New Gold 2012 Operational Results Extend History of Delivering on
Guidance and 2013 Outlook Provides Gold Production Growth at
Significantly Lower Costs
(All figures are in US dollars unless otherwise indicated)
VANCOUVER,
Feb. 5, 2013 /PRNewswire/ - New Gold
Inc. ("New Gold") (TSX and NYSE MKT:NGD) today announces fourth
quarter and full year 2012 operational results as well as 2013
guidance, combining continued operational execution with gold
production growth and declining total cash costs(1). The
company finished 2012 with gold production of 411,892 ounces at
total cash costs(1) per ounce sold, net of by-product
sales, of $421 per ounce. After
delivering 6% gold production growth and a $25 per ounce decrease in total cash
costs(1) per ounce sold, net of by-product sales, during
2012, New Gold's 2013 guidance outlines continued gold production
growth coupled with a further decline in costs. For 2013, the
company forecasts gold production of 440,000 to 480,000 ounces at
total cash costs(1) per ounce sold, net of by-product
sales, of $265 to $285 per ounce. "We
are very pleased with our operational performance in 2012 as our
teams continued to execute," stated Randall
Oliphant, Executive Chairman. "Looking forward, a full year
of operations at New Afton allows us to, once again, combine gold
production growth with substantially lower costs, which I believe
is one of the key differentiators of our company."
Fourth Quarter and Full Year 2012
Highlights |
- Strong finish to 2012 with fourth quarter gold production of
112,883 ounces at total cash costs(1), net of by-product
sales, of $254 per ounce, the lowest in the company's history
- Met annual operational guidance for fourth consecutive year
-
- 2012 gold production increased by 6% to 411,892 ounces from
387,155 ounces
- 2012 total cash costs(1) per ounce sold, net of
by-product sales, decreased to $421 per ounce from $446 per
ounce
- 2012 year end Measured and Indicated gold resources of 21.4
million ounces, an increase of 10% per share when compared to the
prior year end
- New Afton mine life extended by two years from 12 to 14 years
through exploration efforts
- Simplified balance sheet finishing 2012 with highest ever year
end cash balance of $688 million and all corporate debt due in 2020
or beyond
|
2013 Outlook Highlights |
- Targeting further ~12% gold production growth to between
440,000 and 480,000 ounces
- A forecasted doubling of copper production to drive total cash
costs(1)per ounce sold, net of by-product sales, down by
approximately $145 per ounce to $265 to $285 per ounce
-
- 2013 all-in sustaining cash costs(2) estimated to be
$875 per ounce
- New Afton mill throughput expected to reach sustainable 12,000
tonnes per day, or 9% increase over nameplate capacity, by end of
2013
- Exploration team to build upon successful drill results at New
Afton C-zone and further test the new targets identified on the
company's 1,000 square kilometre land position at
Blackwater
- Blackwater Feasibility Study to be completed in late 2013
|
The preliminary information provided for production, sales and
total cash costs(1) are approximate figures and may
differ slightly from the final results included in the 2012 annual
audited financial statements and MD&A.
Operations Overview |
New Gold 2012 Fourth
Quarter and Full Year Summary Operational Results |
|
Three months ended |
|
Twelve months ended |
|
|
December 31, |
|
December 31, |
|
|
2012 |
2011 |
|
2012 |
2011 |
Gold Production (thousand
ounces) |
|
|
|
|
|
|
Mesquite |
|
29.2 |
43.6 |
|
142.0 |
158.0 |
Cerro San Pedro |
|
32.1 |
34.1 |
|
137.6 |
143.7 |
Peak Mines |
|
28.8 |
22.9 |
|
95.5 |
85.4 |
New Afton |
|
22.8 |
- |
|
36.8 |
- |
Total Gold Production |
|
112.9 |
100.6 |
|
411.9 |
387.1 |
|
|
|
|
|
|
|
Total Gold Sales |
|
109.8 |
99.6 |
|
395.5 |
391.9 |
Average realized gold price ($ per ounce) |
|
$1,578 |
$1,549 |
|
$1,551 |
$1,460 |
|
|
|
|
|
|
|
Silver Production (thousand
ounces) |
|
|
|
|
|
|
Cerro San Pedro |
|
401.3 |
453.0 |
|
1,938.5 |
1,989.3 |
|
|
|
|
|
|
|
Total Silver Sales |
|
420.0 |
440.0 |
|
1,926.1 |
2,007.8 |
Average realized silver price ($ per ounce) |
|
$32.46 |
$31.26 |
|
$30.78 |
$35.15 |
|
|
|
|
|
|
|
Copper Production (million
pounds) |
|
|
|
|
|
|
Peak Mines |
|
3.6 |
3.3 |
|
14.4 |
12.7 |
New Afton |
|
17.3 |
- |
|
28.5 |
- |
Total Copper Production |
|
20.9 |
3.3 |
|
42.7 |
12.7 |
|
|
|
|
|
|
|
Total Copper Sales |
|
19.8 |
2.9 |
|
35.6 |
15.3 |
Average realized copper price ($ per pound) |
|
$3.52 |
$3.56 |
|
$3.56 |
$3.78 |
|
|
|
|
|
|
|
Total Cash Costs(1) - net of by-product sales ($ per
ounce) |
|
|
|
|
|
Mesquite |
|
$787 |
$691 |
|
$690 |
$645 |
Cerro San Pedro |
|
320 |
253 |
|
232 |
115 |
Peak Mines |
|
743 |
726 |
|
764 |
618 |
New Afton |
|
(1,067) |
- |
|
(1,043) |
- |
Total Cash Costs(1) - net of by-product
sales |
|
$254 |
$553 |
|
$421 |
$446 |
|
|
|
|
|
|
|
Average realized margin ($ per ounce) |
|
$1,324 |
$996 |
|
$1,130 |
$1,014 |
Gold Production
Driven by a full quarter of production from New
Afton, New Gold's consolidated gold production during the fourth
quarter increased by 12% over the fourth quarter of 2011. Beyond
the contribution from New Afton, which was still in the development
stage during the fourth quarter of 2011, increased gold production
at the Peak Mines partially offset decreases at Mesquite and Cerro
San Pedro. Increased gold production at the Peak Mines, when
compared to the same period of the prior year, was a result of
realizing anticipated higher gold grades and continued recovery
improvements in the mill circuit.
The 6% year-over-year increase in gold
production during 2012 was also primarily attributable to the
production start at New Afton. A 12% increase in gold production at
the Peak Mines during the year, due to improved grades and
recoveries, was offset by production declines at Mesquite and Cerro
San Pedro resulting from lower grades being placed on the leach
pads as planned due to mine sequencing.
Copper and Silver Production
New Gold's consolidated copper production during
the fourth quarter increased by over six times to 21 million pounds
from three million pounds in the same period of the prior year. The
increase was largely attributable to a full quarter of production
from New Afton, though the Peak Mines also increased copper
production by 9% during the quarter. The increased production at
Peak was due to a combination of increased ore tonnes milled and
continued recovery improvements, which were partially offset by
lower copper grades.
For full year 2012, copper production increased
by 236% when compared to 2011. The increase was due to the
combination of the successful New Afton start-up and a 13% increase
in copper production at the Peak Mines.
Silver production at Cerro San Pedro remained
consistent during both the quarter and full year period.
Total Cash Costs(1) per Ounce Sold -
Net of By-Product Sales
New Gold's fourth quarter gold production was
achieved at the lowest costs in the company's history and among the
lowest costs in the industry. Total cash costs(1) per
ounce sold, net of by-product sales, during the fourth quarter were
$254 per ounce. The company was able
to reduce its total cash costs(1) by almost $300 per ounce when compared to the same period
of the prior year and $189 per ounce
when compared to the third quarter of 2012. Total cash
costs(1) in the fourth quarter of 2012 were driven lower
by the impact of New Afton successfully achieving full
production.
For full year 2012, the company's total cash
costs(1) per ounce sold, net of by-product sales, were
within the guidance range of $410 to
$430 per ounce set in early 2012. Importantly, New Gold was
able to deliver a decrease in total cash costs(1)
despite continued broader industry cost pressures.
"I am very proud of our operating teams for
continuing to deliver on the targets that we set at the beginning
of each year," stated Robert
Gallagher, President and Chief Executive Officer. "We look
forward to delivering on our guidance for a fifth consecutive year
in 2013."
2013 Guidance and
Sensitivities |
New Gold 2013 Guidance |
|
|
|
|
|
|
|
|
2012
Actual |
|
2013
Guidance |
|
|
Gold |
Total |
Capital |
|
Gold |
Total |
Estimated Capital |
|
|
Production |
Cash Costs(1) |
Expenditures |
|
Production |
Cash Costs(1) |
Expenditures |
|
|
(000 ounces) |
($ per ounce) |
($ millions) |
|
(000 ounces) |
($ per ounce) |
($ millions) |
|
|
|
|
|
|
|
|
|
|
Mesquite |
142.0 |
$690 |
$11 |
|
130 - 140 |
$830 - $850 |
$20 |
|
Cerro San Pedro |
137.6 |
232 |
15 |
|
140 - 150 |
375 - 395 |
40 |
|
Peak Mines |
95.5 |
764 |
47 |
|
95 - 105 |
670 - 690 |
60 |
|
New Afton |
36.8 |
(1,043) |
297 |
|
75 - 85 |
(1,410) - (1,390) |
110 |
|
|
|
|
|
|
|
|
|
|
New Gold Consolidated |
411.9 |
$421 |
$370 |
|
440 - 480 |
$265 - $285 |
$230 |
|
New Gold's targeted 2013 gold production growth
is primarily driven by a full year of production from New Afton,
with increases at Cerro San Pedro and the Peak Mines offsetting a
minimal decrease in production at Mesquite. Consolidated copper
production in 2013 is expected to double to a range of 78 to 88
million pounds as a result of New Afton hitting full production and
the steady copper contribution from the Peak Mines. Silver
production at Cerro San Pedro is expected to move to 1.4 to 1.6
million ounces due to the planned processing of lower silver grades
as a result of mine sequencing.
Total cash costs(1) per ounce sold,
net of by-product sales, are expected to decrease by approximately
$145 per ounce when compared to 2012
with costs benefitting from a full year of production at the low
cost New Afton mine. New Gold's copper and silver by-product
revenue continues to provide an effective natural hedge against the
various cost pressures being faced by the broader industry.
Per the company's quarterly plans, gold
production is expected to grow in the second half of the year with
a commensurate decline in total cash costs(1).
New Afton's 2013 co-product costs are forecast
to be $570 to $590 per ounce of gold
and $1.20 to $1.30 per pound of
copper.
The company is also pleased to provide its
estimate for 2013 all-in sustaining cash costs(2) of
approximately $875 per ounce. The
estimate for all-in sustaining cash costs includes: total cash
costs(1), corporate general and administrative expenses,
exploration expenditures and sustaining capital.
Assumptions used in the 2013 guidance include
gold, silver and copper prices of $1,600 per ounce, $30.00 per ounce and $3.50 per pound and Canadian dollar, Australian
dollar and Mexican peso exchange rates of $1.00, $1.00 and
$13.00 to the U.S. dollar. The diesel
price assumed for 2013 is $3.70 per
gallon, which is representative of recent prices being paid at
Mesquite. The following table provides an overview of the impact on
total cash costs(1), both by asset and consolidated, of
movements in the above noted assumptions.
|
Total Cash Costs(1) -
Sensitivities |
|
|
|
|
Category - |
Silver Price |
Copper Price |
AUD/USD |
CDN/USD |
MXN/USD |
Diesel |
Base Assumption - |
$30.00 |
$3.50 |
$1.00 |
$1.00 |
$13.00 |
$3.70 |
Sensitivity - |
+/-$1.00 |
+/-$0.25 |
+/-$0.05 |
+/-$0.05 |
+/-$1.00 |
+/-10% |
|
|
|
|
|
|
|
|
Total
cash costs(1) - impact |
Mesquite |
-- |
-- |
-- |
-- |
-- |
+/-$15 |
Cerro San Pedro |
+/-$10 |
-- |
-- |
-- |
+/-$25 |
-- |
Peak |
-- |
+/-$30 |
+/-$50 |
-- |
-- |
-- |
New Afton |
-- |
+/-$220 |
-- |
+/-$75 |
-- |
-- |
|
|
|
|
|
|
|
New Gold Total |
+/-$3 |
+/-$45 |
+/-$10 |
+/-$15 |
+/-$8 |
+/-$5 |
2012 Year End Mineral Reserves and Resources |
Gold Mineral
Reserves and Resources Summary Table (thousand ounces) |
As at December 31, 2012 |
|
|
|
|
|
|
|
|
|
Proven & Probable
Reserves |
|
Measured & Indicated
Resources |
|
Inferred
Resources |
Mesquite |
|
2,342 |
|
5,684 |
|
651 |
Cerro San Pedro |
|
760 |
|
1,703 |
|
850 |
Peak Mines |
|
649 |
|
880 |
|
144 |
New Afton |
|
1,100 |
|
1,979 |
|
523 |
El Morro (30%) |
|
2,891 |
|
2,891 |
|
1,310 |
Blackwater |
|
-- |
|
8,070 |
|
310 |
Capoose |
|
-- |
|
196 |
|
595 |
|
|
|
|
|
|
|
New Gold Total |
|
7,742 |
|
21,403 |
|
4,383 |
|
|
|
|
|
|
|
Note: Measured and
Indicated Resources shown inclusive of Proven and Probable
Reserves. See the Detailed Reserve and |
Resource Tables and the
Notes to Mineral Reserve and Resource Statements at the end of this
news release for further detail. |
New Gold's 2012 year end Measured and Indicated
gold resources increased by 2.6 million ounces when compared to the
prior year, with the resource increase more than offsetting the
approximately 0.6 million ounces that were mined at the company's
four operations. In total, the company's Measured and Indicated
gold resources increased by 10% per share during 2012. During the
year, New Gold's gold reserve base declined by only 0.1 million
ounces despite the company producing 411,892 ounces. Proven and
Probable gold reserves increased during the year at each of Peak
Mines, New Afton and El Morro. New Gold is particularly pleased
that the exploration efforts at New Afton, which only began in
mid-2012, have already added over 150,000 ounces to its reserve
base. The team continues to actively explore the C-zone block of
mineralization that lies below the New Afton B-zone reserve block.
Additional detail is provided in the section entitled
Exploration Update.
In addition, at the Peak Mines, the company was,
once again, successful in replacing the ounces mined during the
year, thus maintaining the mine life of the operation at eight
years. No exploration drilling was completed at Mesquite or Cerro
San Pedro during 2012.
At Blackwater, the company was successful in
upgrading the majority of the mineral resource into the Measured
and Indicated categories to support the completion of the
Feasibility Study in late 2013. The infill drilling program on the
main Blackwater deposit has now been completed. Through 2012, New
Gold was successful in growing the Blackwater Measured and
Indicated gold mineral resource to 8.1 million ounces from 5.4
million ounces at the end of 2011. The latest estimate also
represents a significant improvement in the overall resource
classification at Blackwater. Since the company's September 2012 Preliminary Economic Assessment
("PEA") however, through the combination of the infill drill
results and updated geologic resource constraints, Blackwater has
seen a decline in its global mineral resource inventory, with the
majority of the decrease in the lower grade Inferred resource
category. In assessing the latest Blackwater results, the company
is focused on the highest quality tonnes and gold ounces in an
effort to maximize profitability rather than global resource
inventory. In light of this, New Gold has increased the cut-off
grade used to estimate the Blackwater mineral resource to 0.4
gold-equivalent grams per tonne from the 0.3 gold-equivalent grams
per tonne used for the PEA.
With the 2012 year end mineral resource as the
basis, Blackwater's mine plan will be subject to ongoing scheduling
optimizations through completion of the Feasibility Study in late
2013. A variable cut-off strategy will continue to be used in
formulating the pit sequencing to focus on mining and processing of
the most profitable ounces early in the project's life. The year
end resource is expected to support a more consistent production
profile in the first 10 years when compared to the PEA, which saw
higher production in the first five years at the expense of
production in years six through 10. Total estimated gold production
in the first 10 years of Blackwater's mine life is expected to
remain consistent with that of the PEA. New Gold also intends to
stockpile material below the 0.4 gold-equivalent grams per tonne
cut-off for processing toward the end of Blackwater's mine
life.
Exploration Update
During 2013, New Gold's exploration team plans
to build on a successful 2012 which saw the mine lives at New
Afton, the Peak Mines and El Morro extended as well as the
completion of over 270,000 metres of drilling at Blackwater. The
company's estimated total exploration budget for 2013 is
$50 million of which approximately
$20 million is expected to be
capitalized.
At New Afton, the C-zone exploration program
began in mid-2012. A total of 16,998 metres in 34 holes was
completed during the third and fourth quarters of 2012 with the
objective of extending the mine's life, adding to the mineral
resource immediately at the base of the current reserve block and
further delineating the C-zone which lies below the current New
Afton reserve. Seven of the 34 holes were included in the 2012 year
end mineral Reserve and Resource update.
Highlights of C-zone assays received since
completion of the year end Reserve and Resource update include:
|
2012 New Afton C-zone
Highlights |
|
|
|
|
|
|
|
|
|
|
|
Drill Hole |
|
From (metres) |
|
To (metres) |
|
Interval (metres) |
|
Gold
(grams per tonne) |
|
Copper
(%) |
EA12-7 |
|
424 |
|
494 |
|
70 |
|
1.23 |
|
1.19 |
EA12-9 |
|
286 |
|
444 |
|
158 |
|
0.88 |
|
0.94 |
EA12-11 |
|
418 |
|
528 |
|
110 |
|
1.05 |
|
0.90 |
EA12-19 |
|
460 |
|
626 |
|
166 |
|
1.23 |
|
1.28 |
EA12-21 |
|
488 |
|
597 |
|
109 |
|
1.06 |
|
0.95 |
EA12-24 |
|
574 |
|
730 |
|
156 |
|
1.01 |
|
1.02 |
A total of 40,000 metres of drilling is targeted
at New Afton for 2013, with 30,000 metres focused on the C-zone,
5,000 metres targeting continued reserve replacement and 5,000
metres testing regional targets on the company's 110 square
kilometre land package.
With infill drilling at the primary Blackwater
deposit now completed, the company plans to further advance its
exploration efforts on the Capoose resource, located 25 kilometres
from Blackwater, as well as on various new targets identified on
the company's broader land package during 2012. The exploration
team has budgeted for 40,000 metres of drilling at Blackwater
during 2013. Half of the 2013 program will focus on the completion
of condemnation drilling, testing for extensions to the Blackwater
resource and identification of potential satellite deposits near
the primary deposit. The remaining 20,000 metres are planned for
Capoose and various regional targets where between four and six
exploration drills are expected to be active throughout the year.
The company has the flexibility to increase the program at
Blackwater and intends to periodically reassess its plans
throughout 2013 based on the exploration results as they
emerge.
At the Peak Mines, the team has budgeted for
33,000 metres of drilling, of which 85% is near-mine and mine
corridor exploration, with the objective of continuing the long
history of reserve and resource replacement. The remainder of
Peak's exploration budget will focus on continued drill testing and
reconnaissance exploration over the company's extended regional
land position.
Asset Overviews
Mesquite
Mesquite extended its history of solid
performance during 2012. The mine met its 2012 production guidance
and came in below its targeted range for total cash
costs(1). Mesquite's production was down compared to
2011 as expected due to the mine plan moving through a phase of ore
that was below reserve grade. The processing of these lower grade
ores and increased diesel prices led to a moderate increase in
total cash costs(1) compared to 2011.
Looking ahead to 2013, mining is scheduled to
remain in a portion of the pit that has average grades below that
of Mesquite's global reserve grade, resulting in an expected modest
decrease in production. The combination of this lower production
base and a diesel price assumption that is 8% higher than the 2012
average price paid results in guidance for total cash
costs(1) increasing from 2012 levels. Based on the
company's longer term plans, it is expected that after 2013,
Mesquite's production should increase to historical levels with a
commensurate decrease in costs. Mesquite's 2013 estimated capital
spend is $20 million, of which
$7 million is for the purchase of two
new trucks that should facilitate production increases in the
coming years.
Cerro San Pedro
Cerro San Pedro had another strong year in 2012,
delivering its gold production at among the lowest costs in the
industry. Gold production was down slightly when compared to 2011
as a result of a minor decrease in the average gold grade processed
while silver production remained consistent. Cerro San Pedro's
total cash costs(1) per ounce sold, net of by-product
sales, were below the guidance set for 2012. The mine's total cash
costs(1) increased, when compared to a record setting
2011, primarily due to a lower average realized silver price.
Cerro San Pedro's 2013 guidance anticipates an
increase in gold production with increased gold grades more than
offsetting an expected decrease in tonnes processed. Silver
production is expected to decline due to a combination of lower
tonnes processed and planned mining of lower silver grades. The
projected increase in total cash costs(1) from 2012 to
2013 is primarily attributable to lower silver by-product revenue.
The 2013 estimated capital spend at Cerro San Pedro is $40 million, of which $30
million relates to a capitalized pushback and the mine's
final leach pad expansion. Cerro San Pedro's life of mine plan
indicates a steady and significant reduction in annual capital
costs over the remainder of the mine life.
Peak Mines
Peak finished 2012 with a strong fourth quarter
ultimately meeting its full year production guidance for both gold
and copper. Gold and copper production increased during 2012
compared to the prior year through a combination of higher grades
and continued increases in mill recoveries for both metals. The
increase in Peak's year-over-year total cash costs(1)
per ounce sold, net of by-product sales, was due to a combination
of lower by-product revenues, the appreciation of the Australian
dollar and general cost pressures in Australia.
In 2013, Peak is targeting a further increase in
gold production with copper production expected to remain
consistent with that of 2012. The increase in gold production is
driven by an expected increase in ore tonnes processed. At the same
time, total cash costs(1) per ounce sold, net of
by-product sales, are expected to decrease when compared to 2012.
This anticipated decrease in costs is attributable to a combination
of higher gold production, a lower foreign exchange rate
assumption, versus the average exchange rate in 2012, and a partial
abatement of certain inflationary pressures in Australia resulting from the cancellation,
delay or scaling back of various large projects in the sector.
Peak's 2013 capital estimate of $60
million is consistent with prior years and includes
approximately $30 million of
underground development and capitalized exploration in an effort to
continue Peak's long history of reserve and resource
replacement.
New Afton
New Afton's successful June 2012 production start-up was the culmination
of many years of dedicated exploration, development work and
project execution. After the New Afton mill achieved its design
capacity of 11,000 tonnes per day over one month ahead of schedule
in late September, the operation finished what was a strong year by
virtually every measure, with a solid fourth quarter.
During the fourth quarter, the mill throughput
averaged approximately 11,700 tonnes per day. As planned, the gold
and copper grades also increased in the fourth quarter, averaging
0.77 grams per tonne gold and 0.84% copper. Importantly, the gold
and copper grades of ore being processed from the block cave are
reconciling favourably with the block model reserve estimate. At
the same time, gold and copper recoveries continue to increase as
the mill circuit undergoes continual refinement. Recoveries for
gold and copper averaged 84% and 85% during the fourth quarter and
continue to move towards their anticipated run rate levels of 88 to
90%. New Afton finished 2012 having completed the development of 54
drawbells versus a target for the year of 48.
New Gold looks forward to 2013 with a full year
of contribution from New Afton expected to result in significant
increases in both gold and copper production as well as lower total
cash costs(1). At today's commodity prices it is
anticipated that New Afton could double the company's cash
flow.
Capital expenditures at New Afton during 2012,
net of pre-commercial production sales, totaled $297 million. In 2013, New Afton's capital
estimate is $110 million.
Approximately $90 million of the 2013
budgeted capital relates to underground development and the
completion of 36 drawbells to provide additional flexibility and
ore access points. Though some underground and drawbell development
is planned to occur on an annual basis going forward, the work
scheduled for 2013 should position the operation to see a marked
year-over-year decline in capital costs over the mine's now 14 year
life.
A further value enhancing initiative being
pursued at New Afton during 2013 is the evaluation of opportunities
to increase the mining and milling rate beyond the current
nameplate capacity of 11,000 tonnes per day. As a first step, the
New Afton team is targeting an increase in throughput to an average
of 12,000 tonnes per day, or a 9% increase over the design rate, by
the end of 2013. In order to assess the operation's potential to go
even further beyond this higher rate, the New Afton team intends to
evaluate which elements of the operation, if any, would represent
bottlenecks in reaching a throughput above 12,000 tonnes per day.
New Gold intends to provide updates on this initiative as well as
the continued C-zone exploration program during the second half of
2013.
El Morro
New Gold's share of the El Morro project
continues to provide the company with a 30% fully-carried interest
in an advanced stage, world-class copper/gold project in northern
Chile. The El Morro and
La Fortuna deposits represent the
two principal zones of gold-copper mineralization that have been
identified to date. Future exploration efforts will also test the
potential bulk-mineable gold and copper production below the bottom
of the current La Fortuna open
pit. Based on the most recent Feasibility Study, completed in late
2011, once in production, New Gold's 30% share of annual production
is expected to be over 90,000 ounces of gold and 85 million pounds
of copper over an initial 17-year mine life. During 2012, New
Gold's share of the gold and copper reserves at El Morro increased
by 0.4 million ounces of gold and 229 million pounds of copper.
Under the terms of New Gold's agreement with
Goldcorp Inc. ("Goldcorp"), Goldcorp is responsible for funding New
Gold's 30% share of capital costs. The carried funding will accrue
interest at a fixed rate of 4.58%. New Gold will repay its share of
capital plus accumulated interest out of 80% of its share of the
project's cash flow with New Gold retaining 20% of its share of
cash flow from the time production commences.
Activity at site has been limited recently due
to the previously announced temporary suspension of the project's
environmental permit, pending the resolution by the Chilean
Environmental Permitting Authority (the "Servicio de Evaluación
Ambiental" or "SEA") of certain deficiencies in consultation
asserted by a group of indigenous people whose claims were
supported by the Chilean court. In June
2012, SEA initiated the administrative process to address
the deficiencies identified by the Chilean court. It is anticipated
the consultation process could be completed by late 2013. During
the period of temporary suspension, Goldcorp's focus is on
supporting the advancement of the consultation process, evaluating
potential future exploration targets and optimizing project
economics including sourcing of a long-term power supply.
Blackwater
The company's Blackwater project was
significantly advanced during 2012 from multiple perspectives. Over
270,000 metres of drilling were completed on the project with the
majority focused on upgrading the mineral resource to the Measured
and Indicated resource classification. This increases the resource
classification and enables the resource estimate to be used as the
basis for Blackwater's Feasibility Study which remains on target
for completion in late 2013. In September
2012, the PEA for Blackwater was released which outlined the
parameters of a conventional truck and shovel open pit mine with a
60,000 tonne per day processing plant that had the potential to
produce an average of over 500,000 ounces of gold per
year(3).
Since the PEA, the Blackwater team has continued
to refine and optimize the project development plan with various
trade-off studies and will continue to do so throughout 2013. Based
on the additional work that has been completed to date, the PEA
assumptions for capital and operating costs continue to be viewed
as reasonable. In working towards the completion of the Feasibility
Study in late 2013, these elements as well as the mine plan,
discussed in the section entitled 2012 Year End Mineral Reserves
and Resources, will be refined with a focus on maximizing
profitability. During 2012, the company spent $127 million on the exploration and development
of the Blackwater project with the below highlighting some of the
key achievements.
The PEA is preliminary in nature and includes
Inferred mineral resources that are considered too speculative
geologically to have the economic considerations applied to them
that would enable them to be categorized as mineral reserves, and
there is no certainty that the PEA based on these mineral resources
will be realized. Mineral resources that are not mineral reserves
do not have demonstrated economic viability.
Blackwater 2012 Highlights |
- Completed Preliminary Economic Assessment
- Completed 2012 year end mineral resource estimate upgrading
majority of mineralization into the Measured and Indicated resource
categories
- Initiated Provincial and Federal environmental process and
completed environmental baseline work
- Signing of two exploration agreements with First Nations and
subsequent approval of Multi-year Area Based exploration
permit
- Opening of regional office and sample preparation lab in
Vanderhoof, British Columbia
- Confirmed point of access for connection to British Columbia
hydro power
|
During 2013, the company plans to spend
approximately $60 million at
Blackwater, including $45 million for
completion of the Feasibility Study, progression of the permitting
and operation and development of camp infrastructure. The remaining
$15 million is related to capitalized
exploration.
Financial Update
New Gold finished 2012 with a cash balance of
$688 million(4). The
company has an additional $100
million of liquidity through an undrawn credit facility. The
consolidated debt position of the company at December 31, 2012 was $848
million(4) which included: face value
$300 million 7.00% senior unsecured
notes due in 2020 (book value - $293
million), face value $500
million of 6.25% senior unsecured notes due in 2022 (book
value - $490) and $65 million in El Morro funding loans. The
company had 476 million common shares outstanding at December 31, 2012.
Webcast and Conference Call
A webcast presentation to discuss these results
will be held on February 5, 2013, at
10:00 a.m. Eastern Time. Participants
may access the webcast by registering here or from our website at
www.newgold.com. You may also listen to the conference by calling
647-427-7450 or toll-free 1-888-231-8191 in North America. To listen to a recorded
playback after the event, please call 1-416-849-0833 or toll-free
1-855-859-2056 in North America -
Passcode 96531135. An archived webcast will also be available at
www.newgold.com following the event.
Detailed Reserve and
Resource Tables |
Mineral Reserves and Resources Summary as of December 31,
2012 |
|
Contained
Metals |
|
Gold
Koz |
Silver
Koz |
Copper
Mlbs |
Reserves |
|
|
|
Proven |
2,741 |
12,096 |
1,183 |
Probable |
5,001 |
19,135 |
2,095 |
Total P&P |
7,742 |
31,231 |
3,278 |
Resources |
|
|
|
Measured |
6,789 |
37,470 |
2,076 |
Indicated |
14,613 |
94,377 |
1,986 |
Total M&I |
21,403 |
131,847 |
4,061 |
Inferred |
4,383 |
84,620 |
1,114 |
See Notes to Mineral Reserve and Resource Statements
below for further detail on Reserve and Resource calculations.
|
Mineral Reserves
statement as at December 31, 2012 |
|
Metal grade |
Contained metal |
|
Tonnes
000's |
Gold
g/t |
Silver
g/t |
Copper
% |
Gold
Koz |
Silver
Koz |
Copper
Mlbs |
Mesquite |
|
|
|
|
|
|
|
Proven |
13,140 |
0.68 |
- |
- |
287 |
- |
- |
Probable |
114,409 |
0.56 |
- |
- |
2,055 |
- |
- |
Mesquite P&P |
127,549 |
0.57 |
- |
- |
2,342 |
- |
- |
Cerro San Pedro |
|
|
|
|
|
|
|
Proven |
21,100 |
0.52 |
17.1 |
- |
353 |
11,600 |
- |
Probable |
26,400 |
0.48 |
17.4 |
- |
407 |
14,800 |
- |
CSP P&P |
47,500 |
0.50 |
17.3 |
- |
760 |
26,400 |
- |
Peak |
|
|
|
|
|
|
|
Proven |
2,030 |
6.07 |
7.6 |
1.07 |
396 |
496 |
48 |
Probable |
2,020 |
3.90 |
7.0 |
1.20 |
253 |
455 |
53 |
Peak P&P |
4,050 |
4.99 |
7.3 |
1.13 |
649 |
951 |
101 |
New Afton |
|
|
|
|
|
|
|
Proven |
- |
- |
- |
- |
- |
- |
- |
Probable |
52,500 |
0.65 |
2.3 |
0.93 |
1,100 |
3,880 |
1,080 |
New Afton P&P |
52,500 |
0.65 |
2.3 |
0.93 |
1,100 |
3,880 |
1,080 |
El Morro |
|
100% Basis |
|
|
30%
Basis |
|
Proven |
307,949 |
0.57 |
- |
0.56 |
1,705 |
- |
1,135 |
Probable |
335,152 |
0.37 |
- |
0.44 |
1,186 |
- |
962 |
El Morro P&P |
643,101 |
0.47 |
- |
0.49 |
2,891 |
- |
2,097 |
|
Measured and
Indicated mineral Resource statement (inclusive of Reserves) as at
December 31, 2012 |
|
Metal grade |
Contained metal |
|
Tonnes
000's |
Gold
g/t |
Silver
g/t |
Copper
% |
Gold
Koz |
Silver
Koz |
Copper
Mlbs |
Mesquite |
|
|
|
|
|
|
|
Measured - oxide |
19,100 |
0.51 |
- |
- |
313 |
- |
- |
Indicated - oxide |
274,100 |
0.38 |
- |
- |
3,349 |
- |
- |
Meqsuite M&I - oxide |
293,200 |
0.39 |
- |
- |
3,662 |
- |
- |
|
|
|
|
|
|
|
|
Measured - non oxide |
4,900 |
0.88 |
- |
- |
139 |
- |
- |
Indicated - non oxide |
96,000 |
0.61 |
- |
- |
1,883 |
- |
- |
Mesquite M&I - non oxide |
100,900 |
0.62 |
- |
- |
2,022 |
- |
- |
Total Mesquite M&I |
394,100 |
0.45 |
- |
- |
5,684 |
- |
- |
Cerro San Pedro |
|
|
|
|
|
|
|
Measured - oxide |
27,100 |
0.34 |
15.0 |
- |
303 |
13,100 |
- |
Indicated - oxide |
49,000 |
0.24 |
13.0 |
- |
380 |
20,480 |
- |
CSP M&I - oxide |
76,100 |
0.28 |
13.7 |
- |
683 |
33,580 |
- |
|
|
|
|
|
|
|
|
Measured - sulphide |
15,200 |
0.47 |
11.9 |
- |
229 |
5,800 |
- |
Indicated - sulphide |
60,400 |
0.41 |
9.6 |
- |
791 |
18,600 |
- |
CSP M&I - sulphide |
75,600 |
0.42 |
10.1 |
- |
1,020 |
24,400 |
- |
Total CSP M&I |
151,700 |
0.35 |
11.9 |
- |
1,703 |
57,980 |
- |
Peak |
|
|
|
|
|
|
|
Measured |
2,700 |
5.74 |
7.5 |
1.05 |
494 |
650 |
62 |
Indicated |
3,200 |
3.75 |
6.8 |
1.19 |
386 |
700 |
84 |
Peak M&I |
5,900 |
4.66 |
7.1 |
1.13 |
880 |
1,350 |
146 |
New Afton |
|
|
|
|
|
|
|
A&B Zones |
|
|
|
|
|
|
|
Measured |
33,500 |
0.86 |
2.9 |
1.18 |
929 |
3,160 |
873 |
Indicated |
45,900 |
0.67 |
2.4 |
0.89 |
984 |
3,530 |
896 |
A&B Zone M&I |
79,400 |
0.75 |
2.6 |
1.01 |
1,913 |
6,690 |
1,769 |
C-Zone |
|
|
|
|
|
|
|
Measured |
400 |
0.60 |
1.3 |
0.73 |
8 |
20 |
6 |
Indicated |
2,900 |
0.63 |
1.3 |
0.68 |
58 |
120 |
43 |
C-Zone M&I |
3,300 |
0.62 |
1.3 |
0.68 |
66 |
140 |
49 |
Total New Afton M&I |
82,700 |
0.74 |
2.6 |
1.00 |
1,979 |
6,830 |
1,818 |
Blackwater |
|
|
|
|
|
|
|
Measured |
88,188 |
0.94 |
5.2 |
- |
2,670 |
14,740 |
- |
Indicated |
207,958 |
0.81 |
6.2 |
- |
5,400 |
41,450 |
- |
Blackwater M&I |
296,146 |
0.85 |
5.9 |
- |
8,070 |
56,190 |
- |
Capoose |
|
|
|
|
|
|
|
Indicated |
14,200 |
0.43 |
20.8 |
- |
196 |
9,497 |
- |
El Morro |
100%
Basis |
30%
Basis |
Measured |
307,949 |
0.57 |
- |
0.56 |
1,705 |
- |
1,135 |
Indicated |
335,152 |
0.37 |
- |
0.44 |
1,186 |
- |
962 |
El Morro M&I |
643,101 |
0.47 |
- |
0.49 |
2,891 |
- |
2,097 |
|
Inferred Resource statement as at
December 31, 2012 |
|
Metal grade |
Contained metal |
|
Tonnes
000's |
Gold
g/t |
Silver
g/t |
Copper
% |
Gold
Koz |
Silver
Koz |
Copper
Mlbs |
Mesquite |
|
|
|
|
|
|
|
Oxide |
35,200 |
0.33 |
- |
- |
373 |
- |
- |
Non oxide |
15,700 |
0.55 |
- |
- |
278 |
- |
- |
Mesquite Inferred |
50,900 |
0.40 |
- |
- |
651 |
- |
- |
Cerro San Pedro |
|
|
|
|
|
|
|
Oxides |
53,400 |
0.17 |
9.0 |
- |
300 |
15,400 |
- |
Sulphides |
50,500 |
0.34 |
8.5 |
- |
550 |
13,800 |
- |
CSP Inferred |
103,900 |
0.25 |
8.8 |
- |
850 |
29,200 |
- |
Peak |
1,700 |
2.64 |
4.8 |
1.13 |
144 |
261 |
42 |
New Afton |
|
|
|
|
|
|
|
A&B-Zone |
14,900 |
0.45 |
2.0 |
0.65 |
216 |
940 |
212 |
C-Zone |
13,600 |
0.70 |
1.5 |
0.76 |
307 |
670 |
228 |
New Afton Inferred |
28,400 |
0.57 |
1.8 |
0.70 |
523 |
1,610 |
440 |
Blackwater |
16,585 |
0.58 |
10.8 |
- |
310 |
5,760 |
- |
Capoose |
64,070 |
0.29 |
23.2 |
- |
595 |
47,789 |
- |
|
100%
Basis |
30%
Basis |
El Morro |
137,555 |
0.99 |
- |
0.70 |
1,310 |
- |
632 |
Notes to Mineral Reserve and Resource
Statements
Measured and Indicated mineral resources that
are not mineral reserves do not have demonstrated economic
viability as defined by a technical Feasibility Study. New Gold
reports its Measured and Indicated mineral resources inclusive of
its mineral reserves. Inferred mineral resources are not known with
the same degree of certainty as Measured and Indicated resources,
do not have demonstrated economic viability, and are exclusive of
mineral reserves. Mineral reserves have been estimated and reported
in accordance with the Canadian Institute of Mining, Metallurgy and
Petroleum ("CIM") definition standards and guidelines and Canadian
National Instrument 43-101 ("NI 43-101").
1) Mineral Reserves for the company's mineral
properties have been calculated based on the following metal prices
and lower cut-off criteria:
Mineral Property |
Gold
US$/oz |
Silver
US$/oz |
Copper
US$/lb |
Lower cutoff |
Mesquite |
$1,300 |
- |
- |
0.21 g/t Au - Oxide
reserves
0.41 g/t Au - Non-oxide reserves |
Cerro San Pedro |
$1,300 |
$24.00 |
- |
US$4.33/t NSR |
Peak Mines |
$1,300 |
$24.00 |
$3.00 |
A$120 - 253/t NSR |
New Afton |
$1,300 |
$24.00 |
$3.00 |
US$24/t NSR |
El Morro |
$1,350 |
- |
$3.00 |
0.20% CuEq |
2) Mineral Resources for the company's mineral properties have
been calculated based on the following metal prices and lower
cut-off criteria:
Mineral Property |
Gold
US$/oz |
Silver
US$/oz |
Copper
US$/lb |
Lower cut-off |
Mesquite |
$1,400 |
- |
- |
0.12 g/t Au - Oxide resources
0.24 g/t Au - Non-oxide resources |
Cerro San Pedro |
$1,400 |
$28.00 |
- |
0.10 g/t AuEq - Open pit oxide
resources
0.40 g/t AuEq - Open pit sulphide resources |
Peak Mines |
$1,400 |
$28.00 |
$3.25 |
A$97 - 137/t marginal NSR |
New Afton |
$1,400 |
$28.00 |
$3.25 |
0.40% CuEq |
El Morro |
$1,500 |
- |
$3.50 |
0.15% CuEq - Meas'd & Ind'cd o/p
resources
0.20% CuEq - Inferred u/g resources |
Blackwater |
$1,400 |
|
|
0.40 g/t AuEq |
Capoose |
$1,400 |
- |
- |
0.40 g/t AuEq |
Mineral resources have been estimated and
reported in accordance with CIM definition standards and guidelines
and Canadian NI 43-101.
3) Mineral resources are classified as Measured,
Indicated and Inferred resources and are reported based on
technical and economic parameters consistent with the methods most
suitable for their potential commercial exploitation. Where
different mining and/or processing methods might be applied to
different portions of a mineral resource, the designators 'open
pit' and 'underground' have been applied to indicate envisioned
mining method. Likewise the designators 'oxide', 'non-oxide' and
'sulphide' have been applied to indicate the type of
mineralization as it relates to appropriate mineral processing
method and expected payable metal recoveries. The estimates of
mineral Reserves and mineral Resources may be mutually affected by
environmental, permitting, legal, title, taxation, sociopolitical,
marketing and other relevant issues. Additional details regarding
mineral reserve and resource estimates, classification and
reporting parameters for each of New Gold's mineral properties are
provided in the respective NI 43-101 Technical Reports which are
available on SEDAR.
4) Qualified Person: The preparation of New
Gold's mineral reserve and resource statements has been done by
Qualified Persons as defined under Canadian National Instrument
43-101 under the oversight and review of Mark Petersen, a Qualified Person under National
Instrument 43-101 and employee of New Gold.
About New Gold Inc.
New Gold is an intermediate gold mining company. The company has a
portfolio of four producing assets and two significant development
projects. The combination of the Mesquite Mine in the United
States, the Cerro San Pedro Mine in Mexico, the Peak Mines in
Australia and the New Afton Mine in Canada position New Gold as one
of the lowest cost producers in the industry. In 2013, the company
is forecasting between 440,000 and 480,000 ounces of gold
production. In addition to its four operating mines, New Gold owns
100% of the exciting Blackwater project in Canada and 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 use of forward-looking
terminology such as "plans", "expects", "is expected", "budget",
"scheduled", "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. 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 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 international, 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 obtaining the necessary
permits for the Blackwater project, in Mexico where the Cerro San Pedro mine has a
history of ongoing legal challenges related to our EIS and
Chile where the courts have
temporarily suspended the approval of the environmental permit for
the El Morro project; 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 the company is or may become a
party to; diminishing quantities or grades of reserves;
competition; loss of key employees; additional funding
requirements; actual results of current exploration or reclamation
activities; uncertainties inherent to economic studies in respect
of the PEA for the Blackwater project; 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 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 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 in this news release 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
The scientific and technical information in this
news release has been reviewed and approved by Mark Petersen, a Qualified Person under National
Instrument 43-101 and employee of New Gold.
(1) TOTAL CASH COSTS
"Total cash costs" 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-IFRS measure. Total cash cost presented does not have a
standardized meaning prescribed by IFRS 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 IFRS and is not necessarily
indicative of operating costs presented under IFRS. A
reconciliation will be provided in the MD&A accompanying the
quarterly financial statements.
(2) ALL-IN SUSTAINING CASH COSTS
The company is working with the World Gold
Council and is in the process of adopting an "all-in sustaining
cash costs" measure that the company believes more fully defines
the total costs associated with producing gold. Although the
definition is still preliminary, all-in sustaining cash costs, as
currently defined, includes: by-product cash costs, corporate
general and administrative expenses, exploration expense and
sustaining capital. This metric is a non-IFRS measure.
(3) PEA - ADDITIONAL CAUTIONARY NOTE
This note regarding the preliminary economic
assessment ("PEA") is in addition to cautionary language already
included in this news release as required under NI 43-101. The
Blackwater PEA is preliminary in nature and includes Inferred
mineral resources that are considered too speculative geologically
to have the economic considerations applied to them that would
enable them to be categorized as mineral reserves, and there is no
certainty that the PEA based on these mineral resources will be
realized. Mineral resources that are not mineral reserves do not
have demonstrated economic viability. This news release includes
information on New Gold's PEA with respect to the Blackwater
Project, which was outlined in the PEA Technical Report filed on
October 10, 2012. As disclosed
in the news release, New Gold has, since the date of the PEA,
completed a non-material update of the mineral resource estimate
for the Blackwater Project. Although the PEA represents useful,
accurate and reliable information based on the information
available at the time of its publication, and provides an important
indicator as to the economic potential of the Blackwater Project,
the PEA is based on mineral resources estimates with an effective
date of July 27, 2012, which do not
reflect drilling conducted since their effective date, and the PEA
does not reflect the latest mineral resource estimate discussed in
this news release. Certain assumptions used in the PEA, some of
which relate to the July 27, 2012
mineral resource estimate, may have changed from those used for the
new resource estimate, causing a variation of parameters.
Moreover, the updated mineral resource estimate may impact how New
Gold intends to develop the deposit, including pit outlines,
production rates and mine life.
(4) UNAUDITED FINANCIAL INFORMATION
The cash and debt balance and capital
expenditure information provided are unaudited figures and may
differ slightly from the final results included in the 2012 annual
audited financial statements and MD&A.
SOURCE New Gold Inc.