February 10, 2021 – New Gold Inc. (“New Gold” or the
“Company”) (TSX and NYSE American: NGD) provides annual
operational outlook for the Rainy River Mine and updated Mineral
Reserves and Mineral Resources as of December 31, 2020. Annual
operational estimates for the New Afton Mine will be released at a
later date. All amounts are in U.S. dollars unless otherwise
indicated.
Following the tragic underground mud-rush event at the New Afton
Mine that occurred on February 2, 2021, the release of annual
operational estimates for the New Afton Mine will be slightly
delayed allowing the Company sufficient time to advance a more
fulsome analysis and consider the potential impact on our 2021
production plan as additional information from our investigation
becomes available. As noted in the press release dated February 8,
2021, the mine has restarted some underground activities and is
currently operating at approximately 3,000 to 5,000 tonnes per day.
The mill is currently processing ore from the live pile, which
contains approximately 100,000 tonnes at 0.65-0.75% copper and
0.40-0.50 grams per tonne gold. The intermediate-grade surface
stockpile contains approximately 1.4 million tonnes at 0.35-0.45%
copper and 0.20-0.30 grams per tonne gold.
“We will continue to prioritize the health, safety and
well-being of our workforce as we continue to safely and
sequentially ramp-up underground operations at the New Afton Mine.
As we consider the impact on the 2021 mine plan, we have
flexibility to adjust the 2021 mine plan, including the optionality
of supplementing mill feed for a period of time from our surface
stockpiles,” stated Renaud Adams, President and CEO. “At the Rainy
River Mine, the Company will continue to focus on optimizing our
operational and cost performance with the objective of
outperforming the 2021 technical report estimates as we build on
the many accomplishments achieved over the past two years. We will
also evaluate the potential expansion of the underground mine
beyond the current life of mine, focusing on organic growth
opportunities and advancing the exploration program.”
Sustainability and ESG
At Rainy River we continue to engage with our Indigenous
partners on our environmental and social impacts. We take a
collaborative approach to environmental monitoring through the
development of our Environmental Monitoring Board, which is made up
of Community members and members of the Rainy River team. We
understand our approach to the environment is important to
surrounding communities and we incorporate traditional knowledge
into our monitoring as much as possible to ensure we respect the
shared knowledge of our partners. During the year we will be
focusing on increasing local procurement by working with local
partners to provide business opportunities to more Indigenous
companies. Economic development for the surrounding area continues
to be the priority and we know that through business development
opportunities and increased local employment we can have a
long-term positive impact for our partners, creating more resilient
communities.
2021 Rainy River Mine Operational Outlook
The operational outlook for the Rainy River Mine assumes that
our operations will continue without any significant
COVID-19-related interruptions. New Gold continues to maintain
preventative measures at all our sites to protect our workforce and
communities, and to mitigate the effects of COVID-19 on our
operations. Any reduction or suspension of our operations due to
COVID-19, could impact our ability to achieve the Rainy River’s
2021 outlook. Please see the Cautionary Note Regarding
Forward-Looking Statements at the end of this news release.
During 2021, the Rainy River Mine will build on the
transformational success that has been achieved, which supports
expected production growth and a decrease in operating and capital
costs over the prior year. The focus in 2021 is to drive further
operational, cost and Mineral Reserves optimization.
Rainy River Operational Estimates
In 2021, the Company will continue to report production on a
gold eq. basis as well as on a per-metal basis. Cash costs and AISC
will be reported on a per gold eq. ounce basis. Guidance has been
prepared assuming $1,800 per gold ounce, $3.50 per pound of copper
and $25 per silver ounce and a foreign exchange rate of 1.28
Canadian dollars to the US dollar (“Guidance Assumptions”).
Rainy River 2021 Guidance Estimates
Rainy River Mine 2021
Operational and Cost Guidance
2021 Operational
Estimates
2021 Guidance
Gold Produced (ounces)
270,000 - 290,000
Gold Eq. Produced (ounces)1
275,000 - 295,000
Cash Costs per gold eq. ounce
1,2
$715 - $795
All-in Sustaining Costs per gold
eq. ounce1,2
$1,125 - $1,225
2021 Capital Investment &
Exploration Expense Estimates
2021 Guidance
Sustaining Capital &
Sustaining Leases ($M)2
$95 - $125
Growth Capital ($M)2
$10 - $15
Exploration Expense ($M)
~$5
- Gold eq. ounces includes
approximately 538,000 to 568,000 ounces of silver.
- Refer to the “Non-GAAP Measures”
section of this news release.
The Company announces its 2021 operational outlook for the Rainy
River Mine with an approximately 22% increase in production. Cash
costs and All-in Sustaining Costs (“AISC”)1 are expected to
decrease over the prior year, primarily due to lower cash costs and
sustaining capital requirements as all deferred construction
capital programs were completed in 2020. Growth capital is expected
to increase over the prior year, primarily related to development
of the underground Intrepid Zone.
- Gold eq. production is expected to increase over the prior year
due to an increase in higher grade tonnes mined and processed as
compared to 2020, which included the impact related to a voluntary
two-week suspension due to COVID-19.
- Cash costs per gold eq. ounce are expected to decrease over the
prior year as production increases and operational cost performance
continues to improve. Operating expense per gold eq. ounce is
expected to be between $715 and $795.
- Sustaining capital is expected to decrease over the prior year
as planned.
- AISC are expected to decrease, primarily due to higher
production, lower cash costs and lower sustaining capital
requirements as compared to the prior year.
- Growth capital is expected to increase over the prior year,
primarily relating to the development of the underground Intrepid
Zone.
- The initial phase of an exploration drilling program focused on
the North East Trend, located approximately 18 kilometers northeast
of the Rainy River Mine was launched in late 2020. This first phase
of exploration drilling will be completed during the first half of
the year and could be expanded based on results.
- During the year, operational and cost performance from the
Rainy River Mine is expected to be in-line with the 2021 estimates
provided in the NI 43-101 Technical Report for the Rainy River Mine
dated March 12, 2020 (the “Rainy River Technical Report”),
which estimate production of approximately 284,000 gold eq. ounces
at AISC of approximately $1,200 per ounce (including equipment
leasing), assuming Guidance Assumptions.
2021 Rainy River Key
Performance Indicators
Key Performance
Indicators
2021
Estimates1
Open pit tonnes mined per day
(ore and waste)
150,000 - 152,000
Strip ratio (waste:ore)
~2.70
Tonnes milled per calendar
day
26,200 - 26,400
Gold grade milled (g/t)
0.98 - 1.02
Gold recovery (%)
90 - 92
1 These estimates are based on
assumptions that, while considered reasonable by the Company 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 significant business, economic and
competitive uncertainties and contingencies. See Cautionary Note
Regarding Forward-Looking Statements for more details.
The Rainy River Mine begins 2021 with both the open pit mine and
mill operating at productivity levels that are in-line with the
estimates in the Rainy River Technical Report and with the
objective of potentially outperforming those estimates.
During the first half of the year, grades are expected to be
lower as the mine plan focuses on Phase 3 waste mining to bring pit
walls to the final pit limit of Phase 3 south. Mining efforts are
expected to return to Phase 2 mining in the second half of the
year, with higher grades expected from the HS, 433 and ODM zones.
Accordingly, the strip ratio is expected to be higher during the
first half of the year and then decline in the second half as waste
stripping activities are completed. The final Phase 4 overburden
stripping is expected to continue to advance in the fourth quarter
and into 2022. The plan considers a sustained average mining rate
of approximately 151,000 tonnes per day. Cash costs and AISC are
expected to be higher in the first half of the year and decrease in
the second half of the year as grades improve and the strip ratio
decreases.
Sustaining capital is expected to be relatively consistent
during the year and is primarily related to waste stripping in the
first half of the year, a Stage 3 dam raise in the second half with
capital parts and components replacement programs throughout the
year.
Growth capital includes the development of the decline towards
the Intrepid underground ore zone that will continue during the
year, with the operation expected to access the first ore level
during the first quarter. The focus in 2021 will be on the
refinement of the long-hole mining methodology and block model and
to consider the potential to bring forward production from the
Intrepid Zone from 2023 to early 2022.
The Company has also released its updated 2020 Mineral Reserve
and Mineral Resources statements, which incorporates the conversion
of approximately 123,000 ounces of Measured and Indicated Resources
(M&I) contained in the Intrepid Zone to Mineral Reserves, using
a higher reserve gold price assumption of $1,400 per ounce.
(Details regarding the Company’s 2020 Mineral Reserves and Mineral
Resources are provided below). As a result, the majority of the
ounces contained within the Intrepid Zone can now be considered for
inclusion in the underground mine plan and because the Intrepid
Zone is independent of the open pit, there is an opportunity to
advance the mining of the Intrepid zone as described above.
The 2019 Mineral Resources included
a significant number of underground resources that were
recategorized from Mineral Reserves to M&I Resources. With the
higher gold price of $1,400 per ounce used for the 2020 Mineral
Reserve estimates, the opportunity exists for a potential
recategorization of a portion of the current M&I Resources as
Mineral Reserves that could potentially expand the underground mine
life beyond 2028. During the year, the Company is expected to
complete an economic study of a potential standalone underground
operation scenario beyond 2028, once all remaining surface
stockpiles are depleted. The study will also consider a reduced
throughput milling scenario that better accommodates the
underground scenario. Based on the results of the study, which
would include the already converted Mineral Reserve ounces from the
Intrepid Zone as well as any further optimizations that may be
achieved in 2021, the Company may consider releasing an enhanced NI
43-101 Technical Report in late 2021 or early 2022.
2021 Financial Outlook
Following key transactions completed in 2020, as well as
improving operational and cost performance, the Company focused on
debt reduction and improved liquidity that supported the transition
to free cash flow. The Company is fully exposed to the stronger
gold price following the expiration of gold option contracts at the
end of 2020. The Company purchased low cost copper put options with
a floor of $3.10 per pound to de-risk the execution of the 2021
C-Zone capital program while remaining fully exposed to higher
copper prices.
The Company’s cash position will be positively impacted by the
receipt of a second C$50 million payment from Artemis Gold Inc.
(“Artemis”) in August 2021, related to the sale of the Blackwater
Project (for more information refer to the Company’s June 9 and
August 24, 2020 news releases). The Company also holds an 8% gold
stream on the Blackwater Project and a 6% equity stake in
Artemis.
During the year, depreciation and depletion is expected to
average between $460 and $540 per gold eq. ounce for the Rainy
River Mine.
As of December 31, 2020, the Company had a cash position of $185
million and a strong liquidity position of approximately $490
million.
Mineral Reserves and Mineral Resources (as at December 31,
2020)
As at December 31, 2020, New Gold is reporting Mineral Reserves
and Mineral Resources as summarized in the table below. Detailed
Mineral Reserve and Mineral Resource tables follow at the end of
this news release.
Mineral Reserves and Mineral
Resources Summary1
As at December 31,
2020
As at December 31,
2019
Gold
koz
Silver
koz
Copper
Mlbs
Gold
koz
Silver
koz
Copper
Mlbs
Proven and Probable Mineral
Reserves
Rainy River
2,598
7,152
-
2,636
6,266
-
Open Pit
1,599
3,518
-
1,748
3,602
-
Underground
672
1,795
-
549
1,034
-
Low grade and stockpile
327
1,839
-
339
1,629
-
New Afton
958
2,670
758
1,005
2,844
802
Blackwater
-
-
-
8,170
60,800
-
Total Proven and Probable
Reserves
3,556
9,822
758
11,811
69,909
802
Measured and Indicated Mineral
Resources (exclusive of Mineral Reserves) (1)
Rainy River
2,005
5,125
-
1,914
5,120
-
Open Pit
187
562
-
245
789
-
Underground
1,818
4,563
-
1,669
4,331
-
New Afton
1,182
4,246
1,003
1,118
3,754
933
Blackwater
-
-
-
1,402
8,915
-
Total Measured and Indicated
Mineral Resources
3,187
9,371
1,003
4,434
17,788
933
Total Inferred Mineral
Resources
412
917
143
754
3,124
121
- Refer to the detailed Mineral
Reserve and Mineral Resource tables that follow at the end of this
press release for the estimates as at December 31, 2020 and the
Company’s Annual Information Form dated March 27, 2020 for
estimates as at December 31, 2019.
- The Mineral Reserves and Mineral
Resources stated above are as at December 31, 2020 and do not
reflect any events subsequent to that date.
Consolidated gold Mineral Reserves decreased by approximately
8.25 million gold ounces as compared to 2019. This decrease
includes approximately 8.17 million gold ounces related to the sale
of the Blackwater Project in August 2020, 253,000 gold ounces of
mining depletion at the Rainy River Mine and approximately 85,000
gold ounces of mining depletion at the New Afton Mine. Mining
depletion was partially offset by approximately 253,000 ounces of
positive resource to reserve conversion from updated mine designs
and operational plans at both mines.
- At the Rainy River Mine, total Mineral Reserves slightly
decreased by approximately 38,000 gold ounces over the prior year,
primarily due to mine depletion that was partially offset by the
conversion of 215,000 gold ounce from Mineral Resources to Mineral
Reserves (92,000 open pit mine plan and 123,000 underground mine
plan) due to updated mine designs and operational plan
optimization. The increase in Mineral Reserves was driven by
updated metal price assumptions and updated cut-off grades for
underground reserves.
- At the New Afton Mine, Mineral Reserves decreased by
approximately 47,000 gold ounces over the prior year as a result of
mine depletion that was partially offset by the addition of 38,000
gold ounces from the C-Zone mine plan optimization.
Consolidated Measured and Indicated Mineral Resources decreased
by approximately 1.2 million gold ounces due to the sale of the
Blackwater Project, partially offset by increased underground
Mineral Resources at the Rainy River and New Afton Mines.
- At the Rainy River Mine Measured and Indicated Mineral
Resources have increased by 91,000 gold ounces due to higher gold
prices and lower cut-off grades applied for underground ore
material.
- Total Measured and Indicated Mineral Resources at the New Afton
Mine increased by approximately 64,000 gold ounces driven by
additional drilling in 2020.
Consolidated Inferred Mineral Resources decreased by
approximately 340,000 gold ounces due the sale of the Blackwater
Project.
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. The Company also holds an 8% gold stream
on the Artemis Gold Blackwater Project located in British Columbia
and a 6% equity stake in Artemis. 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 is “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
plans to grow production and generate free cash flow; the Company’s
production and sales; the Company’s cash costs, all-in sustaining
costs and operational expenses; the Company’s plans to optimize
operations and costs at its assets and plans to extend the life of
mine of the Rainy River Mine; the Company’s plans and efforts to
increase local procurement at the Rainy River Mine and the impact
of economic development efforts for our partners and the local
economy and community; the timing of completion for capital
projects at the Rainy River Mine; the timing and scope of
exploration drilling programs at the Rainy River Mine.
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”), 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) prices of gold, silver, copper and certain
other commodities being approximately consistent with current
levels; (5) 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; (6) prices for
diesel, natural gas, fuel oil, electricity and other key supplies
being approximately consistent with current levels; (7) equipment,
labour and materials costs increasing on a basis consistent with
New Gold’s current expectations; (8) 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, particularly in the context of the outbreak of
COVID-19; (9) 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; (10) there being no new cases of COVID-19 in the
Company’s workforce at either the Rainy River or New Afton Mine and
the assumption that no additional members of the workforce are
expected to be required to self-isolate due to cross-border travel
to the United States or any other country; (11) the responses of
the relevant governments to the COVID-19 outbreak being sufficient
to contain the impact of the COVID-19 outbreak; (12) 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; (13) 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 (14) Artemis Gold Inc. being
able to complete the remaining C$50 million cash payment due on
August 24, 2021 in connection with the sale 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;
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; there being cases of COVID-19 in the
Company’s workforce at either the Rainy River Mine or New Afton
Mine, or both; the Company’s workforce at either the Rainy River
Mine or the New Afton Mine, or both, being required to self-isolate
due to cross-border travel to the United States or any other
country; the responses of the relevant governments to the COVID-19
outbreak not being sufficient to contain its impact; 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 timing described herein 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
timing described herein or at all; Artemis Gold Inc. not being able
to make the remaining C$50 million cash payment due 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 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.
Non-GAAP Financial Performance Measures
All-in sustaining costs (AISC) per gold eq. ounce, cash costs
per gold ounce and per gold eq. ounce, sustaining capital,
sustaining lease and growth capital are non-GAAP financial measures
that do not have a standardized meaning under IFRS and may not be
comparable to similar measures presented by other mining companies.
These measures should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS. The Company believes that these measures, together with
measures determined in accordance with IFRS, provide investors with
an improved ability to evaluate the underlying performance of the
Company. In addition, certain non-GAAP measures are utilized, along
with other measures, in the Company scorecard to set incentive
compensation goals and assess the performance of its
executives.
Cash Costs and Total Cash Costs
“Cash costs”, “cash costs per gold eq. ounce” and “total cash
costs” are non-GAAP financial measures which 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. New Gold reports
total cash costs on a sales basis. The Company believes that
certain investors use this information to evaluate the Company's
performance and ability to generate liquidity through operating
cash flow to fund future capital expenditures and working capital
needs. This measure, along with sales, is considered to be a key
indicator of the Company's ability to generate operating earnings
and cash flow from its mining operations. Total cash costs include
mine site operating costs such as mining, processing and
administration costs, royalties, production taxes, but are
exclusive of amortization, reclamation, capital and exploration
costs. Total cash costs per gold eq. ounce are divided by gold eq.
ounces sold to arrive at a per ounce figure. Unless otherwise
indicated, all total cash cost information in this news release is
on a gold eq. ounce basis. This data is furnished to provide
additional information and is a non-GAAP financial measure. Total
cash costs presented do not have a standardized meaning under IFRS
and may not be comparable to similar measures presented by other
mining companies. It should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS and is not necessarily indicative of cash flow from operations
under IFRS or operating costs presented under GAAP.
All-In Sustaining Costs per Gold eq. Ounce
“All-in sustaining costs per gold eq. ounce” is a non-GAAP
financial measure. Consistent with guidance announced in 2013 by
the World Gold Council, an association of various gold mining
companies from around the world, New Gold defines "all-in
sustaining costs" per ounce as the sum of total cash costs, capital
expenditures that are sustaining in nature, corporate general and
administrative costs, capitalized and expensed exploration that is
sustaining in nature, lease payments that are sustaining in nature,
and environmental reclamation costs, all divided by the ounces of
gold eq. sold to arrive at a per ounce figure.
In addition to gold, the Company produces copper and silver.
Notwithstanding the impact of copper and silver sales, as a Company
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 non-GAAP financial measure provides
further transparency into costs associated with producing gold and
assists analysts, investors and other stakeholders of the Company
in assessing the Company's operating performance, its ability to
generate free cash flow from current operations and its overall
value. This data is furnished to provide additional information and
is a non-GAAP financial measure. All-in sustaining costs presented
do not have a standardized meaning under IFRS and may not be
comparable to similar measures presented by other mining companies.
It should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS and is not
necessarily indicative of cash flow from operations under IFRS or
operating costs presented under IFRS.
Sustaining Capital and Sustaining Lease
“Sustaining capital” and “sustaining lease” are non-GAAP
financial measures. New Gold defines sustaining capital as net
capital expenditures that are intended to maintain operation of its
gold producing assets. A sustaining lease is similarly a capital
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 non-sustaining or growth capital. Management
uses sustaining capital and other sustaining costs, to understand
the aggregate net result of the drivers of all-in sustaining costs
other than total cash costs. Sustaining capital and sustaining
lease are intended to provide additional information only, do 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.
Growth Capital
“Growth capital” is a non-GAAP financial measure. New Gold terms
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 sustaining capital. Growth capital is
intended to provide additional information only, does not have any
standardized meaning under IFRS, and may not be comparable to
similar measures presented by other mining companies. It should not
be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS.
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 Management’s Discussion and Analysis for the nine
months ended September 30, 2020 filed at www.sedar.com and on EDGAR
at www.sec.gov.
Cautionary Note Regarding Mineral Reserve and Mineral
Resource Estimates
Disclosure regarding Mineral Reserve and Mineral Resource
estimates included in this News Release was prepared in accordance
with Canadian National Instrument 43-101 Standards of Disclosure
for Mineral Projects (“NI 43-101”). NI 43-101 is a rule
developed by the Canadian Securities Administrators that
establishes standards for all public disclosure an issuer makes of
scientific and technical information concerning mineral projects.
NI 43-101 differs significantly from the disclosure requirements of
the United States Securities and Exchange Commission (“SEC”)
generally applicable to U.S. companies. For example, the terms
“mineral reserve”, “proven mineral reserve”, “probable mineral
reserve”, “mineral resource”, “measured mineral resource”,
“indicated mineral resource” and “inferred mineral resource” are
defined in NI 43-101. These definitions differ from the definitions
in the disclosure requirements promulgated by the SEC. Accordingly,
information contained in this News Release will not be comparable
to similar information made public by U.S. companies reporting
pursuant to SEC disclosure requirements.
Technical Information
The scientific and technical information relating to the Mineral
Reserves contained herein has been reviewed and approved by Andrew
Croal, Director, Technical Services for the Company. The scientific
and technical information relating to the Mineral Resources
contained herein has been reviewed and approved by Michele Della
Libera, Director, Exploration for the Company. All other scientific
and technical information in this News Release has been reviewed
and approved by Mr. Eric Vinet, Vice President, General Manager,
Rainy River for the Company. Mr. Croal is a Professional Engineer
and a member of the Professional Engineers of Ontario. Mr. Della
Libera is a Professional Geologist and a member of the Association
of Professional Geoscientists of Ontario and the Engineers and
Geoscientists British Columbia. Mr. Vinet is a Professional
Engineer and member of the Ordre des ingénieurs du Québec. Mr.
Croal, Mr. Della Libera and Mr. Vinet are "Qualified Persons" for
the purposes of NI 43-101. To the Company’s knowledge, each of the
aforementioned persons holds less than 1% of the outstanding
securities of the Company.
The estimates of Mineral Reserves and Mineral Resources
discussed in this News Release may be materially affected by
environmental, permitting, legal, title, taxation, sociopolitical,
marketing and other risks and relevant issues. New Gold’s current
NI 43-101 Technical Reports, which are available at www.sedar.com,
contain further information regarding Mineral Reserve and Mineral
Resource estimates, classification, reporting parameters, key
assumptions and risks for each of New Gold's material mineral
properties.
MINERAL RESERVES AND MINERAL RESOURCES
New Gold’s Mineral Reserve estimates as at December 31, 2020, is
presented in the following table.
MINERAL RESERVES
Metal grade
Contained metal
Tonnes
000s
Gold
g/t
Silver
g/t
Copper
%
Gold
Koz
Silver
Koz
Copper
Mlbs
RAINY RIVER
Direct processing
reserves
Open Pit
Proven
14,333
1.22
2.5
-
563
1,137
-
Probable
27,273
1.18
2.7
-
1,036
2,381
-
Open Pit P&P (direct
proc.)
41,606
1.20
2.6
-
1,599
3,518
-
Stockpile DPO
Proven
599
0.73
3.2
-
14
62
-
Probable
-
-
-
-
-
-
-
Total Stockpile
599
0.73
3.2
-
14
62
-
Low grade reserves
Open Pit
Proven
5,401
0.35
2.0
-
61
346
-
Probable
12,924
0.35
2.3
-
144
967
-
Open Pit P&P (low grade)
18,325
0.35
2.2
-
205
1,313
-
Stockpile
Proven
7,987
0.42
1.8
-
108
464
-
Probable
-
-
-
-
-
-
-
Open Pit P&P (stockpile)
7,987
0.42
1.8
-
108
464
-
Open Pit P&P (Direct proc.
& Low grade)
68,517
0.87
2.4
-
1,926
5,357
-
Underground
Proven
-
-
-
-
-
-
-
Probable
5,399
3.87
10.3
-
672
1,795
-
Underground P&P (direct
proc.)
5,399
3.87
10.3
-
672
1,795
-
Combined Direct proc. &
Low grade
Proven
28,320
0.82
2.2
-
746
2,009
-
Probable
45,596
1.26
3.5
-
1,852
5,143
-
Total Rainy River
P&P
73,916
1.09
3.0
-
2,598
7,152
-
NEW AFTON
A&B Zones
Proven
-
-
-
-
-
-
-
Probable
8,047
0.49
2.3
0.69
126
593
122
B3 Zone
Proven
-
-
-
-
-
-
-
Probable
9,325
0.63
1.4
0.74
189
418
152
C-Zone
Proven
-
-
-
-
-
-
-
Probable
29,252
0.68
1.8
0.75
643
1,659
484
Total New Afton
P&P
46,624
0.64
1.8
0.74
958
2,670
758
TOTAL PROVEN & PROBABLE
RESERVES
3,556
9,822
758
Notes to the Mineral Reserve and Mineral
Resource estimates are provided below.
Measured and Indicated Mineral Resources
Mineral Resource estimates as at December 31, 2020, are
presented in the following tables:
MEASURED & INDICATED
MINERAL RESOURCES (Exclusive of Mineral Reserves)
Metal grade
Contained metal
Tonnes
000s
Gold
g/t
Silver
g/t
Copper
%
Gold
Koz
Silver
Koz
Copper
Mlbs
RAINY RIVER
Direct processing
resources
Open Pit
Measured
592
1.51
2.4
-
29
46
-
Indicated
3,696
1.11
3.1
-
132
370
-
Open Pit M&I (direct
proc.)
4,288
1.17
3.0
-
161
416
-
Underground
Measured
-
-
-
-
-
-
-
Indicated
18,494
3.06
7.7
-
1,818
4,563
-
Underground M&I (direct
proc.)
18,494
3.06
7.7
-
1,818
4,563
-
Low grade resources
Open Pit
Measured
236
0.34
1.9
-
3
15
-
Indicated
2,054
0.35
2.0
-
23
131
-
Open Pit M&I (low grade)
2,290
0.35
2.0
-
26
146
-
Combined M&I
Measured
828
1.20
2.3
-
32
61
-
Indicated
24,244
2.53
6.5
-
1,973
5,064
-
Total Rainy River
M&I
25,072
2.49
6.4
-
2,005
5,125
-
NEW AFTON
A&B Zones
Measured
19,920
0.52
1.4
0.72
335
867
314
Indicated
11,691
0.36
2.5
0.56
135
933
145
A&B Zone M&I
31,612
0.46
1.8
0.66
470
1,800
460
C-Zone
Measured
6,156
0.82
2.1
0.99
163
417
135
Indicated
16,398
0.68
2.4
0.82
356
1,261
295
C-zone M&I
22,554
0.72
2.3
0.86
519
1,678
430
HW Lens
Measured
-
-
-
-
-
-
-
Indicated
12,333
0.49
1.9
0.42
194
769
114
HW Lens M&I
12,333
0.49
1.9
0.42
194
769
114
Combined M&I
Measured
26,076
0.59
1.5
0.78
497
1,281
449
Indicated
40,422
0.53
2.3
0.62
684
2,965
554
Total New Afton
M&I
66,498
0.55
2.0
0.68
1,182
4,246
1,003
TOTAL M&I
RESOURCES
3,187
9,371
1,003
Notes to the Mineral Reserve and Mineral
Resource estimates are provided below.
Inferred Mineral Resources
INFERRED MINERAL
RESOURCES
Metal grade
Contained metal
Tonnes
000s
Gold
g/t
Silver
g/t
Copper
%
Gold
Koz
Silver
Koz
Copper
Mlbs
RAINY RIVER
Direct processing
Open Pit
797
0.97
2.4
-
25
82
-
Underground
1,599
3.30
2.8
-
170
146
-
Total Direct Processing
2,396
2.52
2.7
-
195
228
-
Low grade resources
Open Pit
681
0.35
1.4
-
8
30
-
Rainy River Inferred
3,077
2.05
2.6
-
203
258
-
NEW AFTON
A&B Zones
7,671
0.34
1.3
0.33
83
311
56
C-Zone
10,640
0.37
1.0
0.37
126
349
87
HW Lens
3
0.49
0.6
0.19
-
-
-
New Afton Inferred
18,313
0.36
1.1
0.36
209
659
143
TOTAL INFERRED
412
917
143
Notes to the mineral reserve and mineral
resource estimates are provided below.
Notes to Mineral Reserve and Resource Estimates
- New Gold’s Mineral Reserves and Mineral Resources have been
estimated in accordance with the CIM Standards, which are
incorporated by reference in NI 43-101.
- All Mineral Reserve and Mineral Resource estimates for New
Gold’s properties and projects are effective December 31, 2020 and
do not reflect any events subsequent to that date.
- New Gold’s year-end 2020 Mineral Reserves and
Mineral Resources have been estimated based on the following metal
prices and foreign exchange (FX) rate criteria:
Gold
$/ounce
Silver
$/ounce
Copper
$/pound
FX
CAD:USD
Mineral Reserves
$1,400
$18.00
$2.75
$1.30
Mineral Resources
$1,500
$20.00
$3.00
$1.30
- Lower cut-offs for the Company’s Mineral Reserves and Mineral
Resources are outlined in the following table:
Mineral Property
Mineral Reserves
Lower cut-off
Mineral Resources
Lower Cut-off
Rainy River
O/P direct processing:
0.46 – 0.49 g/t AuEq
0.44 – 0.45 g/t AuEq
O/P low grade material:
0.30 g/t AuEq
0.30 g/t AuEq
U/G direct processing:
1.93 g/t AuEq
1.70 g/t AuEq
New Afton
Main Zone – B1 & B2
Blocks:
USD$ 21.00/t
All Resources: 0.40% CuEq
B3 Block & C-zone:
USD$ 24.00/t
- New Gold reports its measured and indicated mineral resources
exclusive of mineral reserves. Measured and indicated mineral
resources that are not mineral reserves do not have demonstrated
economic viability. Inferred mineral resources have a greater
amount of uncertainty as to their existence and technical
feasibility, do not have demonstrated economic viability, and are
likewise exclusive of mineral reserves. Numbers may not add due to
rounding.
- Mineral resources are classified as measured, indicated and
inferred based on relative levels of confidence in their estimation
and on technical and economic parameters consistent with the
methods considered to be most suitable to their potential
commercial extraction. The designators ‘open pit’ and ‘underground’
may be used to indicate the envisioned mining method for different
portions of a resource. Similarly, the designators ‘direct
processing’ and ‘lower grade material’ may be applied to
differentiate material envisioned to be mined and processed
directly from material to be mined and stored separately for future
processing. Mineral reserves and mineral resources may be
materially affected by environmental, permitting, legal, title,
taxation, sociopolitical, marketing and other risks and relevant
issues. Additional details regarding mineral reserve and mineral
resource estimation, classification, reporting parameters, key
assumptions and associated risks for each of New Gold’s material
properties are provided in the respective NI 43-101 Technical
Reports, which are available at www.sedar.com.
- The preparation of New Gold's consolidated statement and
estimation of mineral reserves has been completed under the
oversight and review of Mr. Andrew Croal, Director of Technical
Services for the Company. Mr. Croal is a Professional Engineer and
member of the Association of Professional Engineers Ontario.
Preparation of New Gold’s consolidated statement and estimation of
mineral resources has been completed under the oversight and review
of Mr. Michele Della Libera, Director, Exploration for the Company.
Mr. Della Libera is a Professional Geoscientist and member of the
Association of Professional Geoscientist of Ontario and of the
Engineers and Geoscientist of British Columbia. Mr. Croal and Mr.
Della Libera are "Qualified Persons" as defined by NI 43-101.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210210005324/en/
Anne Day Vice President, Investor Relations Direct: +1
(416) 324-6003 Email: anne.day@newgold.com
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