(All figures are in US dollars unless otherwise indicated)
VANCOUVER,
May 4 /PRNewswire/ - New Gold Inc.
("New Gold") (TSX: NGD)(NYSE AMEX: NGD) today announces financial
and operational results for the first quarter of 2011, where the
company combined increased gold production with the lowest total
quarterly cash cost(1) in New Gold's history. The
company finished the first quarter with gold sales of 104,211
ounces at a total cash cost(1) per ounce sold, net of
by-product sales, of $352 per ounce.
The combination of growing gold production, significantly lower
total cash cost(1) and continued strength in commodity
prices resulted in solid financial results. During the quarter,
earnings from mine operations increased by 119% to $80 million, net earnings increased by 85% to
$25 million, or $0.06 per share, and cash flow from operations
increased by 120% to $51 million.
New Gold is also pleased to reiterate its
production guidance for 2011 with gold production of 380,000 to
400,000 ounces and lower its guidance for total cash
cost(1) per ounce sold, net of by-product sales, to
$390 to $410 per ounce. See 2011
Outlook section for additional detail.
New Gold First Quarter
Highlights
- First quarter total cash cost (1) per
ounce sold, net of by-product sales, decreased to $352 per ounce from $467 per ounce in the same period in 2010
- Quarterly gold production increased by 39% to 107,622 from
77,215 in the same period in 2010
- First quarter cash flow from operations increased by 120% to
$51 million from $23 million in the same period in 2010
- Stockpiling of ore has started at New Afton with approximately
22,000 tonnes stockpiled on surface at the end of the first
quarter
- $520 million of cash at
March 31, 2011, increased by
$29 million since December 31, 2010
- Subsequent to the quarter end, on April
4, 2011, announced the friendly acquisition of Richfield
Ventures Corp. ("Richfield"), and its flagship Blackwater Project
in British Columbia, at a
transaction value of $513
million
"We are very pleased as the momentum we
established through our strong performance in 2010 continues to
build in 2011. Our base of three operating assets has once again
delivered increased gold production at lower cost," stated
Randall Oliphant, Executive
Chairman. "We feel fortunate that with the prevailing strength in
commodity prices our margins and cash flows continue to grow
significantly. We believe that this growth will be further enhanced
through the development of our two fully-funded organic growth
projects as well as by our proposed acquisition of Richfield."
2011 First Quarter Consolidated Financial
Results
Consolidated revenue for the first quarter of
2011 was $171 million compared to
$102 million in the same period of
2010. This revenue increase was driven by a combination of higher
production as well as higher average realized commodity prices.
Earnings from mine operations for the first
quarter of 2011 were $80 million
compared to $37 million in the same
period of 2010. Earnings from mine operations increased by 119% as
a result of higher gold production, significantly lower total cash
cost(1) and higher average realized gold prices. The
consolidated average realized gold price in the first quarter of
2011 was $1,317 per ounce compared to
$1,079 per ounce in the same period
of the prior year.
During the first quarter of 2011 New Gold
increased its average margin by $353
per ounce to $965 per ounce from
$612 per ounce in the same period of
the prior year, outpacing the underlying increase in the gold
price.
Net earnings from continuing operations in the
first quarter of 2011 were $25
million, or $0.06 per share,
compared to $13 million, or
$0.03 per share, in the same period
of 2010. Adjusted net earnings from continuing operations in the
quarter were $48 million, or
$0.12 per share, which increased from
$18 million, or $0.05 per share, in the same period of the prior
year. Net earnings has been adjusted and tax affected for the group
of costs in "Other gains and losses" on the condensed consolidated
income statement. The most significant adjustment is the fair value
change of the company's share purchase warrants and convertible
debentures in the first quarter of 2011 which was a loss of
$24 million, relative to a loss of
$10 million in the same period of the
prior year.
Cash flow from operations for the first quarter
of 2011 was $51 million compared to
$23 million in the same period of
2010. At the end of the first quarter of 2011 there was also a
$15 million receivable related to the
sale of Peak copper concentrate, the payment of which was received
in April. Cash flow from operations increased by 120% as a result
of higher gold production and increased operating margins driven by
higher average realized gold prices and lower total cash
cost(1).
2011 First Quarter Operations
Overview
All three of the company's operating mines,
Mesquite, Cerro San Pedro and Peak Mines, had strong starts to
2011. Collectively, the gold production from the three operations
during the quarter was 107,622 ounces at total cash
cost(1) per ounce sold, net of by-product sales, of
$352 per ounce compared to gold
production of 77,215 ounces at $467
per ounce in the first quarter of 2010. While gold production
increased at each of the operations, the primary driver of the 39%
consolidated quarterly production increase was Cerro San Pedro as
the mine had a strong operational quarter compared to the first
quarter of 2010 when the mine experienced a delay in the receipt of
its annual explosives permit. The company is well positioned as the
combination of growing gold production and increasing operating
margins lead to further cash flow growth. In addition, New Afton,
the company's most immediate development project, which has the
potential to more than double the cash flow of the company,
continues to move forward on budget and on schedule with production
anticipated in mid-2012.
"Our first quarter results demonstrate continued
execution by our operating and development teams," stated
Robert Gallagher, President and
Chief Executive Officer. "We were very pleased as each one of our
mines produced more gold than in the first quarter of 2010 and,
after this strong start to the year, we look forward to continuing
to deliver operationally through 2011 and particularly into 2012
when we bring New Afton into production."
|
|
|
|
Three months ended |
|
|
|
|
|
March 31, |
|
|
|
|
2011 |
2010 |
Production |
|
|
|
|
|
Mesquite Gold (ounces) |
|
|
|
48,855 |
44,034 |
Cerro San Pedro |
|
|
|
|
|
|
Gold (ounces) |
|
|
|
35,601 |
12,938 |
|
Silver (ounces) |
|
|
|
635,320 |
206,700 |
Peak Mines |
|
|
|
|
|
|
Gold (ounces) |
|
|
|
23,166 |
20,243 |
|
Copper (million pounds) |
|
|
|
3.5 |
4.0 |
|
|
|
|
|
|
Total production |
|
|
|
|
|
|
Gold (ounces) |
|
|
|
107,622 |
77,215 |
|
Silver (ounces) |
|
|
|
635,320 |
206,700 |
|
Copper (million pounds) |
|
|
|
3.5 |
4.0 |
|
|
|
|
|
|
Gold sales (ounces) |
|
|
|
104,211 |
80,020 |
|
|
|
|
|
|
Total cash cost(1) ($
per ounce) |
|
|
|
$352 |
$467 |
Mesquite Mine Delivers 65% Increase in
Earnings from Mine Operations
Gold sales in the first quarter at Mesquite were
50,418 ounces at a total cash cost(1) per ounce sold of
$543 compared to 49,502 ounces sold
at $543 per ounce sold in the first
quarter of 2010. The combination of higher production and higher
average realized gold prices resulted in a 65% increase in earnings
from mine operations to $29 million
from $17 million in the same period
of the prior year. The average realized gold price in the first
quarter of 2011 was $1,239 per ounce
compared to $1,047 per ounce in the
same period of the prior year.
Gold production and sales increased during the
first quarter of 2011 due to mining continuing in a higher grade
portion of the pit at the beginning of the quarter, the benefit of
which was partially offset by lower ore tonnes mined compared to
the same period of the prior year. The total cash
cost(1) remained consistent as benefit of mining in a
higher grade area of the pit was offset by an increase in input
costs such as diesel and explosives.
Cerro San Pedro Mine Demonstrates Strong
Silver Leverage
Gold sales in the first quarter at Cerro San
Pedro increased by 142% to 31,717 ounces from 13,124 ounces in the
same period in 2010. In addition to this significant gold
production growth, Cerro San Pedro benefitted from the continued
strength in the silver price with total cash cost(1) per
ounce of gold sold, net of by-product sales, of $7 per ounce compared to $622 per ounce in the first quarter of 2010. The
increase in both gold production and average realized price coupled
with the significant decline in total cash cost(1) led
to Cerro San Pedro generating $34
million in earnings from mine operations in the first
quarter of 2011 compared to $3
million in the same period of the prior year. The average
realized gold price in the first quarter of 2011 was $1,391 per ounce compared to $1,118 per ounce in the same period of the prior
year.
Gold production and sales during the first
quarter of 2011 were higher than the prior year quarter due to the
timely receipt of the explosives permit which allowed significantly
higher tonnes to be placed on the leach pad. During the first
quarter of 2010 the receipt of the mine's explosives permit was
delayed resulting in only previously blasted ore being placed on
the leach pad. The decrease in total cash cost(1) was a
result of higher by-product revenues driven by both higher silver
production and prices. This benefit was partially offset by higher
total tonnes moved, higher diesel prices and the appreciation of
the Mexican peso during the first quarter of 2011 when compared to
the same period in 2010.
Silver sales during the quarter were 0.6 million
ounces at an average realized silver price of $32.62 per ounce compared to 0.2 million ounces
at $17.08 per ounce in the same
period in 2010. The increase in silver sales volume was similarly
attributable to higher ore tonnes being placed on the leach
pad.
Peak Mines Continue Steady
Performance
Gold sales in the first quarter at Peak Mines
were 22,076 ounces compared to 17,393 ounces sold in the first
quarter of 2010. Over the same periods, total cash
cost(1) per ounce of gold sold, net of by-product sales,
were $413 per ounce compared to
$136 per ounce. Earnings from
operations during the first quarter were $17
million compared to $16
million in the same period of the prior year. The average
realized gold price in the first quarter of 2011 was $1,389 per ounce compared to $1,138 per ounce in the same period of the prior
year.
Gold production and sales during the first
quarter of 2011 were higher than the prior year quarter due to
increases in ore tonnes processed and gold grades. Total cash
cost(1) increased through a combination of the
appreciating Australian dollar, higher mining costs in current
working areas and the benefit of the copper by-product being
applied against higher gold sales in the first quarter of 2011
compared to the same period of the prior year.
Copper sales during the quarter were 3.9 million
pounds at an average realized copper price of $4.19 per pound compared to 4.1 million pounds at
$3.39 per pound in the same period in
2010. The decrease in copper sales was attributable to minor
decreases in copper grades and recoveries.
New Afton Moving Forward Quickly
New Gold's most immediate development project
continued on schedule during the first quarter of 2011 and is
expected to commence production in mid-2012. The project will be an
underground mine and concentrator which is expected to produce an
annual average of 85,000 ounces of gold, and 75 million pounds of
copper.
During the first quarter of 2011, the New Afton
underground development crews continued their advance, completing
1,580 metres of development. As development crews are now working
at the base of the ore body, development ore continued to be
transported to the surface stockpile which contained approximately
22,000 ore tonnes at the end of the first quarter of 2011.
New Afton Underground
Highlights
- 571 metres of underground advance in March - a monthly
record
- First two draw points mined from the extraction level
- 22,000 tonnes of ore moved to surface stockpile
- Underground conveyor transfer stations well advanced with
conveyor start targeted for mid-year
New Afton Surface Construction
Highlights
- Poured over 1,000 metres3 of concrete in reclaim and
mill building
- Completed installation of all buried services throughout the
site
- Installed overhead pole installations for tie-in to 138kV power
line
- Completed coarse ore stockpile reclaim chamber
In the first quarter, project spending at New
Afton was $45 million.
To date, the company has signed concentrate
off-take agreements for 85% of the estimated concentrate production
from New Afton. The agreement for the remaining 15% is expected to
be finalized in the second quarter of 2011.
The company looks forward to production
commencing in approximately 14 months, as New Afton is expected to
contribute significantly to New Gold's current portfolio of
operating assets. The project remains fully-funded with the cash on
New Gold's Balance Sheet exceeding the remaining targeted project
capital costs. As a low-cost operation, New Afton should
meaningfully expand the company's operating margin and cash flow
generation. At current commodity prices, the mine is expected to
more than double the company's cash flow.
El Morro Receives Environmental Impact
Assessment - Construction Mobilization Begins
El Morro is an advanced stage gold/copper
project located in the Atacama Region, approximately 80 kilometres
east of the city of Vallenar, in north-central Chile. The El Morro project is a world-class
project with low expected cash costs and great organic growth
potential in one of the best mining jurisdictions in the world. New
Gold is a 30 percent joint venture partner in the project, with
Goldcorp Inc. ("Goldcorp"), the project developer, holding the
remaining 70 percent.
The Environmental Impact Assessment ("EIA")
necessary for the project permitting to proceed was received on
March 16, 2011. The granting of the
EIA facilitates commencement of construction activities by
Goldcorp, and specific permits will be obtained during the course
of project development. Goldcorp can now move forward with
condemnation drilling to test for mineralization beneath primary
infrastructure locations.
The budgeted spending at El Morro for 2011 is
estimated at approximately $150
million (100% basis) which is being fully funded by
Goldcorp.
With New Gold's 30% share of reserves already
containing 2.6 million ounces of gold and 1.8 billion pounds of
copper, the company is excited to have a highly motivated partner
in Goldcorp who are poised to begin drilling programs in the coming
months and are updating the feasibility study to determine the
optimal project configuration. The feasibility study update is
expected to be complete in the third quarter of 2011.
Proposed Acquisition of Richfield Ventures
Corp.
Subsequent to the quarter end, on April 4, 2011, New Gold and Richfield jointly
announced a friendly transaction whereby New Gold will acquire,
through a plan of arrangement (the "Arrangement"), all of the
outstanding common shares of Richfield. Under the terms of the
Arrangement, each Richfield shareholder will receive 0.9217 of a
New Gold share for each Richfield share held. The offer valued
Richfield at $10.38 per share or
approximately $550 million,
representing a 31% premium to Richfield's April 1, 2011 closing price and a 46% premium
based on each company's 20-day volume weighted average price. The
transaction value, net of cash and proceeds from all in-the-money
dilutive instruments, is approximately $513
million.
Richfield's flagship asset is the Blackwater
Project, located in central British
Columbia, approximately 160 kilometres southwest of
Prince George, a city of
approximately 80,000. On March 2,
2011, Richfield announced the initial mineral resource
estimate for the Blackwater Project, with its attributable share
comprising 1.8 million ounces of indicated gold resources plus 2.0
million ounces of inferred gold resources.
The Management Information Circular is being
mailed to Richfield shareholders this week and the transaction is
expected to close in early June.
Key Financial Information
New Gold's cash balance at March 31, 2011 was $520
million, an increase of $29
million over the 2010 year end cash balance. New Gold had
$240 million of debt outstanding at
the end of the first quarter comprised of $184 million of 10% senior secured notes due in
2017 (face value of C$187 million),
$44 million of 5% convertible
debentures due in 2014 (face value of C$55
million and C$9.35 strike
price) and $12 million in El Morro
project funding loans.
2011 Outlook
After completing a strong first quarter which
saw the benefit of the company's by-product revenues more than
offset the impact of appreciating foreign currencies and rising
input costs, resulting in record low total cash cost(1)
of $352 per ounce, New Gold is
pleased to provide the following updates on its 2011 guidance.
- Gold production guidance for the year remains 380,000 - 400,000
ounces with Cerro San Pedro and Peak expected to continue at the
production levels experienced in the first quarter and Mesquite
production anticipated to decline moderately in future quarters as
mine sequencing moves into areas more consistent with reserve
grade.
- Consolidated total cash cost(1) per ounce sold, net
of by-product sales, is now forecast to be $390 to $410 per ounce compared to $430 to $450 per ounce at the beginning of
2011.
- The forecast decrease in total cash cost(1) is
driven by the continued strength of the silver price and the
significant impact it is having on total cash cost(1) at
Cerro San Pedro where New Gold is expecting to produce between 1.9
and 2.1 million ounces of silver in 2011. It is anticipated that
Cerro San Pedro's total cash
cost(1) could be approximately $150 per ounce below the originally forecast
$240 to $260 per ounce.
- Partially offsetting the benefit from Cerro San Pedro is the
higher diesel prices New Gold is experiencing at the Mesquite mine.
The combination of lower production and higher diesel prices are
expected to result in higher costs at Mesquite in the coming
quarters with total cash cost(1) for 2011 anticipated to
be approximately $40 per ounce above
the previous forecast range.
- At Peak Mines, the combination of increasing copper prices and
appreciation of the Australian dollar continue to largely offset
one another. New Gold anticipates costs for the year to be at the
top end of the previously forecast cost guidance range for Peak of
$410 to $430 per ounce.
- Assumptions used in the updated 2011 cost guidance include
silver and copper prices of $33.00
per ounce and $4.00 per pound
respectively and Australian dollar and Mexican peso foreign
exchange rates of $1.00 and
$11.50 to the U.S. dollar,
respectively. The oil price is assumed to be $105 per barrel.
Despite experiencing cost pressures related to
input costs and foreign currencies, New Gold's by-product
commodities, silver and copper, continue to provide an effective
offset against these cost increases. New Gold is pleased its
operations continue to provide expanded margins with costs now
anticipated to be in the $390 to $410
per ounce range versus a prevailing gold price of over $1,500 per ounce today. The company's three
operating assets are performing well and New Afton should continue
to achieve major development milestones as the year progresses. In
addition, with the receipt of the EIA it is expected Goldcorp will
continue to advance El Morro and an updated feasibility study is
anticipated in the third quarter of 2011. With New Gold's portfolio
of three producing assets and two large, fully-funded organic
growth projects, the company set out to add a further leg of growth
through the proposed acquisition of Richfield Ventures Corp. New
Gold anticipates the transaction will close in early June and looks
forward to providing further updates about its plans with the
Blackwater Project at that time.
About New Gold Inc.
New Gold is an intermediate gold mining company.
The Mesquite Mine in the United
States, the Cerro San Pedro Mine in Mexico and Peak Gold Mines in Australia are expected to produce between
380,000 and 400,000 ounces of gold in 2011. The fully-funded New
Afton project in Canada is
scheduled to add further growth in 2012. In addition, New Gold owns
30% of the world-class El Morro project located in Chile. 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 may be deemed "forward looking".
All statements in this news release, other than statements of
historical fact, that address events 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 words "expects", "does
not expect", "plans", "anticipates", "does not anticipate",
"believes", "intends", "estimates", "projects", "potential",
"scheduled", "forecast", "budget" and similar expressions, or that
events or conditions "will", "would", "may", "could", "should" or
"might" occur. All such forward-looking statements 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. Forward-looking statements are necessarily
based on estimates and assumptions (including that the acquisition
of Richfield will be completed successfully on the terms agreed
upon by the parties and that the business of Richfield will be
integrated successfully in the New Gold organization) 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; fluctuations in the international currency markets
and in the rates of exchange of the currencies of Canada, the United
States, Australia,
Mexico and Chile; price volatility in the spot and
forward markets for commodities; impact of any hedging activities,
including margin limits and margin calls; discrepancies between
actual and estimated production, between actual and estimated
reserves and resources and between actual and estimated
metallurgical recoveries; changes in national and local government
legislation in Canada,
the United States, Australia, Mexico and Chile 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 that New Gold
operates, including, but not limited to, Mexico, where New Gold is involved with
ongoing challenges relating to its environmental impact statement
for the Cerro San Pedro Mine; the lack of certainty with respect to
the Mexican and other 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 the
company is or may become a party to, including the third party
claim related to the El Morro transaction with respect to New
Gold's exercise of its right of first refusal on the El Morro
copper-gold project in Chile and
its partnership with Goldcorp Inc., which transaction and third
party claim were announced by New Gold in January 2010; diminishing quantities or grades of
reserves; competition; loss of key employees; additional funding
requirements; actual results of current exploration or reclamation
activities; 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.
In the case of Richfield, such risks include, among other risks,
the approvals of regulators, availability of funds, the results of
financing and exploration activities, the interpretation of
drilling results and geological data, project cost overruns or
unanticipated costs and expenses. In addition, there are risks and
hazards associated with the business of mineral exploration,
development and mining, including environmental 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 and Richfield's
continuous disclosure documents filed on and available at
www.sedar.com. 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.
Cautionary Note to U.S. Readers Concerning
Estimates of Measured, Indicated and Inferred Mineral
Resources
Information concerning the properties and
operations discussed herein has been prepared in accordance with
Canadian standards under applicable Canadian securities laws, and
may not be comparable to similar information for United States companies. The terms "Mineral
Resource", "Measured Mineral Resource", "Indicated Mineral
Resource" and "Inferred Mineral Resource" used in this news release
are Canadian mining terms as defined in accordance with NI 43-101
under guidelines set out in the Canadian Institute of Mining,
Metallurgy and Petroleum ("CIM") Standards on Mineral Resources and
Mineral Reserves adopted by the CIM Council on December 11, 2005. While the terms "Mineral
Resource", "Measured Mineral Resource", "Indicated Mineral
Resource" and "Inferred Mineral Resource" are recognized and
required by Canadian regulations, they are not defined terms under
standards of the United States Securities and Exchange Commission.
Under United States standards,
mineralization may not be classified as a "reserve" unless the
determination has been made that the mineralization could be
economically and legally produced or extracted at the time the
reserve calculation is made. As such, certain information contained
in this news release concerning descriptions of mineralization and
resources under Canadian standards is not comparable to similar
information made public by United
States companies subject to the reporting and disclosure
requirements of the United States Securities and Exchange
Commission. An "Inferred Mineral Resource" has a great amount of
uncertainty as to its existence and as to its economic and legal
feasibility. It cannot be assumed that all or any part of an
"Inferred Mineral Resource" will ever be upgraded to a higher
category. Under Canadian rules, estimates of Inferred Mineral
Resources may not form the basis of feasibility or other economic
studies. Readers are cautioned not to assume that all or any part
of Measured or Indicated
Resources will ever be converted into Mineral
Reserves. Readers are also cautioned not to assume that all or any
part of an "Inferred Mineral Resource" exists, or is economically
or legally mineable. In addition, the definitions of "Proven
Mineral Reserves" and "Probable Mineral Reserves" under CIM
standards differ in certain respects from the standards of the
United States Securities and Exchange Commission.
Technical Information - New Gold and
Richfield Ventures
The scientific and technical information in this
presentation has been prepared under the supervision of
Mark Petersen, a qualified person
under National Instrument 43-101 and employee of New Gold.
See Richfield's
March 2, 2011 NI 43-101 Technical
Report available on SEDAR at www.sedar.com for detailed information
regarding the Blackwater Project resource estimate. The Blackwater
resource estimate contained in this document is effective as of
March 2, 2011 and was derived from
information prepared by or under the supervision of Mr.
Ronald Simpson, P. Geo, President of
Geosim Services Inc., an independent "qualified person" under
National Instrument 43-101 Standards of Disclosure for Mineral
Projects NI 43-101.
(1) TOTAL CASH COST
"Total cash cost" per ounce figures are
calculated in accordance with a standard developed by The Gold
Institute, which was a worldwide association of suppliers of gold
and gold products and included leading North American gold
producers. The Gold Institute ceased operations in 2002, but the
standard is widely accepted as the standard of reporting cash cost
of production in North America.
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 cost on a sales
basis. Total cash cost includes mine site operating costs such as
mining, processing, administration, royalties and production taxes,
but is exclusive of amortization, reclamation, capital and
exploration costs. Total cash cost is reduced by any by-product
revenue and is then divided by ounces sold to arrive at the total
by-product cash cost of sales. The measure, along with sales, is
considered to be a key indicator of a company's ability to generate
operating earnings and cash flow from its mining operations. This
data is furnished to provide additional information and is a
non-GAAP measure. Total cash cost presented do not have a
standardized meaning prescribed by GAAP and may not be comparable
to similar measures presented by other mining companies. It should
not be considered in isolation as a substitute for measures of
performance prepared in accordance with GAAP and is not necessarily
indicative of operating costs presented under GAAP. A
reconciliation will be provided in the MD&A accompanying the
quarterly financial statements.
New Gold Inc. |
|
|
|
|
Condensed consolidated income
statements |
|
|
|
|
Three month periods ended March
31 |
|
|
|
|
(Expressed in thousands of U.S. dollars, except
share and per share amounts) |
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
2011 |
|
2010 |
|
|
$ |
|
$ |
|
|
|
|
|
Revenues |
|
171,213 |
|
101,620 |
Operating expenses |
|
(70,716) |
|
(51,886) |
Depreciation and depletion |
|
(20,027) |
|
(12,963) |
Earnings from mine operations |
|
80,470 |
|
36,771 |
|
|
|
|
|
Corporate administration expenses |
|
(6,181) |
|
(5,645) |
Share-based payment expenses |
|
(2,856) |
|
(1,940) |
Exploration expenses |
|
(2,126) |
|
(1,794) |
|
|
|
|
|
Income from operations |
|
69,307 |
|
27,392 |
|
Finance income |
|
1,046 |
|
256 |
|
Finance costs |
|
(1,137) |
|
(558) |
|
Other gains and losses |
|
(24,398) |
|
(4,612) |
|
|
|
|
|
Earnings before taxes |
|
44,818 |
|
22,478 |
Income tax expense |
|
(20,099) |
|
(9,436) |
|
|
|
|
|
Net earnings from continuing
operations |
|
24,719 |
|
13,042 |
Earnings from discontinued
operations |
|
- |
|
305 |
Net earnings |
|
24,719 |
|
13,347 |
|
|
|
|
|
Earnings per share from continuing
operations |
|
|
|
|
|
Basic |
|
0.06 |
|
0.03 |
|
Diluted |
|
0.06 |
|
0.03 |
|
|
|
|
|
Earnings per share from discontinued
operations |
|
|
|
|
|
Basic |
|
- |
|
- |
|
Diluted |
|
- |
|
- |
|
|
|
|
|
Earnings per share from continuing and
discontinued operations |
|
|
|
|
|
Basic |
|
0.06 |
|
0.03 |
|
Diluted |
|
0.06 |
|
0.03 |
|
|
|
|
|
Weighted average number of shares
outstanding |
|
|
|
|
(in thousands) |
|
|
|
|
|
Basic |
|
399,336 |
|
388,956 |
|
Diluted |
|
405,523 |
|
398,190 |
New Gold Inc. |
|
|
|
|
|
|
|
Condensed consolidated statements of
financial position |
|
|
(Expressed in thousands of U.S. dollars) |
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
March 31 |
|
December 31 |
January 1 |
|
|
|
|
2011 |
|
2010 |
2010 |
|
|
|
|
$ |
|
$ |
$ |
Assets |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
520,169 |
|
490,754 |
271,526 |
Trade and other
receivables |
|
|
|
29,542 |
|
11,929 |
10,345 |
Inventories |
|
|
|
107,902 |
|
103,055 |
86,299 |
Current portion of derivative
assets |
|
|
|
- |
|
- |
706 |
Prepaid expenses and other |
|
|
|
5,467 |
|
7,325 |
6,933 |
Current assets of
operations held for sale |
|
- |
|
- |
10,298 |
Total current assets |
|
|
|
663,080 |
|
613,063 |
386,107 |
|
|
|
|
|
|
|
|
Investments |
|
|
|
- |
|
7,533 |
45,890 |
Mining interests |
|
|
|
1,830,427 |
|
1,767,240 |
1,664,563 |
Deferred tax assets |
|
|
|
10,211 |
|
10,058 |
11,098 |
Reclamation deposits and
other |
|
|
|
24,553 |
|
31,295 |
17,646 |
Assets of operations held for
sale |
|
|
|
- |
|
- |
78,989 |
Total assets |
|
|
|
2,528,271 |
|
2,429,189 |
2,204,293 |
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Trade and other payables |
|
|
|
76,975 |
|
69,245 |
37,999 |
Current portion of long-term
debt |
|
|
|
- |
|
- |
12,088 |
Current portion of derivative
liabilities |
|
|
|
40,718 |
|
40,072 |
19,206 |
Current tax liabilities |
|
|
|
38,203 |
|
31,392 |
13,711 |
Current
liabilities of operations held for sale |
|
- |
|
- |
10,414 |
Total current liabilities |
|
|
|
155,896 |
|
140,709 |
93,418 |
|
|
|
|
|
|
|
|
Reclamation and closure
cost obligations |
|
|
35,571 |
|
34,173 |
24,764 |
Provisions |
|
|
|
12,569 |
|
9,227 |
4,541 |
Non-current portion of
derivative liabilities |
|
|
106,736 |
|
113,303 |
76,780 |
Non-hedged derivative
liabilities |
|
|
|
183,367 |
|
155,365 |
37,542 |
Deferred tax liabilities |
|
|
|
178,034 |
|
179,180 |
245,969 |
Long-term debt |
|
|
|
239,550 |
|
229,884 |
225,456 |
Deferred benefit |
|
|
|
46,276 |
|
46,276 |
- |
Other |
|
|
|
661 |
|
577 |
814 |
Liabilities of operations held for
sale |
|
|
|
- |
|
- |
19,890 |
Total liabilities |
|
|
|
958,660 |
|
908,694 |
729,174 |
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
Common shares |
|
|
|
1,862,196 |
|
1,845,886 |
1,810,039 |
Contributed surplus |
|
|
|
77,881 |
|
81,176 |
82,984 |
Share purchase warrants |
|
|
|
- |
|
- |
11,850 |
Other reserves |
|
|
|
(40,531) |
|
(51,913) |
(27,639) |
Deficit |
|
|
|
(329,935) |
|
(354,654) |
(402,115) |
|
|
|
|
(370,466) |
|
(406,567) |
(429,754) |
Total equity |
|
|
|
1,569,611 |
|
1,520,495 |
1,475,119 |
Total liabilities and equity |
|
|
|
2,528,271 |
|
2,429,189 |
2,204,293 |
|
|
|
|
|
|
|
|
New Gold Inc. |
|
|
|
|
Condensed consolidated statements of
cash flows |
|
|
|
|
Three month periods ended March
31 |
|
|
|
|
(Expressed in thousands of U.S.
dollars) |
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
2011 |
|
2010 |
|
|
$ |
|
$ |
Operating activities |
|
|
|
|
Net earnings |
|
24,719 |
|
13,347 |
Earnings from discontinued
operations |
|
- |
|
(305) |
Adjustments for: |
|
|
|
|
|
Unrealized gain on gold contracts |
|
(2,178) |
|
(2,076) |
|
Unrealized loss on fuel contracts |
|
176 |
|
65 |
|
Unrealized foreign exchange gain |
|
(3,115) |
|
(1,369) |
|
Unrealized and realized gain on of
investments |
|
(1,349) |
|
(3,944) |
|
Unrealized loss on non-hedge derivatives |
|
24,355 |
|
10,109 |
|
Loss on disposal of assets |
|
108 |
|
398 |
|
Depreciation and depletion |
|
19,637 |
|
13,070 |
|
Share-based payments |
|
1,775 |
|
1,898 |
|
Unrealized loss (gain) on embedded derivative
contract |
|
2,454 |
|
(1,907) |
|
Unrealized loss (gain) on hedging items entered
into for cash flow hedges |
|
1,827 |
|
- |
|
Income tax expense |
|
20,099 |
|
9,436 |
|
Income tax paid |
|
(11,236) |
|
(9,120) |
|
Finance income |
|
(1,046) |
|
(256) |
|
Interest received |
|
1,046 |
|
232 |
|
Finance costs |
|
1,137 |
|
558 |
|
Interest paid |
|
(265) |
|
(206) |
Change in non-cash working
capital |
|
(27,601) |
|
(6,950) |
Cash provided by continuing
operations |
|
50,543 |
|
22,980 |
Cash used in discontinued
operations |
|
- |
|
(1,696) |
|
|
|
|
|
Investing activities |
|
|
|
|
|
Mining interests |
|
(57,182) |
|
(22,002) |
|
Recovery (contribution) of reclamation
deposits |
|
8,147 |
|
(41) |
|
Proceeds from disposal of assets |
|
132 |
|
29 |
|
Cash received in El Morro transaction, net of
transaction costs |
|
- |
|
46,276 |
|
Investment in El Morro |
|
- |
|
(463,000) |
|
Proceeds from sale of investments |
|
8,927 |
|
48,112 |
Cash used in continuing
operations |
|
(39,976) |
|
(390,626) |
Cash used in discontinued
operations |
|
- |
|
(219) |
|
|
|
|
|
Financing activities |
|
|
|
|
|
Exercise of options to purchase common stock |
|
11,240 |
|
765 |
|
El Morro loan |
|
- |
|
463,000 |
|
Revolving credit facility costs |
|
(431) |
|
- |
|
Repayment of long-term debt |
|
- |
|
(27,235) |
Cash provided by continuing
operations |
|
10,809 |
|
436,530 |
Cash provided by (used in)
discontinued operations |
|
- |
|
- |
|
|
|
|
|
Effect of exchange rate changes on
cash and cash equivalents |
|
8,039 |
|
5,295 |
|
|
|
|
|
Increase in cash and cash
equivalents |
|
29,415 |
|
72,264 |
Cash and cash equivalents, beginning
of period |
|
490,754 |
|
272,352 |
Cash and cash equivalents, end
of period |
|
520,169 |
|
344,616 |
SOURCE New Gold Inc.