings for the quarter were $15 million ($0.02 per
share), an increase compared to the prior-year period primarily due
to higher revenue, lower depreciation and depletion and a gain on
the revaluation of the Rainy River gold stream obligation and the
New Afton free cash flow obligation to the Ontario Teacher's
Pension Plan as a result of an increase in discount rates.
- Adjusted net earnings2 for the quarter were $8 million ($0.01
per share), an increase compared to the prior-year period primarily
due to higher revenue and lower depreciation and depletion.
Consolidated Operational Highlights
Q1 2021
Q1 2020
Gold eq. production (ounces)1
96,026
103,435
Gold production (ounces)
66,650
66,790
Copper production (Mlbs)
13.8
18.5
Average realized gold price, per
ounce2
1,788
1,458
Average realized copper price,
per pound2
3.83
2.56
Operating expense, per gold eq.
ounce
1,022
864
Total cash costs, per gold eq.
ounce2
1,067
916
Depreciation and depletion, per
gold eq. ounce
498
507
All-in sustaining costs, per gold
eq. ounce2
1,550
1,446
Sustaining capital and sustaining
leases ($M)2
37.9
49.1
Growth capital ($M)2
18.5
19.0
Rainy River
Rainy River Operational Highlights
Rainy River Mine
Q1 2021
Q1 2020
Gold eq. production (ounces)1
56,513
51,106
Gold eq. sold (ounces)1
53,577
53,538
Gold production (ounces)
54,656
50,381
Gold sold (ounces)
51,796
52,782
Average realized gold price, per
ounce2
1,786
1,455
Operating expense, per gold eq.
ounce
1,006
1,060
Total cash costs, per gold eq.
ounce2
1,006
1,060
Depreciation and depletion, per
gold eq. ounce
635
661
All-in sustaining costs, per gold
eq. ounce2
1,586
1,755
Sustaining capital and sustaining
leases ($M)2
29.3
35.7
Growth capital ($M)2
1.3
0.1
Rainy River Operating Key Performance Indicators
Rainy River Mine (Open Pit
Mine only)
FY 2019
Q1 2020
Q2 2020
Q3 2020
Q4 2020
Q1 2021
Tonnes mined per day (ore and
waste)
118,404
127,684
126,512
145,701
158,638
150,767
Ore tonnes mined per day
18,712
26,012
23,101
36,515
42,918
35,681
Operating waste tonnes per
day
73,702
75,596
72,575
62,818
73,921
65,643
Capitalized waste tonnes per
day
25,990
26,077
30,836
46,368
41,799
49,442
Total waste tonnes per day
99,692
101,673
103,411
109,186
115,720
115,085
Strip ratio (waste:ore)
5.33
3.91
4.48
2.99
2.70
3.23
Tonnes milled per calendar
day
21,980
18,441
23,880
26,998
26,999
26,301
Gold grade milled (g/t)
1.08
1.03
0.78
0.88
0.93
0.80
Gold recovery (%)
91
90
89
89
90
89
Mill availability (%)
88
91
90
90
94
89
Gold production (ounces)
253,772
50,381
48,800
63,004
66,734
54,656
Gold eq. production (ounces)1
257,051
51,106
49,633
64,221
68,241
56,513
- Rainy River has implemented measures to mitigate and limit the
spread of COVID-19 and to protect the well-being of its employees,
contractors, their families, local communities, and other
stakeholders. Measures include on-site testing and the use of
contact tracing by the site team and through Public Health to
isolate any infected individuals and limit further exposure. There
are currently two active cases at the Rainy River Mine. All prior
cases (including the ten individuals referenced in the April 21
news release, all of whom were confirmed as COVID-positive by the
Northwestern Health Unit) have recovered following the applicable
quarantine period. Further information on the Company’s response to
COVID-19 is available via the following link:
https://newgold.com/covid-19/.
- First quarter gold eq.1 production was 56,513 ounces (54,656
ounces of gold and 133,730 ounces of silver). Lower grades were
expected during the quarter as mining operations were focused on
Phase 3 stripping to bring pit walls to the final pit limit. During
the second half of the year, grades are expected to increase as the
mine returns to Phase 2 area of the pit. The increase compared to
the prior-year period is due to higher throughput.
- Operating expense and total cash costs2 were $1,006 per gold
eq. ounce for the quarter, a decrease over the prior-year period
primarily due to improved operational performance, partially offset
by the strengthening of the Canadian dollar.
- Sustaining capital and sustaining lease2 payments for the
quarter were $29 million, including $13 million of capitalized
mining costs. The decrease compared to the prior-year period is
mainly due to deferred construction capital programs completed in
2020. Sustaining capital spend during the quarter primarily
included advancement of the planned annual tailings dam raise and
capital maintenance.
- All-in sustaining costs2 were $1,586 per gold eq. ounce for the
quarter, a decrease over the prior-year period primarily due to
lower sustaining capital spend.
- Growth capital2 for the quarter $1 million, relating to the
development of the underground Intrepid zone. At the end of the
quarter, development of the decline towards the Intrepid
underground ore zone had advanced 650 metres. The first ore level
was accessed and approximately 155 metres of development in ore was
completed with tonnes and grades mined reconciling with the block
model and approximately 16,000 tonnes of development ore at 1.20
grams per tonne has been stockpiled.
- During the quarter, the open pit mine achieved 150,767 tonnes
per day, a decrease over the prior quarter, due to lower drilling
rates as a result of extreme winter weather conditions, but in-line
with the 2021 target of ~151,000 tonnes per day. Approximately 3.2
million ore tonnes and 10.4 million waste tonnes (including 4.4
million capitalized waste tonnes) were mined from the open pit at
an average strip ratio of 3.23:1. During the second half of the
year, the strip ratio is expected to decrease as operations return
to Phase 2 area of the pit.
- The mill processed 26,301 tonnes per day for the quarter,
slightly above plan and higher than the prior-year period. The mill
continued to process ore directly supplied by the open pit combined
with ore from the medium grade stockpile and processed an average
grade of 0.80 grams per tonne at a gold recovery of 89%. Mill
availability for the quarter averaged 89%, lower than the prior
quarter due to planned maintenance activities.
New Afton
New Afton Operational Highlights
New Afton Mine
Q1 2021
Q1 2020
Gold eq. production (ounces)1
39,512
52,329
Gold eq. sold (ounces)1
38,241
50,398
Gold production (ounces)
11,994
16,409
Gold sold (ounces)
11,744
15,991
Copper production (Mlbs)
13.8
18.5
Copper sold (Mlbs)
13.3
17.7
Average realized gold price, per
ounce2
1,799
1,464
Average realized copper price,
per pound2
3.83
2.56
Operating expense, per gold eq.
ounce
1,046
655
Total cash costs, per gold eq.
ounce2
1,153
762
Depreciation and depletion, per
gold eq. ounce
296
334
All-in sustaining costs, per gold
eq. ounce2
1,388
1,033
Sustaining capital and sustaining
leases ($M)2
8.5
13.3
Growth capital ($M)2
17.2
10.8
New Afton Operating Key Performance Indicators
New Afton Mine
FY 2019
Q1 2020
Q2 2020
Q3 2020
Q4 2020
Q1 2021
Tonnes mined per day (ore and
waste)
15,620
16,727
15,358
17,249
17,259
11,395
Tonnes milled per calendar
day
15,300
15,377
14,240
15,483
15,358
13,564
Gold grade milled (g/t)
0.47
0.45
0.46
0.44
0.46
0.39
Gold recovery (%)
82
81
81
80
79
79
Gold production (ounces)
68,785
16,409
15,494
15,955
16,362
11,994
Copper grade milled (%)
0.78
0.73
0.72
0.71
0.73
0.64
Copper recovery (%)
83
82
83
82
81
80
Copper production (Mlbs)
79.4
18.5
16.9
18.2
18.5
13.8
Mill availability (%)
97
98
92
98
99
96
Gold eq. production (ounces)1
229,091
52,329
48,446
51,315
52,326
39,512
- New Afton has implemented measures to mitigate and limit the
spread of COVID-19 and to protect the well-being of its employees,
contractors, their families, local communities, and other
stakeholders. There are currently no active cases at the New Afton
Mine. Further information on the Company’s response to COVID-19 is
available via the following link:
https://newgold.com/covid-19/.
- First quarter gold eq.1 production was 39,512 ounces (11,994
ounces of gold, and 13.8 million pounds of copper). The decrease
compared to the prior-year period is due to lower grades and lower
throughput as a result of the mud rush incident.
- Operating expense and total cash costs2 for the quarter were
$1,046 and $1,153 per gold eq. ounce, respectively. Operating
expense and total cash costs2 per gold eq. ounce have increased
compared to the prior-year period as operations were impacted due
to the tragic mud rush incident that occurred in February and the
strengthening of the Canadian dollar.
- Sustaining capital and sustaining lease2 payments for the
quarter were $8 million, primarily related to B3 mine development
and the advancement of the planned tailings dam raise.
- All-in sustaining costs2 were $1,388 per gold eq. ounce for the
quarter, an increase over the prior-year period due to lower gold
and copper sales volumes and higher total cash costs.
- Growth capital2 was $17 million for the quarter, primarily
related to C-Zone development and the TAT project.
- During the quarter, C-Zone development advanced by
approximately 820 metres and the project remains on track.
- The C-Zone permit process was initiated with the
pre-application package submitted during the first quarter.
- The underground mine averaged 11,395 tonnes per day for the
quarter, lower than previous quarters as underground operations
continued to ramp-up during the quarter following the tragic
mud-rush incident in February. Mining rates increased in March,
averaging approximately 16,200 tonnes per day, near pre-incident
mining rates.
- Upon the receipt of the Mines Act permit, which is expected
later this quarter, B3 production will commence and ramp-up over
the year as more draw points become accessible.
- During the quarter, the mill averaged 13,564 tonnes per day,
and is currently incorporating the current surface stockpiles to
supplement the overall lower tonnes mined. The mill processed lower
than average gold and copper grades of 0.39 grams per tonne gold
and 0.64% copper, respectively, with gold and copper recoveries of
79% and 80%, respectively.
First Quarter Conference Call and Webcast The Company
will host a webcast and conference call today at 8:30 am Eastern
Time to discuss the Company's first quarter consolidated
results.
- Participants may listen to the webcast by registering on our
website at www.newgold.com or via the following link
https://onlinexperiences.com/Launch/QReg/ShowUUID=86F834BF-D9B7-4993-A7DA-B27454E7FA65
- Participants may also listen to the conference call by calling
toll free 1-833-350-1329, or 1-236-389-2426 outside of the U.S. and
Canada, passcode 2491156
- A recorded playback of the conference call will be available
until June 5, 2021 by calling toll free 1-800-585-8367, or
1-416-621-4642 outside of the U.S. and Canada, passcode 2491156. An
archived webcast will also be available until June 5, 2021 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 gold mine, and the New
Afton copper-gold mine. The Company also holds an 8% gold stream on
the Artemis Gold Blackwater project located in Canada, a 6% equity
stake in Artemis, and other Canadian-focused investments. The
Company also owns 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 the
environment and social responsibility. For further information on
the Company, visit www.newgold.com.
Non-GAAP Financial Performance Measures
Total Cash Costs per Gold eq. Ounce “Total cash costs per gold
equivalent ounce” is a non-GAAP financial performance measure that
is a common financial performance measure in the gold mining
industry but does not have any standardized meaning under IFRS and
therefore may not be comparable to similar measures presented by
other issuers. New Gold reports total cash costs on a sales basis
and not on a production basis. The Company believes that, in
addition to conventional measures prepared in accordance with IFRS,
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. New Gold believes that this measure, along with sales, is a
key indicator of the Company’s ability to generate operating
earnings and cash flow from its mining operations.
This measure is intended to provide additional information only
and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS. This
measure is not necessarily indicative of cash generated from
operations under IFRS or operating costs presented under IFRS.
Total cash cost figures are calculated in accordance with a
standard developed by The Gold Institute, a worldwide association
of suppliers of gold and gold products that ceased operations in
2002. Adoption of the standard is voluntary and the cost measures
presented may not be comparable to other similarly titled measures
of other companies. Total cash costs include mine site operating
costs such as mining, processing and administration costs,
royalties, production taxes, but are exclusive of amortization,
reclamation, capital and exploration costs. Total cash costs are
then divided by gold equivalent ounces sold to arrive at the total
cash costs per equivalent ounce sold.
In addition to gold the Company produces copper and silver. Gold
equivalent ounces of copper and silver produced or sold in a
quarter are computed using a consistent ratio of copper and silver
prices to the gold price and multiplying this ratio by the pounds
of copper and silver ounces produced or sold during that
quarter.
Notwithstanding the impact of copper and silver sales, as the
Company is focused on gold production, New Gold aims to assess the
economic results of its operations in relation to gold, which is
the primary driver of New Gold’s business. New Gold believes this
metric is of interest to its investors, who invest in the Company
primarily as a gold mining business. To determine the relevant
costs associated with gold equivalent ounces, New Gold believes it
is appropriate to reflect all operating costs incurred in its
operations.
All-In Sustaining Costs per Gold eq. Ounce
“All-in sustaining costs per gold equivalent ounce” is a
non-GAAP financial performance measure that does not have any
standardized meaning under IFRS and therefore may not be comparable
to similar measures presented by other issuers. New Gold calculates
"all-in sustaining costs per gold equivalent ounce" based on
guidance announced by the World Gold Council (“WGC”) in September
2013. The WGC is a non-profit association of the world’s leading
gold mining companies established in 1987 to promote the use of
gold to industry, consumers and investors. The WGC is not a
regulatory body and does not have the authority to develop
accounting standards or disclosure requirements. The WGC has worked
with its member companies to develop a measure that expands on IFRS
measures to provide visibility into the economics of a gold mining
company. Current IFRS measures used in the gold industry, such as
operating expenses, do not capture all of the expenditures incurred
to discover, develop and sustain gold production. New Gold believes
that "all-in sustaining costs per gold equivalent ounce" provides
further transparency into costs associated with producing gold and
will assist analysts, investors, and other stakeholders of the
Company in assessing its operating performance, its ability to
generate free cash flow from current operations and its overall
value. In addition, the Compensation Committee of the Board of
Directors uses "all-in sustaining costs", together with other
measures, in its Company scorecard to set incentive compensation
goals and assess performance.
"All-in sustaining costs per gold equivalent ounce" is intended
to provide additional information only and does not have any
standardized meaning under IFRS and may not be comparable to
similar measures presented by other mining companies. It should not
be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. The measure is not
necessarily indicative of cash flow from operations under IFRS or
operating costs presented under IFRS.
New Gold defines "all-in sustaining costs per gold equivalent
ounce" as the sum of total cash costs, net capital expenditures
that are sustaining in nature, corporate general and administrative
costs, capitalized and expensed exploration that is sustaining in
nature, lease payments that are sustaining in nature, and
environmental reclamation costs, all divided by the total gold
equivalent ounces sold to arrive at a per ounce figure. The
“Sustaining Capital Expenditure Reconciliation” table below
reconciles New Gold’s sustaining capital to its cash flow
statement. The definition of sustaining versus non-sustaining is
similarly applied to capitalized and expensed exploration costs and
lease payments. Exploration costs and lease payments to develop new
operations or that relate to major projects at existing operations
where these projects are expected to materially increase production
are classified as non-sustaining and are excluded. Gold equivalent
ounces of copper and silver produced or sold in a quarter are
computed using a consistent ratio of copper and silver prices to
the gold price and multiplying this ratio by the pounds of copper
and silver ounces produced or sold during that quarter.
Costs excluded from all-in sustaining costs are non-sustaining
capital expenditures, non-sustaining lease payments and exploration
costs, financing costs, tax expense, and transaction costs
associated with mergers, acquisitions and divestitures, and any
items that are deducted for the purposes of adjusted earnings.
Sustaining Capital and Sustaining Leases
"Sustaining capital" and "sustaining lease" are non-GAAP
financial performance measures that do not have any standardized
meaning under IFRS and therefore may not be comparable to similar
measures presented by other issuers. New Gold defines "sustaining
capital" as net capital expenditures that are intended to maintain
operation of its gold producing assets. Similarly, a "sustaining
lease" is a lease payment that is sustaining in nature. To
determine "sustaining capital" expenditures, New Gold uses cash
flow related to mining interests from its statement of cash flows
and deducts any expenditures that are capital expenditures to
develop new operations or capital expenditures related to major
projects at existing operations where these projects will
materially increase production. Management uses "sustaining
capital" and "sustaining lease", to understand the aggregate net
result of the drivers of all-in sustaining costs other than total
cash costs. These measures are intended to provide additional
information only and should not be considered in isolation or as
substitutes for measures of performance prepared in accordance with
IFRS.
Growth Capital
"Growth capital" is a non-GAAP financial performance measure
that does not have any standardized meaning under IFRS and
therefore may not be comparable to similar measures presented by
other issuers. New Gold considers non-sustaining capital costs to
be “growth capital”, which are capital expenditures to develop new
operations or capital expenditures related to major projects at
existing operations where these projects will materially increase
production. To determine "growth capital" expenditures, New Gold
uses cash flow related to mining interests from its statement of
cash flows and deducts any expenditures that are capital
expenditures that are intended to maintain operation of its gold
producing assets. Management uses "growth capital" to understand
the cost to develop new operations or related to major projects at
existing operations where these projects will materially increase
production. This measure is intended to provide additional
information only and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS.
The following tables reconcile the above non-GAAP measures to
the most directly comparable IFRS measure on an aggregate
basis.
Consolidated OPEX, Cash Cost and All-in Sustaining Costs
Reconciliation
Three months ended March
31
(in millions of U.S. dollars,
except where noted)
2021
2020
CONSOLIDATED OPEX, CASH COST
AND ALL-IN SUSTAINING COSTS RECONCILIATION
Operating expenses
93.9
89.8
Gold equivalent ounces sold1
91,818
103,936
Operating expenses per gold
equivalent ounce sold ($/ounce)
1,022
864
Operating expenses
93.9
89.8
Treatment and refining charges on
concentrate sales
4.1
5.4
Total cash costs
98.0
95.2
Gold equivalent ounces sold1
91,818
103,936
Total cash costs per gold
equivalent ounce sold ($/ounce)2
1,067
916
Sustaining capital
expenditures2
35.1
46.3
Sustaining exploration -
expensed
0.3
—
Sustaining leases2
2.7
2.9
Corporate G&A including
share-based compensation
3.8
4.2
Reclamation expenses
2.3
1.8
Total all-in sustaining costs
142.3
150.4
Gold equivalent ounces sold1
91,818
103,936
All-in sustaining costs per gold
equivalent ounce sold ($/ounce)2
1,550
1,446
Adjusted Net Earnings/(Loss)
“Adjusted net earnings” and “adjusted net earnings per share”
are non-GAAP financial performance measures that do not have any
standardized meaning under IFRS and therefore may not be comparable
to similar measures presented by other issuers. "Adjusted net
earnings" and "adjusted net earnings per share" exclude the
following from net earnings: Inventory write downs, Items included
in “Other gains and losses” as per Note 3 of the Company’s
consolidated financial statements; and Certain non-recurring items.
Net earnings have been adjusted, including the associated tax
impact, for the group of costs in “Other gains and losses” on the
condensed consolidated income statements. Key entries in this
grouping are: the fair value changes for the gold stream
obligation; fair value changes for the free cash flow interest
obligation; the gold and copper option contracts; foreign exchange
forward contracts; foreign exchange gain or loss, loss on disposal
of assets and fair value changes in investments. The adjusted
entries are also impacted for tax to the extent that the underlying
entries are impacted for tax in the unadjusted net earnings.
The Company uses "adjusted net earnings" for its own internal
purposes. Management’s internal budgets and forecasts and public
guidance do not reflect the items which have been excluded from the
determination of "adjusted net earnings". Consequently, the
presentation of "adjusted net earnings" enables investors to better
understand the underlying operating performance of the Company's
core mining business through the eyes of management. Management
periodically evaluates the components of "adjusted net earnings"
based on an internal assessment of performance measures that are
useful for evaluating the operating performance of New Gold's
business and a review of the non-GAAP financial performance
measures used by mining industry analysts and other mining
companies. "Adjusted net earnings" and "adjusted net earnings per
share" are intended to provide additional information only and
should not be considered in isolation or as substitutes for
measures of performance prepared in accordance with IFRS. These
measures are not necessarily indicative of operating profit or cash
flows from operations as determined under IFRS. The following table
reconciles these non-GAAP financial performance measures to the
most directly comparable IFRS measure.
Three months ended March
31
(in millions of U.S. dollars,
except where noted)
2021
2020
ADJUSTED NET EARNINGS (LOSS)
RECONCILIATION
Earnings (loss) before taxes
19.0
(23.1)
Other (gains) losses
(8.7)
3.9
Inventory write-down
—
3.0
Adjusted net earnings (loss)
before taxes
10.3
(16.2)
Income tax (expense) recovery
(3.9)
(5.2)
Income tax adjustments
1.7
3.6
Adjusted income tax recovery
(expense)
(2.2)
(1.6)
Adjusted net earnings (loss)2
8.1
(17.8)
Adjusted earnings (loss) per
share (basic and diluted)2
0.01
(0.03)
Cash Generated from Operations, before Changes in Non-Cash
Operating Working Capital
“Cash generated from operations, before changes in non-cash
operating working capital” is a non-GAAP financial performance
measure that does not have any standardized meaning under IFRS and
therefore may not be comparable to similar measures presented by
other issuers. Other companies may calculate this measure
differently and this measure is unlikely to be comparable to
similar measures presented by other companies. "Cash generated from
operations, before changes in non-cash operating working capital"
excludes changes in non-cash operating working capital. New Gold
believes this non-GAAP financial measure provides further
transparency and assists analysts, investors and other stakeholders
of the Company in assessing the Company’s ability to generate cash
from its operations before temporary working capital changes.
Cash generated from operations, before non-cash changes in
working capital is intended to provide additional information only
and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS. This
measure is not necessarily indicative of operating profit or cash
flows from operations as determined under IFRS. The following table
reconciles this non-GAAP financial performance measure to the most
directly comparable IFRS measure.
Three months ended March
31
(in millions of U.S. dollars)
2021
2020
CASH RECONCILIATION
Cash generated from
operations
53.3
51.3
Add back (deduct): Change in
non-cash operating working capital
10.4
(4.2)
Cash generated from operations,
before changes in non-cash operating working capital2
63.7
47.1
Average Realized Price
“Average realized price per ounce of gold sold” is a non-GAAP
financial performance measure that does not have any standardized
meaning under IFRS and therefore may not be comparable to similar
measures presented by other issuers. Other companies may calculate
this measure differently and this measure is unlikely to be
comparable to similar measures presented by other companies.
Management uses this measure to better understand the price
realized in each reporting period for gold sales. “Average realized
price per ounce of gold sold” is intended to provide additional
information only and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS. The following tables reconcile this non-GAAP financial
performance measure to the most directly comparable IFRS measure on
an aggregate and mine-by-mine basis.
Three months ended March
31
(in millions of U.S. dollars,
except where noted)
2021
2020
TOTAL AVERAGE REALIZED
PRICE
Revenue from gold sales
112.4
98.4
Treatment and refining charges on
gold concentrate sales
1.2
1.8
Gross revenue from gold sales
113.6
100.2
Gold ounces sold
63,539
68,773
Total average realized price per
gold ounce sold ($/ounce)2
1,788
1,458
For additional information with respect to the non-GAAP measures
used by the Company, including reconciliation to the nearest IFRS
measures, refer to the detailed non-GAAP performance measure
disclosure in the MD&A for the three months ended March 31,
2021 filed at www.sedar.com and on EDGAR at www.sec.gov.
Technical Information
The scientific and technical information contained herein has
been reviewed and approved by Eric Vinet, Senior Vice President,
Operations 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 National Instrument 43-101 – Standards
of Disclosure for Mineral Projects.
End Notes
- Total gold eq. ounces include silver and copper produced/sold
converted to a gold eq. based on a ratio of $1,800 per gold ounce,
$25.00 per silver ounce and $3.50 per copper pound used for 2021
guidance estimates. All copper is produced/sold by the New Afton
Mine. Gold eq. ounces for Rainy River in Q1 2021 includes
production of 133,730 ounces of silver (128,260 ounces sold)
converted to a gold eq. based on a ratio of $1,800 per gold ounce
and $25.00 per silver ounce used for 2021 guidance estimates. Gold
eq. ounces for New Afton in Q1 2021 includes 13.8 million pounds of
copper produced (13.3 million pounds sold) and produced 53,494
ounces of silver (48,328 ounces of silver sold) converted to a gold
eq. based on a ratio of $1,800 per gold ounce, 3.50 per copper
pound and $25.00 per silver ounce used for 2021 guidance
estimates.
- "Total cash costs", "all-in sustaining costs", "adjusted net
earnings/(loss)", "sustaining capital and sustaining leases”,
“growth capital”, “cash generated from operations” and “average
realized gold/copper price per ounce/pound” are all non-GAAP
financial performance measures that are used in this press release.
These measures do not have any standardized meaning under IFRS and
therefore may not be comparable to similar measures presented by
other issuers. For more information about these measures, why they
are used by the Company, and a reconciliation to the most directly
comparable measure under IFRS, see the “Non-GAAP Financial
Performance Measures" section of this news release.
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 Company’s planned increases
in grade at the Rainy River Mine and New Afton Mine; plans to
generate free cash flow; anticipated operational and financial
results during the remainder of 2021; the strengthening in the
Company’s financial position in future periods; the Company’s plans
regarding diesel based GHG emission reductions; the anticipated
effect of the construction of the TAT plant; the Company’s return
to the Phase 2 area of the pit at the Rainy River Mine; the
Company’s strip ratio at the Rainy River Mine; and the commencement
and ramping up of B3 zone production at the New Afton Mine.
All forward-looking statements in this news release are based on
the opinions and estimates of management that, while considered
reasonable as at the date of this press release in light of
management’s experience and perception of current conditions and
expected developments, are inherently 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 MD&A, its most recent
annual information form and technical reports on the Rainy River
Mine and New Afton Mine 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 other than as set out herein; (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 and Rainy River
Mine being consistent with New Gold’s current expectations; (8) all
required permits, licenses and authorizations being obtained from
the relevant governments and other relevant stakeholders within the
expected timelines; (9) there being no significant disruptions to
the Company’s workforce at either the Rainy River or New Afton Mine
due to cases of COVID-19 or any required self-isolation
requirements (due, among other things, to cross-border travel to
the United States or any other country); (10) the responses of the
relevant governments to the COVID-19 outbreak being sufficient to
contain the impact of the COVID-19 outbreak; (11) there being no
material disruption to the Company’s supply chains and workforce
that would interfere with the Company’s anticipated course of
action at the Rainy River Mine and the systematic ramp-up of
operations; (12) the long-term economic effects of the COVID-19
outbreak not having a material adverse impact on the Company’s
operations or liquidity position; and (13) Artemis Gold Inc. being
able to complete the remaining C$50 million cash payment due on
August 24, 2021 for the acquisition of the Blackwater project.
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;
volatility in the market price of the Company’s securities; hedging
and investment related risks; dependence on the Rainy River Mine
and New Afton Mine; 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;
risks related to construction, including changing costs and
timelines; adequate infrastructure; 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; global economic and financial
conditions; risks relating to New Gold’s debt and liquidity; the
adequacy of internal and disclosure controls; taxation; impairment;
conflicts of interest; risks relating to climate change; 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; risks relating to proposed
acquisitions and the integration thereof; information systems
security threats; diminishing quantities or grades of mineral
reserves and mineral resources; competition; loss of, or inability
to attract, 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; disruptions to the Company’s workforce at either the
Rainy River Mine or the New Afton Mine, or both, due to cases of
COVID-19 or any required self-isolation (due to cross-border
travel, exposure to a case of COVID-19 or otherwise); the responses
of the relevant governments to the COVID-19 outbreak not being
sufficient to contain the impact of the COVID-19 outbreak;
disruptions to the Company’s supply chain and workforce due to the
COVID-19 outbreak; an economic recession or downturn as a result of
the COVID-19 outbreak that materially adversely affects the
Company’s operations or liquidity position; there being further
shutdowns at the Rainy River or New Afton Mines; the Company not
being able to complete its construction projects at the Rainy River
Mine or the New Afton Mines on the anticipated timeline or at all;
the Company not being able to complete the exploration drilling
program to be launched at the Rainy River Mine and Cherry Creek on
the anticipated timeline or at all; Artemis Gold Inc. not being
able to make the remaining C$50 million cash payment due in
connection with its acquisition of the Blackwater Project on August
24, 2021. In addition, there are risks and hazards associated with
the business of mineral exploration, development and mining,
including environmental events and hazards, industrial accidents,
unusual or unexpected formations, pressures, cave-ins, flooding and
gold bullion losses (and the risk of inadequate insurance or
inability to obtain insurance to cover these risks) as well as
“Risk Factors” included in New Gold’s most recent 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 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210505005129/en/
Ankit Shah Vice President, Strategy & Business
Development Direct: +1 (416) 324-6027 Email:
ankit.shah@newgold.com
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