Provides Preliminary Third Quarter Production and Cost
Results
(All figures are in US dollars unless otherwise indicated)
VANCOUVER,
Oct. 21, 2013 /PRNewswire/ - New Gold
Inc. ("New Gold") (TSX:NGD) (NYSE MKT:NGD) today announces that its
New Afton Mine has successfully achieved the targeted increase in
throughput to 12,000 tonnes per day, from a design capacity of
11,000 tonnes per day, three months ahead of schedule. The
combination of the increased throughput, and higher grades and
recoveries, resulted in increased production of both gold and
copper during the third quarter at New Afton. As the company is
hosting an analyst tour to New Afton on October 22, 2013, New Gold today provides
preliminary third quarter production and cost results for New Afton
as well as the balance of its portfolio of operating mines. The
preliminary production and cost information provided reflects
approximate figures and may differ slightly from the company's
third quarter earnings, which will be announced on October 29, 2013.
New Afton Update
- Average mill throughput of 12,396 tonnes per day in
September 2013
-
- Represents 13% increase over 11,000 tonne per day design
capacity
- Average mill throughput of 11,967 tonnes per day during third
quarter of 2013
- Gold grade continued to reconcile positively against block
model
- 80% increase in gold production to 25,220 ounces from 14,014
ounces in the third quarter of 2012
- 88% increase in copper production to 20.9 million pounds from
11.1 million pounds
- Operation successfully tested over five-day period at rates of
14,000 to 15,500 tonnes per day
- Continued positive exploration results at both the C-Zone and
East Cave Extension targets
Consolidated 2013 Third Quarter Production
and Cost Summary
- Lowest cost quarter in the company's history
- All-in sustaining costs(1) of $779 per ounce
-
- Total cash costs(2) of $280 per ounce compared to $443 per ounce in the prior year period
- Gold production of 94,038 ounces compared to 104,577 ounces in
the third quarter of 2012
-
- Copper production increased by 67% to 23.7 million pounds from
14.2 million pounds
- Cash and cash equivalents of $429
million at September 30,
2013
"The third quarter saw our company deliver on a
number of very important objectives, however, it also brought with
it certain challenges," stated Randall
Oliphant, Executive Chairman. "The combination of
successfully increasing New Afton's throughput and further reducing
our costs positions us well going forward. At the same time, we are
disappointed that the operational challenges we encountered at
Cerro San Pedro and Mesquite have negatively impacted our quarterly
and year-to-date production."
New Gold will provide an update on its
production and cost outlook for the fourth quarter and full year
2013 as part of its third quarter earnings announcement on
October 29, 2013.
New Afton Update
Successfully Achieved Targeted Throughput
Increase Ahead of Schedule
New Afton continued to build on its strong first half performance
during the quarter. New Afton achieved records in multiple key
operational categories during the quarter, including: average daily
throughput, gold and copper grades, gold recovery and, most
importantly, gold and copper production. At the beginning of 2013,
New Gold's objective was to steadily increase the throughput at New
Afton beyond the 11,000 tonne per day design capacity, with the
goal of averaging 12,000 tonnes per day by the end of the year.
Through the dedicated efforts of the New Afton team, the mine
reached this goal three months ahead of schedule, averaging 12,396
tonnes per day during the month of September. The combination of
this record throughput, robust gold and copper grades, and steady
recoveries resulted in continued increases in production of both
gold and copper at New Afton. Gold grades were 0.82 grams per
tonne, up from 0.67 grams per tonne in the prior year quarter and
0.78 grams per tonne in the second quarter of 2013. Copper grades
were 0.98% compared to 0.72% in the prior year quarter and 0.96% in
the second quarter of 2013. Recoveries were 87% for gold and 88%
for copper, significantly higher than the third quarter of 2012 and
consistent with the second quarter of 2013, despite the impact of
the higher throughput. New Afton produced 25,220 ounces of gold and
20.9 million pounds of copper during the third quarter of 2013.
With year-to-date production of 61,966 ounces of gold and 51.4
million pounds of copper, New Afton remains well on track to
achieve its full year 2013 production estimates of 75,000 to 85,000
ounces of gold and 66 to 74 million pounds of copper.
Looking to Unlock Further Value with Additional
Throughput Expansion Opportunity
In parallel with reaching the interim target of the 12,000 tonne
per day throughput rate, the New Afton team has also been looking
at opportunities to further increase the value of the operation by
driving towards an even higher throughput level. During the third
quarter, over a five-day period, the operation was run at rates
between 14,000 and 15,500 tonnes per day to better assess which
elements of the mining and milling processes could be further
optimized at these higher levels. The underground mining operations
performed well at the higher rates and demonstrated an ability to
readily move well beyond 12,000 tonnes of ore to surface daily. The
combination of 77 completed drawbells and the excess capacity of
the crusher and conveyor system provides flexibility for the
underground operations to move to a sustainably higher rate. The
mill also handled the higher throughput levels, however, as
anticipated, grind size increased and a decrease in recovery was
seen as the mill moved to progressively higher rates. Currently,
the company is evaluating low capital cost alternatives that should
enable the mine to yield recoveries from the high 80% to low 90%
rate, depending on ore type, when operating at higher throughput
levels. Though the trade-offs are still in the process of being
considered, this could include the addition of a tower mill for
tertiary grinding at the back end of the grinding circuit as well
as some additional flotation capacity.
As New Afton generated over 60% of New Gold's
earnings from mine operations in the second quarter of 2013, the
company believes that looking at low incremental capital cost
alternatives to increase the annual production of gold and copper,
thus further increasing near-term cash flow, is one of the most
compelling strategies to generate value for the benefit of New
Gold's shareholders.
After achieving the 12,000 tonne per day target
ahead of schedule, New Gold's goal is to now move New Afton toward
a sustainable 14,000 tonne per day operation. The company intends
to provide a further update on the timeline and estimated capital
cost to achieve this objective as part of its annual investor and
analyst day in early 2014.
Focused on the Future with Ongoing
Exploration
The company's exploration efforts at New Afton continue to focus on
two key areas, the East Cave Extension and the C-Zone. The East
Cave Extension is an area of mineralization that extends laterally
from the main B-Zone reserve and lies beneath the previously mined
Afton open pit. In the second half of 2012, the company
successfully delineated additional resources in this area to extend
New Afton's mine life. In 2013, New Gold's exploration team
completed an additional 58 holes totaling 17,775 metres in this
area with the goal of, once again, adding to the mineral reserve
base. The results of the East Cave drilling program will be
incorporated into an updated mineral resource and reserve estimate
scheduled for completion at year-end.
The C-Zone resource, which represents the second
area of exploration focus, lies immediately down plunge of the main
B-Zone reserve currently being mined. The C-Zone mineral resource,
summarized below, was last updated on May 1,
2013 and incorporated the results of the 2012 drill program
and five holes completed in early 2013.
New Afton C-Zone
Mineral Resource Estimate |
|
May 2013 Mineral
Resource |
|
Tonnes (000's) |
Gold
(g/t) |
Silver
(g/t) |
Copper
(%) |
Gold
(Koz) |
Silver
(Koz) |
Copper
(Mlbs) |
Measured
Indicated
Total Measured & Indicated |
1,282
11,205
12,486 |
0.75
0.78
0.77 |
1.35
1.52
1.50 |
0.79
0.77
0.77 |
31
280
311 |
56
548
602 |
22
189
211 |
Inferred |
20,221 |
0.62 |
1.42 |
0.68 |
401 |
923 |
301 |
The 2013 C-Zone exploration program concluded in
the third quarter, with 41 holes totaling 26,800 metres having been
completed. Highlights of the 2013 C-Zone exploration program post
the May resource update are shown below:
New Afton 2013
C-Zone Highlights |
Drill Hole |
From (metres) |
To (metres) |
Interval (metres) |
Gold
(g/t) |
Copper
(%) |
EA13-031
EA13-032
EA13-034
EA13-036
EA13-037
EA13-045
EA13-046
EA13-054
EA13-056
EA13-076
EA13-088 |
644
478
744
592
566
526
722
504
740
372
514 |
708
622
810
678
652
588
792
628
820
416
596 |
64
144
66
86
86
62
70
124
80
44
82 |
0.86
0.92
0.90
1.51
0.66
0.85
1.13
1.08
0.70
0.54
1.95 |
1.33
1.10
0.93
1.66
1.38
1.13
1.06
1.52
0.48
0.96
2.57 |
Note: All of the C-Zone assay results are
available under the company's profile on SEDAR at www.sedar.com as
an Appendix to this news release as filed on SEDAR.
The 2013 New Afton drilling program has
significantly increased the amount of drill hole data supporting
the C-Zone mineral resource, both extending its limits and adding
confidence to the distribution of metal grades and classification
of the resource.
With the benefit of the completion of an updated
C-Zone mineral resource estimate at year-end, the company plans to
provide an update on how the C-Zone may factor into New Afton's
longer-term mine plan at its annual investor and analyst day to be
held in early 2014.
Preliminary Production and Cost
Results
|
New Gold 2013 Third Quarter
Summary Operational Results |
|
|
Three months ended |
|
Nine months ended |
|
|
|
|
September 30, |
|
September 30, |
|
|
|
|
2013 |
2012 |
|
2013 |
2012 |
Gold Production (thousand ounces) |
|
|
|
|
|
|
|
|
New Afton |
|
|
|
25.2 |
14.0 |
|
62.0 |
14.0 |
Cerro San Pedro |
|
|
|
24.0 |
34.5 |
|
80.6 |
105.4 |
Mesquite |
|
|
|
20.8 |
32.2 |
|
72.1 |
112.8 |
Peak Mines |
|
|
|
23.9 |
23.9 |
|
76.5 |
66.7 |
Total Gold Production |
|
|
|
94.0 |
104.6 |
|
291.2 |
299.0 |
|
|
|
|
|
|
|
|
|
Total Gold Sales |
|
|
|
94.1 |
95.2 |
|
287.3 |
285.8 |
Average realized gold price ($ per
ounce) |
|
|
|
$1,359 |
$1,560 |
|
$1,375 |
$1,540 |
|
|
|
|
|
|
|
|
|
Silver Production (thousand ounces) |
|
|
|
|
|
|
|
|
Cerro San Pedro |
|
|
|
219.4 |
488.3 |
|
1,003.1 |
1,537.2 |
|
|
|
|
|
|
|
|
|
Total Silver Sales |
|
|
|
223.7 |
492.3 |
|
997.2 |
1,506.1 |
Average realized silver price ($ per
ounce) |
|
|
|
$21.31 |
$30.09 |
|
$24.59 |
$30.32 |
|
|
|
|
|
|
|
|
|
Copper Production (million pounds) |
|
|
|
|
|
|
|
|
New Afton |
|
|
|
20.9 |
11.1 |
|
51.4 |
11.1 |
Peak Mines |
|
|
|
2.8 |
3.1 |
|
9.9 |
10.8 |
Total Copper Production |
|
|
|
23.7 |
14.2 |
|
61.4 |
21.9 |
|
|
|
|
|
|
|
|
|
Total Copper Sales |
|
|
|
23.5 |
9.2 |
|
58.8 |
15.9 |
Average realized copper price ($ per
pound) |
|
|
|
$3.25 |
$3.69 |
|
$3.24 |
$3.60 |
|
|
|
|
|
|
|
|
|
Total Cash Costs(2) ($ per
ounce) |
|
|
|
|
|
|
|
|
New Afton |
|
|
|
($1,310) |
($955) |
|
($1,104) |
($955) |
Cerro San Pedro |
|
|
|
723 |
218 |
|
605 |
205 |
Mesquite |
|
|
|
1,017 |
722 |
|
936 |
664 |
Peak Mines |
|
|
|
856 |
796 |
|
874 |
772 |
Total Cash Costs(2) |
|
|
|
$280 |
$443 |
|
$399 |
$486 |
|
|
|
|
|
|
|
|
|
All-in Sustaining Costs(1) ($ per
ounce) |
|
|
|
|
|
|
|
|
New Afton |
|
|
|
($365) |
$1,001 |
|
($191) |
$1,023 |
Cerro San Pedro |
|
|
|
771 |
273 |
|
674 |
338 |
Mesquite |
|
|
|
1,098 |
822 |
|
1,162 |
728 |
Peak Mines |
|
|
|
1,332 |
1,478 |
|
1,405 |
1,381 |
All-in Sustaining
Costs(1) |
|
|
|
$779 |
$869 |
|
$905 |
$830 |
Gold Production
New Afton - As previously noted, New
Afton's third quarter gold production increased by 80% when
compared to the same period of the prior year. The combination of
higher daily throughput, higher gold grades, which continue to
reconcile favourably to the company's plans, and higher gold
recoveries led to the strong production. Collectively, these
positive factors culminated in New Afton's 2013 third quarter also
delivering continued quarter-over-quarter improvement, with
production increasing by 16% over the second quarter of 2013. The
third quarter was the highest gold production quarter for New Afton
since it commenced production in mid-2012.
Cerro San Pedro - Production at Cerro San
Pedro was below that of the prior year periods due to a combination
of lower ore tonnes placed on the leach pad and lower recoveries.
The placement of lower ore tonnes was primarily driven by the
impact of the previously announced pit wall movement. As noted in
New Gold's August 28, 2013 news
release regarding the pit wall movement, the company anticipated
approximately 15,000 ounces of Cerro San Pedro's 2013 gold
production would be deferred to future periods if the area
immediately below the wedge of displaced material could not be
accessed during the current phase of mining. The area impacted by
the pit wall movement is now planned to be mined during the next
phase of mining in 2014 and 2015.
As part of the same August news release, the
company indicated that recoveries from the leach pad had been below
expectations. The continuation of these lower recoveries also
contributed to the lower production in the third quarter. Over the
course of the quarter, the metallurgical team adjusted the leach
solution by increasing cyanide and sodium hydroxide levels as well
as adding more lime to the ore trucks. The goal of these
adjustments is to optimize the leach solution in an effort to
maximize the recoveries from the multiple ore types at Cerro San
Pedro over time. At the same time, as a result of the above noted
pit wall movement, the company had to shift its mining efforts
further towards the bottom of the open pit, where the ore is more
sulphidic and thus has lower recoveries, earlier than planned.
Mining is scheduled to remain in this lower area through early 2014
after which the next phase of mining will move back to the top of
the ore body where the material is more oxidized and should have
recoveries more consistent with historical levels.
As previously disclosed, the combination of the
pit wall movement and lower recoveries will result in Cerro San
Pedro's 2013 gold production being below the previous expectation
of 140,000 to 150,000 ounces.
Mesquite - Mesquite's production in both
the three and nine month periods ended September 30, 2013 was below that of the prior
year periods primarily due to mining of ore below both reserve
grade and grades mined in the first nine months of 2012. The
planned mining of lower grade ore was further impacted by a
negative variance between realized and planned grades in the area
of the pit that was mined during the third quarter. Per the mine
plan, mining has since moved to a different area of the mine. As
noted in the company's second quarter earnings results, due to the
lower year-to-date production, Mesquite's 2013 gold production
outlook will be below its guidance range of 130,000 to 140,000
ounces. Mesquite is, however, still expected to have its strongest
quarter of the year in the fourth quarter.
Peak Mines - Gold production at the Peak
Mines was in line with the prior year quarter. For the nine month
period ended September 30, 2013, all
of the key production drivers, tonnes processed, gold grades and
recoveries increased, resulting in a 15% increase in gold
production when compared to the same period of the prior year. With
its strong year-to-date performance, Peak Mines' full year gold
production target remains in line with the original guidance range
of 95,000 to 105,000 ounces.
Copper Production
Copper production increased by 67% when compared
to the third quarter of 2012, driven by New Afton's strong
contribution. The continued throughput increases at New Afton,
coupled with higher grades and steady recoveries, led to a 12%
increase in copper production compared to the second quarter of
2013. At the Peak Mines, copper production was consistent with the
prior year periods as increased tonnes processed largely offset the
planned mining of lower copper grades. 2013 full year copper
production remains in line with the company's guidance of 78 to 88
million pounds.
Silver Production
Silver production in both the three and nine
month periods ended September 30,
2013 was below that of the prior year periods for reasons
consistent with those noted above regarding Cerro San Pedro's gold
production.
All-in Sustaining Costs(1) and Total
Cash Costs(2)
On a consolidated basis, during the third
quarter, both the all-in sustaining costs(1) and total
cash costs(2) were the lowest in New Gold's history.
All-in sustaining costs(1), which was formally adopted
as the new industry cost standard earlier this year, decreased by
$90 per ounce compared to the prior
year quarter and $152 per ounce when
compared to the second quarter of 2013. Total cash
costs(2) decreased by $163
per ounce compared to the prior year quarter and $150 per ounce compared to the second quarter of
2013. The decreases in both cost measures were attributable to the
significant contribution of the low cost New Afton Mine and the
company's dedicated focus on maintaining its position as one of the
industry's lowest cost producers.
New Afton - Costs decreased when compared
to the third quarter of 2012 as a result of the mine's strong
operating performance. The increase in copper production at New
Afton more than offset the decrease in the average realized copper
price when compared to the third quarter of the prior year. New
Afton's robust copper revenue positions the operation well to
continue being a high margin contributor to New Gold's portfolio
going forward.
Cerro San Pedro - The increase in cash
costs when compared to the prior periods is attributable to a
combination of lower silver by-product revenue and the fixed
portion of the operation's costs being attributed to a lower gold
production base. Cerro San Pedro generated $10 million, or approximately $205 per ounce, less silver by-product revenue
when compared to the third quarter of the prior year due to a
combination of lower silver by-product sales volumes and lower
average realized silver prices. Cerro San Pedro's all-in sustaining
costs(1) of $771 per ounce
continue to be well below the industry average.
Mesquite - Costs at Mesquite were higher
than the prior year periods due to mining of lower grade ore,
resulting in a lower production base. The impact of the lower
production was partially offset by a decrease in the mine's gross
operating costs during both the three and nine month periods ended
September 30, 2013. Mesquite's all-in
sustaining costs(1) decreased by $272 per ounce when compared to the second
quarter of 2013.
Peak Mines - The change in total cash
costs(2) at the Peak Mines during the quarter and
year-to-date period was attributable to a combination of lower
copper by-product revenue and increased mining costs from mining
deeper portions of the Peak ore bodies. This was partially offset
by the depreciation of the Australian dollar and the higher gold
production base. As anticipated, total cash costs(2)
decreased by $92 per ounce and all-in
sustaining costs(1) decreased by $170 per ounce when compared to the second
quarter of 2013.
Consistent with the World Gold Council's all-in
sustaining costs(1) guidance announced on June 27, 2013, New Gold will report this new cost
metric going forward. This new non-GAAP measure is intended to
provide further transparency into costs associated with producing
gold. For a period of time, New Gold will also continue to show its
total cash costs(2) for purposes of comparability to the
company's prior year periods.
New Gold's third quarter all-in sustaining
costs(1) were $779 per
ounce, demonstrating a steady and meaningful decrease from
$1,004 per ounce in the first quarter
of 2013 and $931 per ounce in the
second quarter. The company continues to further establish itself
as one of the lowest cost producers in the industry.
"Two of our four operations, Peak Mines and
particularly New Afton, had strong quarters, while Cerro San Pedro
and Mesquite faced challenges," stated Robert Gallagher, President and Chief Executive
Officer. "We are very focused on improving the performance of our
two open pit mines, while also ensuring New Afton and Peak Mines
finish the year strongly."
Balance Sheet
At September 30,
2013, the key components of New Gold's consolidated
statements of financial position included $429 million in cash and cash equivalents and
$860 million in long-term debt. The
components of the long-term debt are: $300
million of 7.00% face value senior unsecured notes due in
April 2020, $500 million of 6.25% face value senior unsecured
notes due in November 2022 and
$76 million in El Morro funding
loans, repayable out of a portion of New Gold's share of El Morro
cash flow upon the start of production.
Webcast and Conference Call
New Gold plans to announce its third quarter
financial results, including an update on its 2013 outlook, prior
to the market opening on Tuesday, October
29, 2013. A webcast and conference call will be held on
October 29th at
9:00 a.m. Eastern Time to discuss the
results. Participants may listen to the webcast by registering on
our website at www.newgold.com. You may also listen to the
conference by calling toll-free 1-888-231-8191 or 1-647-427-7450
outside of Canada and the U.S. To
listen to a recorded playback of the call after the event, please
call toll-free 1-855-859-2056 or 1-416-849-0833 outside of
Canada and the U.S. - Passcode
87299582. An archived webcast will also be available at
www.newgold.com following the event.
About New Gold Inc.
New Gold is an intermediate gold mining company.
The company has a portfolio of four producing assets and three
significant development projects. The New Afton Mine in
Canada, the Cerro San Pedro Mine
in Mexico, the Mesquite Mine in
the United States and the Peak
Mines in Australia provide the
company with its current production base. In addition, New Gold
owns 100% of the Blackwater and
Rainy River projects, both in
Canada, as well as 30% of the El
Morro project located in Chile.
New Gold's objective is to continue to establish itself as a
leading intermediate producer, focused on the environment and
sustainability. 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 Inc.'s
("New Gold) future financial or operating performance as well as
information respecting its assets, 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. Without
limiting the foregoing, examples of forward-looking information in
this news release include, among others, statements with respect
to: New Gold's guidance for production, planned modifications to
operations (and the cost of any such modifications) and potential
opportunities to increase recovery rates, throughput rates and
value, the expected impact on recoveries of adjustments to the
leach solution at Cerro San Pedro, the estimation of mineral
reserves and resources and the realization of mineral reserves and
resources (including grades), expected future mining activities,
grades and recovery rates and the timing and amount of estimated
future production (including mining and milling rates), the
expected life of New Gold's mines,, exploration potential and the
result of future exploration activities.
All such forward-looking statements are based on
the reasonable 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. In addition to
assumptions specifically identified in this news release, the key
assumptions and estimates are discussed in New Gold's most recent
interim management discussion and analysis and technical reports
filed at www.sedar.com. The estimates and assumptions upon which
the forward-looking statements in this news release are based 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; price volatility in the spot and forward markets for
commodities; fluctuations in the international currency markets and
in the rates of exchange of the currencies of Canada, the United
States, Australia and
Mexico; 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 legislation
or regulation, or political or economic developments, in
Canada, the United States, Australia and Mexico; the speculative nature of mineral
exploration and development, including the risks of obtaining and
maintaining the validity and enforceability of the necessary
licences and permits and complying with the permitting requirements
of each jurisdiction in which New Gold operates, including, but not
limited to in Mexico, where Cerro
San Pedro has a history of ongoing legal challenges related to New
Gold's environmental authorization (EIS);; 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; diminishing quantities
or grades of Reserves; loss of key employees; additional funding
requirements; rising costs of labour, supplies, fuel and equipment;
actual results of current exploration or reclamation activities;
uncertainties inherent to mining economic studies; changes in
parameters as plans continue to be refined; accidents; labour
disputes; defective title to mineral claims or property or contests
over claims to mineral properties; and unexpected delays and costs
inherent to consulting and accommodating rights of First Nations.
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 (and, in respect to information related to
the acquisition of Rainy River
and/or the Rainy River Gold Project, in Rainy River'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 of New Gold 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 National
Instrument 43-101 ("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 November 27, 2010.
While the terms "Mineral Resource", "Measured Mineral Resource",
"Indicated Mineral Resource" and "Inferred Mineral Resource" are
recognized and required by Canadian securities 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 pre-feasibility
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 officer of New Gold. For additional
information regarding such scientific and technical information,
refer to New Gold's annual information form dated March 27, 2013, as well as the company's press
release entitled "New Gold Announces 2013 First Quarter Results -
Increases Gold and Copper Resources at New Afton C-Zone by Over 300
Percent" dated May 1, 2013.
All New Gold exploration drill hole samples are
analyzed by independent analytical laboratories. Gold and copper
analyses for the New Afton exploration project are done via fire
assay with AA finish for gold and induction coupled plasma
spectrophotometry for copper. The company maintains a strict
Quality Assurance / Quality Control ("QA/QC") program using
industry best practices that are consistent with the QA/QC
protocols in use at all of its exploration and development
projects. Key elements of New Gold's QA/QC program include
verifiable chain of custody of samples, regular insertion of
certified reference standards and blanks, and duplicate check and
independent umpire assays. Industry standard 63.5 millimetre
diameter diamond drill core is sampled at regular 2 metre
intervals, halved and shipped in sealed bags to Activation
Laboratories in Kamloops, British
Columbia. Independent umpire check analyses are completed by
SGS Laboratories, Vancouver, British
Columbia.
Non-GAAP Measures
(1) ALL-IN SUSTAINING COSTS
Consistent with the guidance announced earlier
in 2013 from the World Gold Council, an association of various gold
mining companies from around the world of which New Gold is a
member, New Gold defines "all-in sustaining costs" as the sum of
total cash costs, sustaining capital expenditures, corporate
general & administrative costs, capitalized and expensed
exploration that is sustaining in nature and environmental
reclamation costs. New Gold believes this non-GAAP measure provides
further transparency into costs associated with producing gold and
will assist analysts, investors and other stakeholders of the
company in assessing its operating performance, its ability to
generate free cash flow from current operations and its overall
value. All-in sustaining costs constitute a non-GAAP measure and
are intended to provide additional information only and do not have
any standardized meaning under IFRS. They should not be considered
in isolation or as a substitute for measures of performance
prepared in accordance with IFRS. Other companies may calculate
these measures differently. A reconciliation to the nearest IFRS
measure will be provided in the MD&A accompanying the quarterly
financial statements.
(2) TOTAL CASH COSTS
"Total cash costs" per ounce figures are
non-GAAP measures which 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 costs 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 costs on a sales basis. Total cash costs include
mine site operating costs such as mining, processing,
administration, royalties and production taxes, but are exclusive
of amortization, reclamation, capital and exploration costs. Total
cash costs are 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 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 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 to the nearest IFRS measure will be
provided in the MD&A accompanying the quarterly financial
statements.
SOURCE New Gold Inc.