(All dollar figures are in US dollars unless otherwise
indicated)
TORONTO, Feb. 4, 2015 /PRNewswire/ - New Gold Inc. ("New
Gold") (TSX:NGD) (NYSE MKT:NGD) today announces its 2014 fourth
quarter and full-year operational results, 2015 guidance and
updated year-end mineral reserves and resources. The preliminary
information provided for production, sales, all-in sustaining
costs(1) and total cash costs(2) are
approximate figures and may differ from the final results in the
2014 annual audited financial statements and management's
discussion and analysis.
2014 Highlights
- Delivered on full-year gold production guidance and beat copper
production and cost guidance:
- Gold production of 380,135 ounces
- Copper production of 101.5 million pounds
- All-in sustaining costs(1) of $779 per ounce, a $120 per ounce decrease from 2013
- Record-low total cash costs(2) of $312 per ounce, a $65 per ounce decrease from 2013
- Fourth quarter provided highest quarterly gold production of
the year with 105,992 ounces
- Year-end cash balance of $371
million
- 2014 year-end mineral reserves totaling 17.6 million ounces of
gold, 2.8 billion pounds of copper and 82 million ounces of
silver
- Received Federal and Provincial approval of Rainy River's Environmental Assessment in
January 2015
2015 GUIDANCE
- Increased gold, copper and silver production expected in 2015
at continued low cost:
- Gold production to increase by approximately 8% to between
390,000 and 430,000 ounces
- Copper production to increase to between 100 and 112 million
pounds
- All-in sustaining costs(1) expected to remain among
the lowest in the industry at $745 to
$785 per ounce
- Total cash costs(2) to be between $340 and $380 per ounce
- Sustaining capital expenditures expected to decrease by
approximately 8% to $120 million
- New Afton mill expansion remains on schedule and on budget for
mid-2015 commissioning
"2014 was a very important year for our company," stated
Randall Oliphant, Executive
Chairman. "Our operations achieved the lowest costs in our history.
We also successfully advanced our portfolio of growth projects. We
recently achieved a significant milestone with the receipt of the
Rainy River environmental permits, we are on schedule for
commissioning of the New Afton mill expansion in the middle of this
year and we completed a scoping study for the C-zone which should
extend New Afton's mine life."
"New Gold is starting 2015 with strong momentum," added Mr.
Oliphant. "We are scheduled to increase production of all three
metals we produce and, importantly, will do so while maintaining
our low-cost position. Our strategy is to move into longer
lived, larger scale and lower cost operations. We look forward
to executing on this strategy through the development of
Rainy River and our other
projects."
FINANCIAL UPDATE
New Gold's 2014 year-end cash and cash equivalents were
$371 million. In addition, the
company has a $300 million revolving
credit facility of which $54 million
has been used to issue letters of credit with the balance remaining
undrawn. At the end of 2014, the face value of the company's
long-term debt was $888 million (book
value – $874 million). The components
of the debt include: $300 million of
7.00% face value senior unsecured notes due in April of 2020,
$500 million of 6.25% face value
senior unsecured notes due in November of 2022, and $88 in El Morro funding loans, repayable out of a
portion of New Gold's 30% share of El Morro cash flow upon the
start of production. The company currently has approximately 508
million shares outstanding.
As part of New Gold's annual year-end review, the company
assesses the carrying value of its portfolio of assets. This
assessment takes into account, among other things, the impact of
lower commodity prices, the estimated timelines to production for
development projects, current mineral reserves and resources and
updated mine plans. Preliminary analysis indicates a likely
reduction in the total carrying value of the company's assets of
$350 to $450 million, with the
majority of this related to the company's Blackwater project.
PRELIMINARY 2014 PRODUCTION AND COST RESULTS
GOLD PRODUCTION
The fourth quarter provided the company with its highest
quarterly production of the year which led to full-year production
meeting the company's guidance range of 380,000 to 420,000 ounces.
Production during the quarter of 105,992 ounces remained consistent
with the prior-year quarter, as scheduled increases in production
at Mesquite and Cerro San Pedro were offset by a decrease in
production at the Peak Mines due to unscheduled mill downtime. For
the full year, increased production at New Afton was offset by an
expected decrease in production at Cerro San Pedro, resulting in
lower consolidated production relative to 2013.
New Afton
Gold production at New Afton during the fourth quarter of 25,301
ounces remained consistent with the prior-year quarter as a 6%
increase in tonnes processed offset a slight decrease in gold grade
and lower recovery from the combination of the higher throughput
and lower grade. 2014 full-year gold production of 104,589 ounces
increased by 20% relative to 2013. The increase in production was
driven by the combination of a 17% increase in throughput and a 4%
increase in grade, which was only partially offset by an expected
2% decrease in recovery stemming from the higher throughput. New
Afton's full-year gold production was in the middle of its guidance
range of 102,000 to 112,000 ounces.
Mesquite
Mesquite delivered its highest quarterly production of 2014 in
the fourth quarter. Production during the quarter of 36,235 ounces
was 10,000 ounces higher than the third quarter of 2014 and also
increased relative to the prior-year quarter. Fourth quarter
production benefitted from a combination of an increase in ore
tonnes placed on the leach pad and higher grade during the second
half of 2014. Production during the year of 106,670 ounces remained
consistent with 2013 as increased grade offset a 5% decrease in ore
tonnes placed resulting from the focus on waste stripping in the
first half of 2014. Mesquite's full-year production was below its
guidance range of 113,000 to 123,000 ounces primarily as a result
of a large number of recoverable ounces being placed on the leach
pad towards the end of the year and thus not having sufficient time
to fully work through the leach process. This has positively
impacted production in early 2015 where Mesquite produced 11,399
ounces of gold in January.
NEW GOLD SUMMARY
OPERATIONAL RESULTS
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Three months ended
December 31
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Twelve months
ended December 31
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2014
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2013
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2014
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2013
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GOLD PRODUCTION
(thousand ounces)
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New Afton
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25.3
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25.2
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104.6
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87.2
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Mesquite
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36.2
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34.9
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106.7
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107.0
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Peak Mines
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21.9
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24.2
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99.0
|
100.7
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Cerro San
Pedro
|
22.6
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22.2
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69.8
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102.8
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Total Gold
Production
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106.0
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106.5
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380.1
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397.7
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Total Gold Sales
(thousand ounces)
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104.2
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104.5
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371.2
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391.8
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Average Realized Gold
Price per ounce(3)
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$1,188
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$1,233
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$1,256
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$1,337
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COPPER PRODUCTION
(million pounds)
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New Afton
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20.4
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20.5
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84.5
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72.0
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Peak Mines
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4.1
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3.5
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17.0
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13.4
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Total Copper
Production
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24.5
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24.0
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101.5
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85.4
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Total Copper Sales
(million pounds)
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25.5
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23.8
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97.6
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82.6
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Average Realized
Copper Price per pound(3)
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$2.92
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$3.24
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$3.02
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$3.24
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SILVER PRODUCTION
(million ounces)
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New Afton
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0.1
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0.1
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0.2
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0.2
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Peak Mines
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0.0
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0.0
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0.1
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0.1
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Cerro San
Pedro
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0.3
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0.3
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1.1
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1.3
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Total Silver
Production
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0.4
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0.4
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1.4
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1.6
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Total Silver Sales
(million ounces)
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0.4
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0.4
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1.4
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1.6
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Average Realized
Silver Price per ounce(3)
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$15.73
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$20.10
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$18.86
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$23.16
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TOTAL CASH
COSTS(2)($ per ounce)
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New Afton
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($1,199)
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($1,428)
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($1,248)
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($1,196)
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Mesquite
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852
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841
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909
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907
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Peak Mines
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707
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778
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658
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850
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Cerro San
Pedro
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1,413
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911
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1,251
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676
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Total Cash
Costs(2)
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$414
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$316
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$312
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$377
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All-IN SUSTAINING
COSTS(1)($ per ounce)
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New Afton
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($560)
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$12
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($650)
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($133)
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Mesquite
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1,090
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988
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1,266
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1,108
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Peak Mines
|
1,231
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1,106
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1,025
|
1,331
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Cerro San
Pedro
|
1,447
|
1,076
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1,354
|
766
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All-in Sustaining
Costs(1)
|
$845
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$883
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$779
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$899
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Peak Mines
Fourth quarter production at the Peak Mines was slightly below
that of the prior-year quarter as a decrease in tonnes processed
and grade was only partially offset by increased recovery. The 13%
decrease in tonnes processed was primarily a result of a total of
seven days of unscheduled mill downtime during the quarter due to
the combination of a SAG mill motor failure as well as a belt tear
on the SAG mill feed conveyor later in the quarter. 2014 full-year
production of 99,030 ounces remained consistent with 2013, as
increased grade and recovery offset a decrease in tonnes processed.
Peak Mines' full-year gold production was in the middle of its
guidance range of 95,000 to 105,000 ounces.
Cerro San Pedro
Cerro San Pedro finished 2014 with its strongest production
quarter of the year. Production of 22,567 ounces increased by over
9,000 ounces relative to the third quarter of 2014 and remained
consistent with the prior-year quarter. Fourth quarter production
benefitted from a combination of an increase in ore tonnes placed
on the leach pad and higher grade. As scheduled, production in 2014
was below that of 2013 due to a combination of lower ore tonnes
placed on the leach pad, resulting from a focus on waste stripping,
and lower grade. 2014 was a transition year for the mine, as the
company embarked on a heavy waste stripping initiative through the
first eight months of the year to position Cerro San Pedro for its
final year of active mining in 2015. Cerro San Pedro's full-year
gold production was at the low end of its guidance range of 70,000
to 80,000 ounces.
"We are proud of the way our teams adapted to deliver gold
production within our guidance range, despite the challenges faced
at Mesquite with respect to the timing of ounces being loaded to
the pad and at the Peak Mines with the unexpected mill downtime
late in 2014," stated David
Schummer, Executive Vice President and Chief Operating
Officer. "Since joining New Gold in September, I have had the
opportunity to gain a solid understanding of our portfolio of
assets. I look forward to working with our team to unlock the
additional opportunities we have identified for further operational
improvement."
COPPER PRODUCTION
Consolidated copper production in the fourth quarter remained
consistent with the prior-year quarter, driven by continued solid
performances from both New Afton and the Peak Mines. On a
consolidated basis, 2014 full-year copper production of 101.5
million pounds increased by 19% relative to 2013 and exceeded the
company's guidance range of 92 to 100 million pounds. 2014
full-year copper production at New Afton of 84.5 million pounds
increased by 17% as a result of higher tonnes processed and
exceeded its guidance range of 78 to 84 million pounds. At the same
time, production at the Peak Mines of 17.0 million pounds increased
by 27% as higher copper grade and recovery more than offset lower
tonnes processed, which resulted in the mine exceeding its guidance
range of 14 to 16 million pounds.
SILVER PRODUCTION
Consolidated fourth quarter silver production remained
consistent with the prior-year quarter. Cerro San Pedro's 2014
full-year silver production of 1.1 million ounces met the low end
of its guidance range and was slightly below that of the prior year
due to a combination of lower ore tonnes placed and lower grade.
The small silver contributions from New Afton and the Peak Mines
were both in line with expectations resulting in consolidated
silver production of 1.45 million ounces meeting the guidance range
of 1.35 to 1.75 million ounces.
ALL-IN SUSTAINING COSTS(1) AND TOTAL CASH
COSTS(2)
New Gold continued to solidify its position as one of the lowest
cost producers in the industry during 2014. As a result of New
Gold's solid operating performance, 2014 full-year all-in
sustaining costs(1) decreased by $120 per ounce relative to 2013, including a
$65 per ounce decrease in total cash
costs(2). Importantly, these cost reductions were
realized despite the decrease in by-product copper and silver
prices relative to 2013. The company's 2014 all-in sustaining
costs(1) of $779 per ounce
were below the guidance range of $815 to
$835 per ounce. Total cash costs(2) of
$312 per ounce were a record low for
New Gold and were also below the guidance range of $320 to $340 per ounce.
New Afton
Fourth quarter all-in sustaining costs(1) at New
Afton decreased relative to the prior-year quarter as a planned
$18 million decrease in sustaining
capital expenditures more than offset the increase in total cash
costs(2). The increase in total cash costs(2)
relative to the fourth quarter of 2013 was primarily attributable
to the $5 million decrease in
by-product revenue due to the lower copper price. For the full
year, all-in sustaining costs(1) at New Afton of
($650) per ounce were below the
guidance range of ($620) to ($600)
per ounce while total cash costs(2) of ($1,248) per ounce were within the guidance range
of ($1,260) to ($1,240) per ounce as
increased copper sales volumes offset the impact of the realized
copper price being lower than the price assumed at the beginning of
2014. New Afton's 2014 full-year operating cost, including mining,
processing and general and administrative costs, averaged
$17.35 per tonne. New Afton's 2014
sustaining capital expenditures of $61
million were in line with guidance.
New Afton's fourth quarter co-product cash costs(2)
remained consistent with the prior-year quarter at $395 per ounce of gold and $1.00 per pound of copper. Further, as a result
of the decrease in quarterly sustaining capital expenditures, the
mine's fourth quarter co-product all-in sustaining
costs(1) decreased significantly to $603 per ounce of gold and $1.52 per pound of copper from $822 per ounce of gold and $2.27 per pound of copper in the prior-year
quarter.
2014 full-year co-product costs were below those of 2013, with
co-product cash costs(2) of $409 per ounce of gold and $0.99 per pound of copper coming in below the
guidance ranges of $440 to $460 per
ounce of gold and $1.10 to $1.20 per
pound. 2014 full-year co-product all-in sustaining
costs(1) were $610 per
ounce of gold and $1.48 per pound of
copper.
Mesquite
Driven by stronger gold production, Mesquite's fourth quarter
total cash costs(2) of $852 per ounce were the lowest of 2014 and
remained consistent with the prior-year quarter. All-in sustaining
costs(1) were down significantly from the second and
third quarters of 2014, however, increased relative to the fourth
quarter of 2013 due to a planned $3
million increase in sustaining capital expenditures. 2014
full-year total cash costs(2) of $909 per ounce were consistent with 2013 and
below the guidance range of $930 to
$950 per ounce as costs benefitted from a combination of
lower total tonnes moved and lower diesel prices. All-in sustaining
costs(1) for the full year were also below the guidance
range of $1,310 to $1,330 per ounce.
Full-year sustaining capital expenditures of $33 million were $7
million below guidance as a portion of the planned capital
for the leach pad expansion was rescheduled to 2015.
Peak Mines
Fourth quarter total cash costs(2) at the Peak Mines
decreased relative to the prior-year quarter driven by a
combination of the depreciation of the Australian dollar and
increased copper by-product revenue. Quarterly all-in sustaining
costs(1) increased when compared to the fourth quarter
of 2013 due to a planned $5 million
increase in sustaining capital expenditures.
For the full year, both all-in sustaining costs(1) of
$1,025 per ounce and total cash
costs(2) of $658 per ounce
were well below those of 2013 driven by a combination of increased
productivity, the depreciation of the Australian dollar, a
$7 million increase in copper
by-product revenue and a $13 million
decrease in sustaining capital and exploration expenditures. While
Peak Mines' 2014 total cash costs(2) were slightly above
the guidance range of $630 to $650
per ounce, all-in sustaining costs(1) were below the
range of $1,065 to $1,085 per ounce,
as 2014 sustaining capital expenditures of $36 million were below the $40 million guidance for 2014.
Cerro San Pedro
Total cash costs(2) in the fourth quarter were above
the prior-year quarter due to a combination of increased reagent
costs, lower silver by-product revenue and lower gold sales
volumes. Driven by the increase in total cash costs(2),
all-in sustaining costs(1) were also higher than the
fourth quarter of 2013 despite a $3
million decrease in sustaining capital expenditures. 2014
full-year costs increased relative to 2013 for reasons consistent
with those noted above regarding the fourth quarter. Cerro San
Pedro's 2014 total cash costs(2) were above the guidance
range of $1,030 to $1,050 per ounce
due to the combination of increased reagent costs and lower silver
by-product revenue. All-in sustaining costs(1) exceeded
the guidance range of $1,125 to
$1,145 per ounce driven by total cash costs(2),
which form a component of all-in sustaining costs(1),
being above the guidance. Cerro San Pedro's 2014 sustaining capital
expenditures of $7 million were in
line with guidance.
2015 GUIDANCE AND COST SENSITIVITIES
NEW GOLD 2015
GUIDANCE
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Gold
Production
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Copper
Production
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Silver
Production
|
Total Cash
Costs(2)
|
All-in Sustaining
Costs(1)
|
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(thousand
ounces)
|
(million
pounds)
|
(million
ounces)
|
($ per
ounce)
|
($ per
ounce)
|
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New Afton
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105 - 115
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85 - 95
|
--
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($1,070) -
($1,030)
|
($560) -
($520)
|
Mesquite
|
110 - 120
|
--
|
--
|
$925 -
$965
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$1,290 -
$1,330
|
Peak Mines
|
85 -
95
|
15 - 17
|
--
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$660 -
$700
|
$1,005 -
$1,045
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Cerro San
Pedro
|
90 -
100
|
--
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1.75 -
1.95
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$955 -
$995
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$1,005 -
$1,045
|
New Gold
Consolidated
|
390-430
|
100 -
112
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1.75 -
1.95
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$340 -
$380
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$745 -
$785
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CONSOLIDATED PRODUCTION AND COSTS
In 2015, New Gold is scheduled to deliver production increases
in all three of the metals that the company produces. Consolidated
gold production is expected to increase approximately 8% relative
to 2014, driven by targeted production increases at three of the
company's four operations. At the same time, copper production is
scheduled to increase by approximately 4% with the benefit of the
mill expansion at New Afton, and silver production should increase
by over 25% as Cerro San Pedro places more ore on the leach
pad.
The company's 2015 all-in sustaining cash costs(1)
are expected to remain among the lowest in the industry and stay
consistent with the low costs of $779
per ounce achieved in 2014. Total cash costs(2), which
form a component of all-in sustaining costs(1), are
expected to increase slightly when compared to $312 per ounce in 2014. This is driven by the
combination of the increased production weighting from the
company's higher cost mines and the lower by-product pricing
assumptions for 2015 of $2.75 per
pound of copper and $16.00 per ounce
of silver relative to the prices of $3.02 per pound of copper and $18.86 per ounce of silver realized in 2014. At
the same time, the 2015 assumptions for the Canadian dollar,
Australian dollar and Mexican peso exchange rates of $1.25, $1.25 and
$15.00 to the U.S. dollar, as well as
a $2.25 per gallon assumption for
Mesquite's diesel price, should benefit costs relative to the
actual 2014 rates.
New Gold's 2015 cumulative sustaining capital, exploration,
general and administrative, and amortization of reclamation
expenditures are scheduled to be approximately $65 per ounce below those of 2014.
Consistent with previous years, New Gold's 2015 full-year
production is not scheduled to be evenly distributed across the
four quarters. The first half of 2015 is expected to contribute
approximately 45% of the full-year production, with the balance of
the production scheduled for the second half of the year.
NEW GOLD 2015
ALL-IN SUSTAINING
COSTS(1)SENSITIVITIES
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Category
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Copper
Price
|
Silver
Price
|
AUD/USD
|
CDN/USD
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MXN/USD
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Diesel
|
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Base
Assumption
|
$2.75
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$16.00
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$1.25
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$1.25
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$15.00
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$2.25
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Sensitivity
|
+/-$0.25
|
+/-$1.00
|
+/-$0.05
|
+/-$0.05
|
+/-$1.00
|
+/-$0.25
|
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COST PER OUNCE
IMPACT
|
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New Afton
|
+/-$200
|
--
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--
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+/-$90
|
--
|
--
|
Mesquite
|
--
|
--
|
--
|
--
|
--
|
+/-$15
|
Peak Mines
|
+/-$40
|
--
|
+/-$90
|
--
|
--
|
--
|
Cerro San
Pedro
|
--
|
+/-$20
|
--
|
--
|
+/-$50
|
--
|
New Gold
Total
|
+/-$65
|
+/-$5
|
+/-$20
|
+/-$25
|
+/-$10
|
+/-$5
|
New Afton
Gold production at New Afton is expected to increase by
approximately 5% in 2015 and copper production is scheduled to
increase by approximately 6%. The targeted increase in production
of both metals is driven by the planned increase in throughput
resulting from the completion of the mill expansion project which
remains on schedule for commissioning in mid-2015. Gold and copper
grades as well as recoveries are expected to remain in line with
those realized in 2014.
New Afton's all-in sustaining costs(1) and total cash
costs(2), whether measured on a by-product or co-product
basis, are expected to remain among the lowest in the industry. The
increase in total cash costs(1) relative to ($1,248) per ounce in 2014 is attributable to the
combination of the lower copper price assumption and the increase
in processing costs per tonne upon completion of the mill
expansion. These cost impacts are expected to be partially offset
by the assumption of a lower Canadian dollar relative to the
average 2014 foreign exchange rate of C$1.10/US$. 2015 sustaining capital expenditures
are estimated to be $55 million, or
$500 per ounce, which includes
$35 million of underground
development and $8 million for a
tailings lift.
On a co-product basis, New Afton's targeted 2015 all-in
sustaining costs(1) of $575 to
$615 per ounce of gold and $1.30 to
$1.45 per pound of copper are expected to remain in line
with those achieved in 2014. Similarly, co-product total cash
costs(2) of $400 to $440
per ounce of gold and $0.90 to $1.05
per pound of copper also remain comparable to 2014.
The mill expansion project remains on schedule for a mid-2015
commissioning. After spending $20
million on the project in 2014, an additional $20 million of capital expenditures are estimated
for the first half of the year. In total, the expansion project is
expected to come in below the original $45
million cost estimate driven by the depreciation of the
Canadian dollar and the likelihood that the estimated contingency
may not be required.
Looking forward to 2016 and 2017, New Afton should maintain its
strong performance. Annual gold production is expected to average
approximately 90,000 ounces as a scheduled decrease in gold grade
is partially offset by higher mill throughput. At the same time,
copper production should remain at approximately 90 million pounds
per year.
Mesquite
Production at Mesquite in 2015 is scheduled to increase by
approximately 8% driven by an expected increase in gold grade. Ore
tonnes placed on the leach pad and recovery are expected to remain
in line with 2014 levels.
Mesquite's total cash costs(2) are expected to be
approximately $35 per ounce above the
$909 per ounce achieved in 2014 as
the mine is scheduled to move approximately 15% more total tonnes
than in the prior year. The cost impact of this increased mining
activity is expected to be partially offset by the diesel price
assumption of $2.25 per gallon
relative to an average price paid in 2014 of $3.12 per gallon, as well as increased
production. Sustaining capital expenditures are expected to be
$40 million in 2015 which includes
$25 million for the expansion of the
leach pad and $15 million for major
equipment components and repairs. As previously noted, $7 million of the 2015 capital has been carried
forward from 2014. Sustaining capital per ounce is expected to
remain consistent with 2014 and, as a result, the change in all-in
sustaining costs(1) relative to 2014 is primarily
attributable to the above-noted increase in total cash
costs(2).
In 2016 and 2017, Mesquite is expected to average production of
approximately 150,000 ounces per year at weighted average all-in
sustaining costs(1) of $800 per ounce. This improved performance is
scheduled to be driven by the combination of increases in ore
tonnes placed on the leach pad, grade moving to reserve grade and
sustaining capital expenditures decreasing to an average of
$12 million per year.
Peak Mines
Gold production at the Peak Mines is expected to be slightly
below that of 2014, as a scheduled increase in tonnes processed is
expected to be more than offset by gold grade moving toward reserve
grade. Copper production should remain in line with 2014 as the
planned increase in mill throughput and decrease in copper grade
should offset.
All-in sustaining costs(1) are scheduled to be in
line with the $1,025 per ounce
achieved in 2014, while total cash costs(2) are expected
to increase slightly relative to the prior year as the benefit of
the lower Australian dollar assumption only partially offsets the
combined unfavourable impact of the lower copper price assumption
and lower gold production. 2015 sustaining capital expenditures,
including exploration expense, are expected to be $30 million representing a 17% decrease from
2014.
In 2016, the company anticipates continued steady performance
from the Peak Mines. As the mine moves through 2016 into 2017, the
current mine plan estimates that an increasing percentage of ore
could be sourced from the copper-rich ore bodies, resulting in
increased copper production with an offsetting decrease in gold
production. Ultimately, the mine plan in future periods will be
re-optimized given the potential for the Peak Mines to continue its
history of successful underground resource delineation. Annual
sustaining capital costs are expected to average approximately
$25 million over the two-year
period.
Cerro San Pedro
Cerro San Pedro's final year of active mining is scheduled to
deliver an approximate 35% increase in gold production coupled with
an even greater increase in silver production. The increase in
production of both metals is driven by a combination of an expected
30% increase in ore tonnes placed on the leach pad and higher gold
and silver grades. For gold, these benefits are partially offset by
the planned processing of ore with lower expected recoveries.
All-in sustaining costs(1) of $1,005 to $1,045 per ounce, as well as total cash
costs(2), are expected to be well below those of 2014.
The decrease in total cash costs(2) is driven by the
combination of the higher silver by-product revenue and increased
gold production, while all-in sustaining cash costs(1)
are expected to further benefit from sustaining capital
expenditures decreasing to $2
million.
After 2015, Cerro San Pedro is scheduled to transition into
residual leaching. Gold production from residual leaching in 2016
is expected to be approximately 30% of the targeted 2015
production, with 2017 expected to be 30% of 2016 production. At the
same time, as silver leaches over a longer time period, 2016 silver
production is expected to be approximately 75% of the targeted 2015
production, with 2017 expected to be 60% of 2016 production. At
today's metal prices, the cash flow during the residual leach
period is expected to exceed Cerro San Pedro's mine closure
costs.
PROJECTS UPDATE
RAINY RIVER
At New Gold's Rainy River
project, located in northwestern Ontario, two key permitting milestones were
achieved on schedule in January 2015.
The Federal and Provincial governments approved the project's
Environmental Assessment which now enables the processing of
construction-related permits. Site clearing is expected to commence
in the coming weeks.
RAINY RIVER – KEY PROJECT
UPDATES
Permitting, Environment and Land Consolidation
- Canadian Environmental Assessment Agency approved Environmental
Assessment for the project on
January 12, 2015
- Ontario Ministry of Environment and Climate Change approved
Environmental Assessment on January 29,
2015
- Impacts and Benefits agreements completed with key First
Nations and Métis
- Completed acquisition of Bayfield Ventures Ltd. ("Bayfield") on
January 1, 2015 further consolidating
New Gold's holdings in the district and adding gold and silver
mineral resources to the project inventory
Project Timelines, Engineering, Capital Expenditures and
Project Economics
- Proactively decided to extend the project construction timeline
by six months in response to the current commodity price
environment
- Commissioning now targeted for mid-2017
- Detailed engineering 70% complete
- Current total development capital cost estimate of $877 million, including $69 million spent in 2014
- Reflects the combination of estimated capital adjustments from
the detailed engineering work completed over the last 12 months and
offsetting depreciation of the Canadian dollar relative to
the U.S. dollar
- Project economics – at $1,300 per
ounce gold, $16 per ounce silver and
a C$1.25/US$ exchange rate,
Rainy River has an after-tax 5%
NPV of $484 million, an IRR of 13.7%
and payback period of 5.2 years
- For every $100 per ounce change
in the gold price (at a constant foreign exchange rate and silver
price), the after-tax NPV and IRR change by approximately
$180 million and 3.0%
- For every $0.05 change in the
foreign exchange rate (at a constant gold and silver price), the
after-tax NPV and IRR change by approximately $100 million and 2.0%
Though the timing of receipt of Rainy
River's environmental approvals was consistent with the
company's project timeline, to maintain its financial flexibility,
New Gold has decided to extend the originally planned construction
timeline by six months. New Gold now plans to construct
Rainy River over a 30-month
period, instead of the 24-month period contemplated in the
January 2014 Feasibility Study,
resulting in commissioning being targeted in mid-2017.
In addition to permitting, one of the primary areas of focus in
2014 was the advancement of detailed engineering. As of the end of
January 2015 detailed engineering was
70% complete. Through the detailed engineering process, elements of
the project scope and related capital estimates were refined. The
key updates include the addition of temporary accommodations and
related services during the construction period in order to best
support project execution ($39
million), additional access roads and adjustments to the
tailings facility construction ($12
million), further strengthening construction management
support ($11 million) and the
addition of an escalation factor to account for any unexpected
increases to costs of materials or services during the development
period ($15 million). In aggregate,
the capital cost impact of these adjustments has been more than
offset by the impact of the continued depreciation of the Canadian
dollar relative to the U.S. dollar. At the company's assumed
exchange rate of C$1.25/US$,
Rainy River's development capital
cost estimate, inclusive of the $69
million spent in 2014, is $877
million. The estimated remaining development capital is
$808 million.
At the end of 2014, the company had made C$225 million of capital purchase commitments,
including C$71 million for the
initial mining fleet and related equipment and C$85 million for process plant equipment and
motors. In 2015, New Gold's planned capital expenditures at
Rainy River are $300 million which is approximately $120 million lower than the capital that was
estimated for 2015 under the 24-month Feasibility Study
construction schedule. Capital expenditures in 2015 are scheduled
to include: payments upon delivery of the above-noted equipment,
land clearing, including power line right of way, temporary
accommodations, road building, pouring of concrete foundation and
erecting steel for the mill building as well as the construction of
a waterline, pump station and initial tailings dam foundation.
Under the 30-month construction schedule, the company is
targeting first production from Rainy
River in mid-2017. Over its first nine years of full
production, the 21,000 tonne per day, combined open pit-underground
operation is scheduled to produce an average of 325,000 ounces of
gold per year. At the company's assumed exchange rate of
C$1.25/US$, all-in sustaining
costs(1) average $658 per
ounce over the first nine years of the project's life.
"We have made significant progress in the advancement of
Rainy River over the last year,"
stated Robert Gallagher, President
and Chief Executive Officer. "By working closely with our First
Nations and Métis partners as well as other local stakeholders, we
recently achieved a significant milestone with the Federal and
Provincial governments' approval of the project's Environmental
Assessment. With Rainy River now
almost fully engineered, we look forward to moving forward and
executing on a successful development as we did most recently with
New Afton."
Overall, the Rainy River project enhances New Gold's growth
pipeline through its manageable capital costs, significant
production scale at below current industry average costs and
exciting regional exploration potential in a great mining
jurisdiction. The company looks forward to advancing the Rainy
River project and providing further updates on its development
through the remainder of 2015 and beyond.
BLACKWATER
The company's Blackwater
project is located in south-central British Columbia. Once in production,
Blackwater is expected to produce
an average of 485,000 ounces of gold per year at below industry
average costs. Consistent with Rainy
River, the depreciation of the Canadian dollar relative to
the U.S. dollar benefits both Blackwater's development and operating costs
as well as the project's economics.
In the current commodity price environment, New Gold plans to
sequence the development of its projects with the near-term focus
being on the advancement of the lower capital cost Rainy River project. Thereafter, the timing of
Blackwater's development will be
driven by prevailing market conditions over the coming years.
Capital expenditures during 2014 were $13
million which primarily related to the continued advancement
of the environmental assessment process and related environmental
and engineering studies. 2014 spending was more than offset by the
receipt of a British Columbia
mining and exploration tax credit of C$22
million related to exploration work the company completed in
2012. Capital expenditures in 2015 are scheduled to be $8 million with New Gold's focus being to advance
the project through the permitting phase.
NEW AFTON C-ZONE
New Gold is pleased to report the results of the scoping study
the company completed to evaluate the potential for the New Afton
C-zone to extend the mine's life. The C-zone is the down plunge
extension of the B-zone block cave that is currently being mined at
New Afton.
NEW AFTON C-ZONE – SCOPING STUDY RESULTS
- Five years of additional mine life, including ramp-up
period
- 21.5 million tonnes at 0.76 grams per tonne gold and 0.80%
copper
- 522 thousand ounces of gold and 377 million pounds of copper
contained
- Gold and copper recovery of 86%
- Full-year average annual production of 107,000 ounces of gold
and 77 million pounds of copper
- Development capital costs of $349
million at an exchange rate assumption of C$1.25/US$, including $40
million of contingency
- Total sustaining capital costs of $110
million
- Total operating costs, including mining, processing and general
and administrative, of $19.24 per
tonne
- Cash costs expected to remain in line with current levels
- Project economics – at $1,300 per
ounce gold, $3.00 per pound copper
and a C$1.25/US$ exchange rate, the
C-zone project has an after-tax 5% NPV of $138 million, an IRR of 13.5% and payback period
of 3.0 years
- For every $100 per ounce change
in the gold price (at a constant copper price and foreign exchange
rate), the after-tax NPV and IRR changes by approximately
$10 million
- For every $0.25 per pound change
in the copper price (at a constant gold price and foreign exchange
rate), the after-tax NPV and IRR changes by approximately
$10 million
- For every $0.05 change in the
foreign exchange rate (at a constant gold and copper price), the
after-tax NPV and IRR changes by approximately $5 million
The scoping study relates to the economic potential of the
C-zone mineral resources at the New Afton property and is not part
of, and should be distinguished from, the current mining of the
B-zone reserves. Mineral resources that are not mineral reserves do
not have demonstrated economic viability. The reader is cautioned
that a scoping study is preliminary in nature and accordingly
subject to a high degree of uncertainty. A preliminary and/or
definitive feasibility study will be required to further evaluate
the C-zone project's economics.
The scoping study was prepared by New Gold with Roscoe Postle
Associates Inc. ("RPA") providing an independent third party
review. The independent Qualified Persons who reviewed and approved
the disclosure contained on the C-zone scoping study included in
this news release were David W.
Rennie, P.Eng., Principal Geologist, RPA; Holger
Krutzellmann, P.Eng. Associate Principal Metallurgist, RPA;
and R. Dennis Bergen, P.Eng.,
Associate Principal Mining Engineer, RPA.
Based on the results of the scoping study, New Gold is targeting
the completion of a feasibility study in the first quarter of 2016.
Subject to the completion of a positive feasibility study, a
development decision by the company and receipt of the requisite
permits, development of the C-zone could begin in 2017, with the
main access ramps being completed by the end of 2020. Thereafter,
development of the block cave production levels would begin. The
C-zone extraction level would be approximately 550 metres below the
current B-zone extraction level. Based on this development
schedule, production could begin in early 2023 with an 18-month
ramp up to full production in mid-2024. One of the opportunities
that the company will pursue as the access ramps are developed is
to further drill test the C-zone to expand and upgrade the resource
classification of the minable tonnage. The deposit remains open at
depth and to the west.
Operationally, the same development, production and materials
handling strategies would be used for the C-zone as are currently
being used to mine the New Afton B-zone reserve. The majority of
the mobile mining equipment would be taken from the current
operation, with estimated refurbishment and replacement
requirements factored into the capital cost estimate.
A first phase metallurgical program that was designed to assess
the amenability of the C-zone ore to be processed via the current
mill flowsheet was successful. The mill recoveries are expected to
be similar to those achieved since the start of commercial
production at New Afton in mid-2012.
After assessing various tailings storage options for the C-zone,
it was concluded that the optimal approach would likely involve the
expansion of the current New Afton tailings storage facility.
Beyond the tailings storage plan, one of the key focuses of the
scoping study was to begin to assess the impact that the surface
subsidence from the C-zone underground mine could have on surface
infrastructure. Detailed modelling was completed to estimate the
area of subsidence and it was determined that a portion of the
tailings dam from the historic Afton mine is located within the
predicted area of subsidence. To mitigate the potential risk
associated with the historic tailings, it is anticipated that the
tailings would be stabilized within the existing facility through a
dewatering and consolidation program. New Gold holds an option to
acquire the land on which the historic tailings are located. As the
company moves towards the completion of a feasibility study,
additional studies and testwork will be completed on the tailings
stabilization plan.
It is expected that the permits for the C-zone project will
involve amendments to current permits rather than applications for
new permits. The project plan should not result in significant
additional surface disturbance or environmental impact. In
addition, the project would not require additional annual water
consumption as the mill throughput is not scheduled to change. The
currently contemplated closure plan for New Afton would remain in
place for the C-zone project with an amendment made to incorporate
the historic tailings. The incremental costs associated with any
amendments to the closure plan have been included in the project
economics.
In 2015, the company has planned capital expenditures of
$5 million to further advance the
C-zone project toward a feasibility study. Work during the year
will include additional subsidence modeling, completion of a
tailings stabilization test program as well as other supporting
studies. New Gold looks forward to providing updates on the
continued progress of the C-zone project.
The key parameters and assumptions associated with the C-zone
scoping study do not impact the current New Afton mining operation
or the New Afton B-zone mineral reserves.
The scoping study discussed above is based on measured,
indicated and inferred resources and is preliminary in nature.
Accordingly, the scoping study is subject to a high degree of
uncertainty. The scoping study includes mineral resources that are
considered too speculative geologically to have economic
considerations applied to them that would enable them to be
categorized as mineral reserves and there is no certainty the
scoping study will be realized.
EL MORRO
New Gold's share of the El Morro project provides the company
with a 30% fully-carried interest in a world-class copper-gold
project in north-central Chile.
Under the terms of New Gold's agreement with Goldcorp Inc.
("Goldcorp"), Goldcorp is responsible for funding New Gold's full
30% share of capital costs. The carried funding accrues 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.
On November 7, 2014, Goldcorp
announced that it had withdrawn the Environmental Impact Study
("EIS") for the El Morro project. The decision was made after an
October 7, 2014 ruling by the Chilean
Supreme Court that invalidated the EIS. Since that time, the El
Morro project team has continued to progress its studies to
determine the optimal development plan for the El Morro
project.
El Morro remains one of the highest-grade undeveloped
copper-gold porphyry deposits in the world. At December 31, 2014, New Gold's 30% share of the
project contained proven and probable gold reserves of 2.7 million
ounces and proven and probable copper reserves of 2.0 billion
pounds. In addition, the broader El Morro land package totals 417
square kilometres with significant continued exploration
potential.
2014 YEAR-END MINERAL RESERVES AND RESOURCES AND 2015
EXPLORATION PLANS
MINERAL RESERVES
AND RESOURCES SUMMARY TABLE AS AT DECEMBER 31, 2014
|
|
|
|
|
|
|
|
|
|
As at December 31,
2014
|
|
As at December 31,
2013
|
|
Gold
Koz
|
Silver
Moz
|
Copper
Mlbs
|
|
Gold
Koz
|
Silver
Moz
|
Copper
Mlbs
|
|
|
|
|
|
|
|
|
Proven and
Probable reserves
|
17,646
|
82
|
2,821
|
|
18,538
|
90
|
2,953
|
New Afton
|
760
|
3
|
781
|
|
879
|
4
|
904
|
Mesquite
|
1,679
|
-
|
-
|
|
2,237
|
-
|
-
|
Peak Mines
|
375
|
1
|
89
|
|
412
|
1
|
98
|
Cerro San
Pedro
|
215
|
8
|
-
|
|
392
|
16
|
-
|
Rainy
River
|
3,772
|
9
|
-
|
|
3,773
|
9
|
-
|
Blackwater
|
8,170
|
61
|
-
|
|
8,170
|
61
|
-
|
El Morro
(30%)
|
2,675
|
-
|
1,951
|
|
2,675
|
-
|
1,951
|
|
|
|
|
|
|
|
|
Measured and
Indicated resources (exclusive of reserves)
|
7,807
|
36
|
1,728
|
|
9,134
|
35
|
1,552
|
|
|
|
|
|
|
|
|
Inferred
resources
|
3,597
|
21
|
1,746
|
|
4,161
|
30
|
1,820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Measured and
indicated resources shown exclusive 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.
|
|
2014 YEAR-END MINERAL RESERVES AND RESOURCES
As part of New Gold's estimate of 2014 year-end mineral reserves
and resources, the company lowered the prices used to estimate
mineral reserves by $100 per ounce to
$1,200 per ounce of gold for all of
its assets with the exception of El Morro, and by $4 per ounce to $18
per ounce of silver. The reserve pricing assumption for copper was
held at $3.00 per pound.
New Gold has also revised its approach to the reporting of
Measured and Indicated resources. Measured and Indicated resources
are now reported exclusive of mineral reserves and New Gold intends
to present mineral resources on that basis going forward. For
general comparison purposes only, the 2013 year-end Measured and
Indicated resources, which are exclusive of reserves, were
calculated by subtracting the contained metal for 2013 year-end
mineral reserves from the 2013 year-end measured and indicated
resources, inclusive of reserves.
On a consolidated basis, the 0.9 million ounce, or 5%, decrease
in gold mineral reserves to 17.6 million ounces is primarily
attributable to depletion of over 0.5 million ounces resulting from
2014 mining activity at the company's four operating mines. The
balance of 0.4 million ounces is a result of the combination of the
lower reserve price assumptions and resulting changes to mineral
resource block model estimates and updated mine plans. The majority
of the change in copper mineral reserves was also driven by
depletion. The change in consolidated Measured and Indicated gold
resources, exclusive of reserves, was primarily attributable to a
reduction of Mesquite's mineral resource inventory which mostly
consisted of transitional and sulphide material.
The 2014 year-end Proven and Probable mineral reserves for New
Gold's three projects remained unchanged at 14.6 million ounces of
gold, 2.0 billion pounds of copper and 70.2 million ounces of
silver. In addition, early in 2015, the company completed the
acquisition of Bayfield which will
add to the company's gold and silver mineral resource inventory at
Rainy River.
At New Afton, beyond 2014 mine depletion, approximately two
million tonnes of marginal low grade material were removed from the
reserve as a result of mine plan optimization. New Afton's Measured
and Indicated mineral resources increased during 2014, driven by a
more than 50% increase in the C-zone resource contained gold and
copper.
The 0.6 million ounce change in Mesquite's 2014 year-end mineral
reserves was driven by 0.2 million ounces of mine depletion with
the balance due to the combination of lower reserve pricing, the
results of infill drilling to improve resource confidence and
reduced slope angles for certain pit walls. At Cerro San Pedro, the
majority of the 0.2 million ounce decline in reserves was due to
mine depletion with the remaining amount driven by the removal of
approximately four million tonnes of low grade material from the
mine plan.
At the Peak Mines, the company was once again successful in
replacing a significant portion of the material that was mined in
2014. Production at the Peak Mines in 2014 was 99,030 ounces of
gold and 17.0 million pounds of copper and through its exploration
efforts the company's 2014 year-end gold and copper mineral
reserves decreased by less than 10% relative to the end of
2013.
2015 EXPLORATION PLANS
New Gold's 2015 exploration program will primarily be focused on
three assets, Rainy River, the
Peak Mines and Blackwater, with
scheduled exploration spending totaling up to $17 million, of which $11
million is expected to be expensed.
At Rainy River, one of the
successes of the company's 2014 exploration efforts was the
identification of a new prospective volcanic massive sulphide
("VMS") horizon to the south of the ODM and Intrepid zones. In
2015, New Gold plans to continue exploring this prospective horizon
as well as other discrete high-grade VMS-style targets within the
greater Rainy River property
position.
Consistent with prior years, the objective at the Peak Mines in
2015 is to further the mine's history of mineral reserve and
resource replacement. A total of 53,000 metres of underground
exploration is planned with an additional 7,000 metres of surface
exploration drilling scheduled. The surface exploration will test
targets both along the mine corridor as well as priority regional
prospects.
At Blackwater, the primary
focus will be on following up on the porphyry and epithermal-style
mineralization that was identified in the area immediately to the
south of the main Blackwater
deposit in 2014. Additional surface mapping and geophysical
targeting work is planned to further test this area. Depending on
the results of this targeting, it may be followed by a 3,000 to
5,000 metre reconnaissance drill program.
WEBCAST AND CONFERENCE CALL
A webcast and conference call to discuss the 2014 fourth quarter
and full year operational results as well as 2015 guidance will be
held on Thursday, February 5, 2015
beginning at 10:00 a.m. Eastern time.
Participants may listen to the webcast by registering here or from
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. A
recorded playback of the call will be available until March 5, 2015 by calling toll-free
1-855-859-2056, or 1-416-849-0833 outside of Canada and the U.S., passcode 61179174. An
archived webcast will also be available until February 5, 2016 at www.newgold.com following the
event.
DETAILED RESERVE AND RESOURCE TABLES
Mineral Reserves
estimate as at December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metal
grade
|
Contained
metal
|
|
Tonnes
000s
|
Gold
g/t
|
Silver
g/t
|
Copper
%
|
Gold
Koz
|
Silver
Koz
|
Copper
Mlbs
|
|
|
|
|
|
|
|
|
NEW
AFTON
|
|
|
|
|
|
|
|
Proven
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Probable
|
42,026
|
0.56
|
2.3
|
0.84
|
760
|
3,119
|
781
|
Total New Afton
P&P
|
42,026
|
0.56
|
2.3
|
0.84
|
760
|
3,119
|
781
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MESQUITE
|
|
|
|
|
|
|
|
Proven
|
16,330
|
0.48
|
-
|
-
|
250
|
-
|
-
|
Probable
|
77,392
|
0.57
|
-
|
-
|
1,429
|
-
|
-
|
Total Mesquite
P&P
|
93,722
|
0.56
|
-
|
-
|
1,679
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PEAK
MINES
|
|
|
|
|
|
|
|
Proven
|
1,520
|
4.35
|
7.2
|
1.21
|
213
|
351
|
41
|
Probable
|
1,800
|
2.79
|
6.5
|
1.23
|
162
|
377
|
49
|
Total Peak Mines
P&P
|
3,330
|
3.51
|
6.8
|
1.22
|
375
|
728
|
89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CERRO SAN
PEDRO
|
|
|
|
|
|
|
|
Proven
|
4,616
|
0.55
|
18.8
|
-
|
82
|
2,798
|
-
|
Probable
|
7,514
|
0.55
|
21.2
|
-
|
133
|
5,126
|
-
|
Total CSP
P&P
|
12,130
|
0.55
|
20.3
|
-
|
215
|
7,924
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RAINY
RIVER
|
|
|
|
|
|
|
|
Direct
processing material
|
|
|
|
|
|
|
|
Open
Pit
|
|
|
|
|
|
|
|
Proven
|
15,839
|
1.47
|
2.0
|
-
|
746
|
1,038
|
-
|
Probable
|
46,866
|
1.26
|
3.1
|
-
|
1,896
|
4,594
|
-
|
Open Pit P&P
(direct processing)
|
62,705
|
1.31
|
2.8
|
-
|
2,642
|
5,632
|
-
|
Underground
|
|
|
|
|
|
|
|
Proven
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Probable
|
4,187
|
4.96
|
10.3
|
-
|
668
|
1,388
|
-
|
Underground P&P
(direct processing)
|
4,187
|
4.96
|
10.3
|
-
|
668
|
1,388
|
-
|
Stockpile
material
|
|
|
|
|
|
|
|
Open
Pit
|
|
|
|
|
|
|
|
Proven
|
6,843
|
0.38
|
1.5
|
-
|
84
|
332
|
-
|
Probable
|
30,541
|
0.39
|
2.1
|
-
|
378
|
2,058
|
-
|
Open Pit P&P
(stockpile)
|
37,384
|
0.39
|
2.0
|
-
|
462
|
2,390
|
-
|
Total
P&P
|
|
|
|
|
|
|
|
Proven
|
22,682
|
1.14
|
1.9
|
-
|
830
|
1,370
|
-
|
Probable
|
81,594
|
1.12
|
3.1
|
-
|
2,942
|
8,040
|
-
|
Total Rainy River
P&P
|
104,276
|
1.13
|
2.8
|
-
|
3,772
|
9,410
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BLACKWATER
|
|
|
|
|
|
|
|
Direct
processing material
|
|
|
|
|
|
|
|
Proven
|
124,500
|
0.95
|
5.5
|
-
|
3,790
|
22,100
|
-
|
Probable
|
169,700
|
0.68
|
4.1
|
-
|
3,730
|
22,300
|
-
|
P&P (direct
processing)
|
294,200
|
0.79
|
4.7
|
-
|
7,520
|
44,400
|
-
|
Stockpile
material
|
|
|
|
|
|
|
|
Proven
|
20,100
|
0.50
|
3.6
|
-
|
325
|
2,300
|
-
|
Probable
|
30,100
|
0.34
|
14.6
|
-
|
325
|
14,100
|
-
|
P&P
(stockpile)
|
50,200
|
0.40
|
10.2
|
-
|
650
|
16,400
|
-
|
Total Blackwater
P&P
|
344,400
|
0.74
|
5.5
|
-
|
8,170
|
60,800
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EL
MORRO
|
100%
Basis
|
30%
Basis
|
Proven
|
321,814
|
0.56
|
-
|
0.55
|
1,746
|
-
|
1,163
|
Probable
|
277,240
|
0.35
|
-
|
0.43
|
929
|
-
|
788
|
Total El Morro
P&P
|
599,054
|
0.46
|
-
|
0.49
|
2,675
|
-
|
1,951
|
|
|
|
|
|
|
|
|
Total
P&P
|
|
|
|
|
17,646
|
81,981
|
2,821
|
Measured and
Indicated Mineral Resource estimate (exclusive of Reserves) as at
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
Metal
grade
|
Contained
metal
|
|
Tonnes
000s
|
Gold
g/t
|
Silver
g/t
|
Copper
%
|
Gold
Koz
|
Silver
Koz
|
Copper
Mlbs
|
|
|
|
|
|
|
|
|
NEW
AFTON
|
|
|
|
|
|
|
|
A&B
zones
|
|
|
|
|
|
|
|
Measured
|
15,878
|
0.76
|
2.3
|
0.95
|
390
|
1,183
|
334
|
Indicated
|
9,031
|
0.50
|
2.4
|
0.75
|
146
|
705
|
149
|
A&B Zone
M&I
|
24,909
|
0.67
|
2.3
|
0.88
|
535
|
1,878
|
483
|
C-zone
|
|
|
|
|
|
|
|
Measured
|
10,187
|
1.11
|
2.5
|
1.18
|
364
|
819
|
266
|
Indicated
|
27,766
|
0.76
|
2.1
|
0.90
|
682
|
1,848
|
548
|
C-zone
M&I
|
37,953
|
0.86
|
2.2
|
0.97
|
1,046
|
2,672
|
814
|
HW
Lens
|
|
|
|
|
|
|
|
Measured
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Indicated
|
10,180
|
0.52
|
2.1
|
0.45
|
170
|
691
|
100
|
HW Lens
M&I
|
10,180
|
0.52
|
2.1
|
0.45
|
170
|
691
|
100
|
Total New Afton
M&I
|
73,042
|
0.75
|
2.2
|
0.87
|
1,751
|
5,235
|
1,397
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MESQUITE
|
|
|
|
|
|
|
|
Measured
|
6,571
|
0.45
|
-
|
-
|
94
|
-
|
-
|
Indicated
|
80,613
|
0.44
|
-
|
-
|
1,153
|
-
|
-
|
Total Mesquite
M&I
|
87,184
|
0.44
|
-
|
-
|
1,242
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PEAK
MINES
|
|
|
|
|
|
|
|
Measured
|
1,700
|
3.77
|
5.5
|
0.77
|
210
|
300
|
29
|
Indicated
|
2,100
|
2.97
|
7.2
|
1.00
|
200
|
480
|
46
|
Total Peak Mines
M&I
|
3,800
|
3.33
|
6.4
|
0.90
|
410
|
780
|
75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CERRO SAN
PEDRO
|
|
|
|
|
|
|
|
Measured
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Indicated
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Total CSP
M&I
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RAINY
RIVER
|
|
|
|
|
|
|
|
Direct
processing material
|
|
|
|
|
|
|
|
Open
Pit
|
|
|
|
|
|
|
|
Measured
|
3,288
|
1.39
|
1.8
|
-
|
146
|
189
|
-
|
Indicated
|
32,742
|
1.37
|
2.7
|
-
|
1,441
|
2,832
|
-
|
Open Pit M&I
(direct processing)
|
36,030
|
1.37
|
2.6
|
-
|
1,587
|
3,021
|
-
|
Underground
|
|
|
|
|
|
|
|
Measured
|
79
|
4.96
|
2.8
|
-
|
13
|
7
|
-
|
Indicated
|
4,750
|
4.12
|
8.5
|
-
|
629
|
1,302
|
-
|
Underground M&I
(direct processing)
|
4,829
|
4.13
|
8.4
|
-
|
642
|
1,309
|
-
|
Stockpile
material
|
|
|
|
|
|
|
|
Open
Pit
|
|
|
|
|
|
|
|
Measured
|
1,158
|
0.37
|
1.1
|
-
|
14
|
42
|
-
|
Indicated
|
29,630
|
0.45
|
2.2
|
-
|
431
|
2,056
|
-
|
Open Pit M&I
(stockpile)
|
30,788
|
0.45
|
2.1
|
-
|
445
|
2,098
|
-
|
Total
M&I
|
|
|
|
|
|
|
|
Measured
|
4,525
|
1.19
|
1.6
|
-
|
173
|
238
|
-
|
Indicated
|
67,122
|
1.16
|
2.9
|
-
|
2,501
|
6,190
|
-
|
Total Rainy River
M&I
|
71,647
|
1.16
|
2.8
|
-
|
2,674
|
6,428
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BLACKWATER
|
|
|
|
|
|
|
|
Direct
processing material
|
|
|
|
|
|
|
|
Measured
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Indicated
|
11,102
|
2.23
|
35.5
|
-
|
797
|
12,670
|
-
|
M&I (direct
processing)
|
11,102
|
2.23
|
35.5
|
-
|
797
|
12,670
|
-
|
Stockpile
material
|
|
|
|
|
|
|
|
Measured
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Indicated
|
32,615
|
0.26
|
-
|
-
|
273
|
-
|
-
|
M&I
(stockpile)
|
32,615
|
0.26
|
-
|
-
|
273
|
-
|
-
|
Total Blackwater
M&I
|
43,717
|
0.76
|
5.2
|
-
|
1,071
|
12,670
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPOOSE
|
|
|
|
|
|
|
|
Indicated
|
16,071
|
0.57
|
21.7
|
-
|
293
|
11,233
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EL
MORRO
|
100%
Basis
|
30%
Basis
|
Measured
|
19,790
|
0.53
|
-
|
0.51
|
102
|
-
|
67
|
Indicated
|
72,563
|
0.38
|
-
|
0.39
|
265
|
-
|
189
|
Total El Morro
M&I
|
92,353
|
0.41
|
-
|
0.42
|
366
|
-
|
256
|
|
|
|
|
|
|
|
|
Total
M&I
|
|
|
|
|
7,807
|
36,346
|
1,728
|
Inferred Resource
estimate as at December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metal
grade
|
Contained
metal
|
|
Tonnes
000s
|
Gold
g/t
|
Silver
g/t
|
Copper
%
|
Gold
Koz
|
Silver
Koz
|
Copper
Mlbs
|
|
|
|
|
|
|
|
|
NEW
AFTON
|
|
|
|
|
|
|
|
A&B-zones
|
6,154
|
0.35
|
1.4
|
0.37
|
69
|
269
|
50
|
C-zone
|
6,965
|
0.47
|
1.5
|
0.53
|
105
|
329
|
82
|
HW Lens
|
966
|
0.69
|
1.5
|
0.46
|
21
|
45
|
10
|
Total New Afton
Inferred
|
14,085
|
0.43
|
1.4
|
0.46
|
195
|
643
|
142
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MESQUITE
|
6,619
|
0.33
|
-
|
-
|
70
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PEAK
MINES
|
1,600
|
1.77
|
6.2
|
1.33
|
92
|
320
|
47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CERRO SAN
PEDRO
|
199
|
0.56
|
19.1
|
-
|
4
|
122
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RAINY
RIVER
|
|
|
|
|
|
|
|
Direct
processing
|
|
|
|
|
|
|
|
Open Pit
|
8,096
|
0.90
|
1.8
|
-
|
233
|
464
|
-
|
Underground
|
2,738
|
4.33
|
8.6
|
-
|
381
|
757
|
-
|
Total Direct
Processing
|
10,834
|
1.77
|
3.5
|
-
|
614
|
1,221
|
-
|
Stockpile
|
|
|
|
|
|
|
|
Open Pit
|
7,726
|
0.37
|
1.1
|
-
|
91
|
270
|
-
|
Total Rainy River
Inferred
|
18,560
|
1.18
|
2.5
|
-
|
705
|
1,491
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BLACKWATER
|
|
|
|
|
|
|
|
Direct
processing
|
10,485
|
0.79
|
3.6
|
-
|
265
|
1,201
|
-
|
Stockpile
|
2,939
|
0.31
|
3.6
|
-
|
29
|
341
|
-
|
Total Blackwater
Inferred
|
13,424
|
0.68
|
3.6
|
-
|
294
|
1,542
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPOOSE
|
19,776
|
0.48
|
26.2
|
-
|
302
|
16,670
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
El
MORRO
|
100%
Basis
|
30%
Basis
|
El Morro - Open
Pit
|
564,217
|
0.16
|
-
|
0.26
|
871
|
-
|
970
|
El Morro -
Underground
|
113,840
|
0.97
|
-
|
0.78
|
1,065
|
-
|
587
|
|
|
|
|
|
|
|
|
Total
Inferred
|
|
|
|
|
3,597
|
20,788
|
1,746
|
NOTES TO MINERAL RESERVE AND RESOURCE ESTIMATES
1.
|
New Gold's mineral
reserves have been estimated in accordance with the Canadian
Institute of Mining, Metallurgy and Petroleum ("CIM") Definition
Standards for Mineral Resources and Mineral Reserves adopted by CIM
Council on May 10, 2014 and incorporated by reference in National
Instrument 43-101 ("NI 43-101").
|
|
|
2.
|
For year-end 2014
mineral reserves for the company's mineral properties have been
estimated based on the following metal prices and lower cut-off
criteria:
|
|
|
|
|
|
Mineral
Property
|
Gold
($/oz)
|
Silver
($/oz)
|
Copper
($/lb)
|
Lower
Cut-off
|
New Afton
|
$1,200
|
$18.00
|
$3.00
|
$21.00/t Main zone,
$24/t B3
|
Mesquite
|
$1,200
|
-
|
-
|
0.21 g/t Au – Oxide
and transition reserves
|
|
0.41 g/t Au –
Non-oxide reserves
|
Peak Mines
|
$1,200
|
$18.00
|
$3.00
|
A$88 – 133/t
NSR
|
Cerro San
Pedro
|
$1,200
|
$18.00
|
-
|
$4.00/t
|
Rainy
River
|
$1,200
|
$18.00
|
|
Open Pit direct
processing: 0.3 – 0.7 g/t AuEq
|
|
-
|
Open Pit stockpile:
0.30 g/t AuEq
|
|
|
Underground: 3.5 g/t
AuEq
|
Blackwater
|
$1,200
|
$18.00
|
-
|
Direct processing:
0.26 – 0.38 g/t AuEq
|
|
Stockpile: 0.32 g/t
AuEq
|
El Morro
|
$1,300
|
-
|
$3.00
|
0.20% CuEq
|
3.
|
New Gold reports its
Measured and Indicated mineral resources exclusive of mineral
reserves. Measured and Indicated mineral resources that are not
mineral reserves do not have demonstrated economic viability.
Inferred mineral resources have a greater amount of uncertainty as
to their existence, economic and legal feasibility, do not have
demonstrated economic viability, and are likewise exclusive of
mineral reserves.
|
|
|
4.
|
For year-end 2014
mineral resources for the company's mineral properties have been
estimated based on the following metal prices and lower cut-off
criteria:
|
|
|
|
|
|
Mineral
Property
|
Gold
($/oz)
|
Silver
($/oz)
|
Copper
($/lb)
|
Lower
Cut-off
|
New Afton
|
$1,300
|
$20.00
|
$3.25
|
0.40% CuEq
|
Mesquite
|
$1,300
|
-
|
-
|
0.12 g/t Au – Oxide
and transition resources
|
0.24 g/t Au –
Non-oxide resources
|
Peak Mines
|
$1,300
|
$20.00
|
$3.25
|
A$93 - 133/t
NSR
|
Cerro San
Pedro
|
$1,300
|
$20.00
|
-
|
0.10 g/t AuEq – Open
pit oxide resources
|
0.30 g/t AuEq – Open
pit sulphide resources
|
Rainy
River
|
$1,300
|
$20.00
|
-
|
Open Pit direct
processing: 0.3 – 0.45 g/t AuEq
|
Open Pit stockpile:
0.30 g/t AuEq
|
Underground: 2.5 g/t
AuEq
|
Blackwater
|
$1,300
|
$20.00
|
-
|
Direct processing:
0.40 g/t AuEq
|
Stockpile: 0.30 –
0.40 g/t AuEq
|
Capoose
|
$1,300
|
$20.00
|
-
|
0.40 g/t
AuEq
|
El Morro
|
$1,500
|
-
|
$3.50
|
0.20% CuEq
|
5.
|
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.
Mineral reserves and mineral resources may be materially affected
by environmental, permitting, legal, title, taxation,
sociopolitical, marketing and other risks and relevant issues.
Additional details regarding mineral reserve and mineral resource
estimation, classification, reporting parameters, key assumptions
and associated risks for each of New Gold's material properties are
provided in the respective NI 43-101 Technical Reports which are
available at www.sedar.com.
|
|
|
6.
|
Qualified Person: The
preparation of New Gold's mineral reserve and mineral resource
estimates has been done by Qualified Persons as defined under NI
43-101, under the oversight and review of Mr. Mark A. Petersen, a
Qualified Person under NI 43-101.
|
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 Mesquite Mine in the United States, the Peak Mines in
Australia and the Cerro San Pedro
Mine in Mexico, provide the
company with its current production base. In addition, New Gold
owns 100% of the Rainy River and Blackwater projects, both in Canada, as well as 30% of the El Morro project
located in Chile. New Gold's
objective is to be the leading intermediate gold producer, focused
on the environment and social responsibility. For further
information on the company, please visit www.newgold.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain information contained in this news release, including
any information relating to New Gold's future financial or
operating performance are "forward looking". All statements in this
news release, other than statements of historical fact, which
address events, results, outcomes or developments that New Gold
expects to occur are "forward-looking statements". Forward-looking
statements are statements that are not historical facts and are
generally, but not always, identified by the use of forward-looking
terminology such as "plans", "expects", "is expected", "budget",
"scheduled", "targeted", "estimates", "forecasts", "intends",
"anticipates", "projects", "potential", "believes" or variations of
such words and phrases or statements that certain actions, events
or results "may", "could", "would", "should", "might" or "will be
taken", "occur" or "be achieved" or the negative connotation of
such terms. Forward-looking statements in this news release
include, among others, statements with respect to: guidance for
production, total cash costs and all-in sustaining costs, and the
factors contributing to those expected results, as well as expected
capital expenditures; expected reductions in the carrying value of
New Gold's assets; mine life; mineral reserve and resource
estimates; grades expected to be mined at the company's operations;
the expected production, costs, economics and operating parameters
of the Rainy River project; planned activities for 2015 and beyond
at the company's operations and projects, as well as planned
exploration activities and expenses; the results of the C-zone
study, including operating parameters and expected mine life,
production, costs and project economics; plans to advance the
C-zone project, including permitting requirements, impact on the
historic tailings facility from the historic Afton mine, capital
expenditures and potential timelines; expected production for the
Blackwater project; targeted
timing for commissioning and full production (and other activities)
related to the New Afton mill expansion and Rainy River and the sequencing of Blackwater; and cash flow expected from Cerro
San Pedro to the end of the residual leach period relative to
expected closure costs.
All forward-looking statements in this news release are based on
the opinions and estimates of management as of the date such
statements are made and are subject to important risk factors and
uncertainties, many of which are beyond New Gold's ability to
control or predict. Certain material assumptions regarding such
forward-looking statements are discussed in this news release, New
Gold's annual and quarterly management's discussion and analysis
("MD&A"), its Annual Information Form and its Technical Reports
filed at www.sedar.com. In addition to, and subject to, such
assumptions discussed in more detail elsewhere, the forward-looking
statements in this news release are also subject to the following
assumptions: (1) there being no significant disruptions affecting
New Gold's operations; (2) political and legal developments in
jurisdictions where New Gold operates, or may in the future
operate, being consistent with New Gold's current expectations; (3)
the accuracy of New Gold's current mineral reserve and resource
estimates; (4) the exchange rate between the Canadian dollar,
Australian dollar, Mexican peso and U.S. dollar being approximately
consistent with current levels; (5) prices for diesel, natural gas,
fuel oil, electricity and other key supplies being approximately
consistent with current levels; (6) equipment, labour and materials
costs increasing on a basis consistent with New Gold's current
expectations; (7) arrangements with First Nations and other
Aboriginal groups in respect of Rainy
River and Blackwater being
consistent with New Gold's current expectations; (8) all required
permits, licenses and authorizations being obtained from the
relevant governments and other relevant stakeholders within the
expected timelines; (9) the results of the feasibility studies for
the Rainy River and Blackwater
projects being realized; and (10) in the case of production, cost
and expenditure outlooks at operating mines for 2016 and 2017,
additionally, commodity prices and exchange rates being consistent
with those estimated for purposes of 2015 guidance.
Forward-looking statements are necessarily based on estimates
and assumptions that are inherently subject to known and unknown
risks, uncertainties and other factors that may cause actual
results, level of activity, performance or achievements to be
materially different from those expressed or implied by such
forward-looking statements. Such factors include, without
limitation: significant capital requirements and the availability
and management of capital resources; additional funding
requirements; price volatility in the spot and forward markets for
metals and other commodities; fluctuations in the international
currency markets and in the rates of exchange of the currencies of
Canada, the United States, Australia, Mexico and Chile; 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 in which New
Gold operates, including, but not limited to: in Canada, obtaining the necessary permits for
the Rainy River and Blackwater
projects; in Mexico, where Cerro
San Pedro has a history of ongoing legal challenges related to our
environmental authorization (EIS); and in Chile, where certain activities at El Morro
have been delayed due to litigation relating to its environmental
permit; the lack of certainty with respect to foreign legal
systems, which may not be immune from the influence of political
pressure, corruption or other factors that are inconsistent with
the rule of law; the uncertainties inherent to current and future
legal challenges New Gold is or may become a party to; diminishing
quantities or grades of reserves and resources; competition; loss
of key employees; rising costs of labour, supplies, fuel and
equipment; actual results of current exploration or reclamation
activities; uncertainties inherent to mining economic studies
including the feasibility studies for Rainy River and Blackwater and the C-zone study; the
uncertainty with respect to prevailing market conditions necessary
for a positive development decision at Blackwater; changes in project parameters as
plans continue to be refined; accidents; labour disputes; defective
title to mineral claims or property or contests over claims to
mineral properties; unexpected delays and costs inherent to
consulting and accommodating rights of First Nations and other
Aboriginal groups; uncertainties with respect to obtaining all
necessary surface and other land use rights or tenure for
Rainy River; risks, uncertainties
and unanticipated delays associated with obtaining and maintaining
necessary licenses, permits and authorizations and complying with
permitting requirements, including those associated with the
environmental assessment process for Blackwater. 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
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
MINERAL RESERVES AND 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 the Canadian Institute of Mining, Metallurgy
and Petroleum ("CIM") Definition Standards for Mineral Resources
and Mineral Reserves adopted by CIM Council on May 10, 2014 and incorporated by reference in
National Instrument 43-101 ("NI 43-101"). 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. 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. Under Canadian rules, estimates of inferred
mineral resources may not form the basis of feasibility of
pre-feasibility studies. It cannot be assumed that all or any
part of an "Inferred Mineral Resource" will ever be upgraded to a
higher confidence category. Readers are cautioned not
to assume that all or any part of an "Inferred Mineral Resource"
exists or is economically or legally mineable.
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 estimation is made. Readers are cautioned not to
assume that all or any part of the measured or indicated mineral
resources will ever be converted into mineral reserves. 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 A.
Petersen, Vice President, Exploration of New Gold. Mr.
Petersen is an AIPG Certified Professional Geologist and a
"Qualified Person" under National Instrument 43-101.
NON-GAAP MEASURES
(1) ALL-IN SUSTAINING COSTS
Consistent with guidance announced in 2013 by 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" per ounce as the sum of total cash costs,
capital expenditures that are sustaining in nature, corporate
general and administrative costs, capitalized and expensed
exploration that is sustaining in nature and environmental
reclamation costs, all divided by the ounces of gold sold to arrive
at a per ounce figure. New Gold believes this non-GAAP financial
measure provides further transparency into costs associated with
producing gold and will assist analysts, investors and other
stakeholders of the company in assessing the company's operating
performance, its ability to generate free cash flow from current
operations and its overall value. This data is furnished to provide
additional information and is a non-GAAP financial measure. All-in
sustaining costs presented do not have a standardized meaning under
IFRS and may not be comparable to similar measures presented by
other mining companies. It should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with IFRS and is not necessarily indicative of cash flow from
operations under IFRS or operating costs presented under IFRS.
Further details regarding historical all-in sustaining costs and a
reconciliation to the nearest IFRS measures are provided in the
MD&A accompanying New Gold's financial statements filed from
time to time on www.sedar.com.
(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, a worldwide association of suppliers of gold and gold
products that ceased operations in 2002. Adoption of the standard
is voluntary and the cost measures presented may not be comparable
to other similarly titled measures of other companies. New Gold
reports total cash costs on a sales basis. The company believes
that certain investors use this information to evaluate the
company's performance and ability to generate liquidity through
operating cash flow to fund future capital expenditures and working
capital needs. This measure, along with sales, is considered
to be a key indicator of the company's ability to generate
operating earnings and cash flow from its mining operations. Total
cash costs include mine site operating costs such as mining,
processing and administration costs, royalties, production taxes,
and realized gains and losses on fuel contracts, but are exclusive
of amortization, reclamation, capital and exploration costs and net
of by-product sales. Total cash costs are then divided by ounces of
gold sold to arrive at a per ounce figure. Co-product cash costs
remove the impact of other metal sales that are produced as a
by-product of gold production and apportion the cash costs to each
metal produced on a percentage of revenue basis, and subsequently
divides the amount by the total ounces of gold or silver or pounds
of copper sold, as the case may be, to arrive at per ounce or per
pound figures. Unless otherwise indicated, all total cash cost
information in this news release is net of by-product sales. This
data is furnished to provide additional information and is a
non-GAAP financial measure. Total cash costs and co-product cash
costs presented do not have a standardized meaning under IFRS and
may not be comparable to similar measures presented by other mining
companies. It should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS and is not necessarily indicative of cash flow from operations
under IFRS or operating costs presented under GAAP. Further details
regarding historical total cash costs and a reconciliation to the
nearest IFRS measures are provided in the MD&A accompanying New
Gold's financial statements filed from time to time on
www.sedar.com.
(3) AVERAGE REALIZED PRICE
"Average realized price per ounce or pound sold" is a non-GAAP
financial measure with no standard meaning under IFRS. Management
uses this measure to better understand the price realized in each
reporting period for gold, silver, and copper sales. Average
realized price includes realized gains and losses from gold hedge
settlements up until May 15, 2013 but
excludes from revenues unrealized gains and losses on non-hedged
derivative contracts and the revenue reduction related to the
non-cash accounting charge as the loss incurred on the monetization
of the company's legacy hedge position is realized into income over
the original term of the hedge contract. Average realized price is
intended to provide additional information only and does not have
any standardized definition under IFRS; it should not be considered
in isolation or as a substitute for measures of performance
prepared in accordance with IFRS. Other companies may calculate
this measure differently and this measure is unlikely to be
comparable to similar measures presented by other companies.
SOURCE New Gold Inc.