New Gold Inc. (“New Gold” or the “Company”) (TSX and NYSE
American: NGD) reports in-line first quarter operating results
from the Rainy River and New Afton Mines. (All amounts are in US
dollars unless otherwise indicated.)
First Quarter and Recent Operational Highlights
- Total production for the quarter was
123,263 gold equivalent ounces (79,398 ounces of gold, 136,513
ounces of silver and 19.5 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 in-line
gold equivalent production of 62,278 ounces (61,557 ounces of gold
and 60,383 ounces of silver) for the quarter.
- The New Afton Mine delivered another
strong quarter with gold equivalent production of 60,986 ounces
(17,841 ounces of gold and 19.5 million pounds of copper).
- The Company ended the quarter with
available liquidity of approximately $418 million, which includes
$130 million in cash and cash equivalents and $288 million
available under the credit facility, which secures the
implementation of the short-term operational plan.
“We are encouraged by the progress made at Rainy River during
the first quarter as we re-position the operation for efficient and
sustainable mining. Concurrently, we continue to prioritize the
completion of the remaining construction and the optimization of
the life of mine plan in order to position the operation to deliver
free cash flow starting in late 2020,” stated Renaud Adams, CEO.
“The New Afton Mine reported another strong quarter of operating
results as the team further advanced the development of the C-zone.
We are particularly encouraged with the organic growth potential of
the D-zone with the first hole of the exploration drilling program
intersecting 140 metres of mineralization located 360 metres below
the C-zone.”
First Quarter Production Highlights
Gold Eq. Produced1 (oz)
Q1 2019 2019 Guidance Rainy
River2 62,278 250,000 –
275,000 New Afton3 60,986
215,000 – 245,000
Gold Produced (oz)
Q1 2019 Rainy River
61,557 245,000 – 270,000 New
Afton 17,841 55,000 -
65,000
Copper Produced (Mlbs)3
Q1 2019 Total Copper Produced
(Mlbs) 19.5 75 - 85
Rainy River Mine Operational Highlights
Rainy River Mine Q1 18
Q2 18 Q3 18
Q4 18 Q1 2019
Tonnes mined per day (ore and waste) 112,432
107,416 102,290
111,507 111,679 Ore tonnes mined
per day 36,296 36,043
30,439 32,054
15,739 Operating waste tonnes per day
54,321 43,570
23,333 67,406 62,955
Capitalized waste tonnes per day 21,816
27,802 48,518
12,047 32,986 Strip ratio (waste:ore)
2.1 1.98
2.36 2.48 6.10
Tonnes milled per calendar day 17,534
16,549 16,962
20,668 19,725 Gold grade milled (g/t)
1.08 1.24
1.21 1.42 1.19
Gold recovery (%) 81% 87%
87% 89%
90% Mill availability (%) 77%
74% 76% 80%
89% Gold production (oz)
39,325 55,219 55,538
77,202 61,557 Gold eq.
production1 (oz) 40,016
55,984 56,275 78,074
62,278
- The Rainy River Mine reported in-line
gold equivalent production of 62,278 ounces (61,557 ounces of gold
and 60,383 ounces of silver) for the quarter. As previously
disclosed, production during the quarter included planned lower
grades as mining operations continued the transition to phase 2 of
the mine plan.
- During the quarter, approximately 1.4
million ore tonnes and 8.6 million waste tonnes (including 2.97
million capitalized waste tonnes) were mined at an operating strip
ratio of 6.10:1. Mining operations in the quarter were primarily
focused on waste stripping to expose ore for mining in future
quarters. Additionally, 0.9 million tonnes of out-pit non-acid
generating (NAG) material were mined in preparation for planned dam
raises scheduled to begin during the second quarter.
- Mill throughput for the quarter
averaged 19,725 tonnes per calendar day, below the annual target of
22,000-24,000 tonnes per day. The lower average mill throughput was
negatively impacted by the significant buildup of ice in the
crushed ore stockpile above the apron feeders. Average mill
throughput returned to target levels at the end of the
quarter.
- Mill availability for the quarter was a
record 89% (95% in March), despite the planned downtime to replace
the ball mill trunnion and complete repairs.
- Gold recovery improved to average 90%
for the quarter, a significant improvement over the 89% reported in
the fourth quarter when considering the 16% lower average grade
milled. Recoveries are expected to continue to improve throughout
the year to an average of 90-92% for the year.
- Mr. Eric Vinet, Vice President of
Technical Services will assume the position of General Manager of
the Rainy River Mine on an interim basis, following the resignation
of the former General Manager, effective April 10th. Mr. Vinet has
extensive open pit experience, including over 10 years as General
Manager and he will hold the position until such time as a
permanent General Manager is appointed. A search is currently
underway and the Company anticipates filling the position in the
near future.
- A strategic exploration drilling
program is expected to begin in the second quarter that will test
near-mine targets in the Intrepid North area.
New Afton Mine Operational Highlights
New Afton Mine Q1 18
Q2 18 Q3 18
Q4 18 Q1 19
Underground mine tpd 16,751
13,654 17,105
17,099 15,824 Gold grade milled (g/t)
0.57 0.50
0.55 0.51 0.50 Gold
recovery (%) 84.1 85.5
84.7 83.5
83.2 Gold production (oz) 19,998
18,637 19,916
18,778 17,841 Copper grade milled (%)
0.94 0.82
0.89 0.82 0.80
Copper recovery (%) 83.2
83.8 83.0 83.0
83.20 Copper production (Mlbs)
22.2 20.4 21.7
20.8 19.53 Gold equivalent
production1 (oz) 73,717
68,340 70,416 67,191
60,986 1. 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 Q1 2019 was
calculated based on average spot market prices of $1,304 per gold
ounce, $15.57 per silver ounce and $2.82 per copper pound, and
includes 76,130 ounces of silver. All copper is produced by the New
Afton Mine.
- The New Afton mine produced 60,986 gold
equivalent ounces for the quarter, including 17,841 ounces of gold,
and 19.5 million pounds of copper, in line with plan.
- The second phase of a planned mill
upgrade to address supergene ore recovery advanced during the
quarter with commissioning scheduled for the third quarter.
- Development of the B3 zone is currently
underway, which will sustain ongoing production during the C-zone
development period.
- Efforts during the quarter continued to
focus on de-risking the execution of C-zone project, primarily
focusing on the finalization of the tailings disposal plan and
advancing permitting efforts with the objective of updating the
life of mine plan in the latter part of the year. During the
quarter, exploration-heading development towards the C-zone
commenced and advanced by approximately 50 metres.
- An underground drilling program is
currently underway at the New Afton Mine that will test the down
plunge extension of the C-zone (the D-zone) that could increase the
resource inventory and extend mine life beyond 2030. The first hole
of the 10-hole program has been completed, which intersected C-zone
style mineralization over an approximate 140 metre interval (from
662 metres to 802 metres depth) and ended at the planned target of
360 vertical metres below the C-zone (assays pending). A second
drill hole is underway and the program is expected to be completed
by the end of the third quarter.
Upcoming News and Events
- Annual General Meeting of Shareholders
(April 24)
- Q1 Financial Results (before-market
April 25)
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 016). 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: planned
development and exploration activities and timing for 2019 and
future years.
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.
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/20190407005040/en/
Anne DayVice President, Investor RelationsDirect: +1
(416) 324-6003Email: anne.day@newgold.comJulie
TaylorDirector, Corporate Communications and Investor
RelationsDirect: +1 (416) 324-6015Toll free: +1 (888)
315-9715Email: info@newgold.com
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