(All dollar figures are in US dollars unless otherwise
indicated)
TORONTO, Feb. 17, 2016 /PRNewswire/ - New Gold Inc.
("New Gold") (TSX:NGD) (NYSE MKT:NGD) today announces its 2015
fourth quarter and full-year financial results, provides an update
on its portfolio of development projects, including Rainy River and the results of the New Afton
C-zone feasibility study, and updates its year-end mineral reserve
and resource estimates. The company previously announced its
preliminary 2015 operational results and 2016 guidance on
January 20, 2016.
2015 FULL-YEAR HIGHLIGHTS
- Record full-year gold production of 435,718 ounces, exceeded
the guidance range of 390,000 to 430,000 ounces and delivered a 15%
increase in production over 2014
- All-in sustaining costs(1) of $809 per ounce, including total cash
costs(2) of $443 per
ounce
- Cash generated from operations of $263
million relative to $269
million in 2014
- Cash generated from operations before changes in non-cash
operating working capital(3) of $265 million compared to $310 million in the prior year
- Adjusted net loss(4) of $11
million, or $0.02 per
share
- Net loss of $201 million, or
$0.40 per share, including a
$99 million non-cash, after-tax loss
associated with the company's sale of its 30% interest in the El
Morro project
- Year-end cash balance of $336
million
2015 FOURTH QUARTER HIGHLIGHTS
- Record quarterly production with 131,719 ounces of gold and 29
million pounds of copper
- Record low all-in sustaining costs(1) of
$613 per ounce, including total cash
costs(2) of $389 per
ounce
- Cash generated from operations increased by 21% to $85 million compared to $70 million in the fourth quarter of 2014
- Cash generated from operations before changes in non-cash
operating working capital(3) of $77 million relative to $70 million in the fourth quarter of 2014
- Adjusted net earnings(4) of $3 million, or $0.01 per share
- Net loss of $10 million, or
$0.02 per share
DEVELOPMENT PROJECTS
- Rainy River remains on
schedule for mid-2017 production start with total estimated
development capital of $877 million
at the company's updated 2016 guidance exchange rate assumption of
C$1.40/US$
- New Afton C-zone feasibility study completed, which
demonstrates the potential to extend the mine's life by over five
years
MINERAL RESERVES AND RESOURCES
- 2015 year-end mineral reserves of 15.0 million ounces of gold,
1.2 billion pounds of copper and 76 million ounces of silver
- New Afton's gold and copper mineral reserve estimates increased
by 62% and 42%, respectively, with the addition of the C-zone to
the mine's reserves
"Our solid operating performance in 2015, and particularly our
record-setting fourth quarter, enabled us to generate cash flow
similar to last year, despite the decrease in metal prices," stated
Randall Oliphant, Executive
Chairman.
"Our robust cash flow, coupled with the additional liquidity
generated from the Rainy River stream sale and El Morro transaction
that we completed in 2015, provides us the opportunity to continue
to invest in the future of our business. Rainy River, which is now less than a year and
a half from starting production, provides New Gold with the
potential to increase production, reduce costs and increase average
mine life. Thereafter, we will look to the New Afton C-zone and
Blackwater as future opportunities for long-term value creation,"
added Mr. Oliphant.
2015 FINANCIAL RESULTS
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Three months ended
December 31
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Twelve months
ended December 31
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(in millions of
U.S. dollars, except per share amounts)
|
|
2015
|
2014
|
2015
|
2014
|
|
|
|
|
|
|
Revenues
|
|
$199.0
|
$188.1
|
$712.9
|
$726.0
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|
|
|
|
|
|
Operating
margin(5)
|
|
82.6
|
65.0
|
293.3
|
314.9
|
|
|
|
|
|
|
Adjusted net
earnings/(loss)(4)
|
|
2.6
|
13.4
|
(10.9)
|
45.2
|
Adjusted net
earnings/(loss) per share(4)
|
|
0.01
|
0.03
|
(0.02)
|
0.09
|
|
|
|
|
|
|
Net (loss)
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|
(9.5)
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(431.9)
|
(201.4)
|
(477.1)
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Net (loss) per
share
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(0.02)
|
(0.86)
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(0.40)
|
(0.95)
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|
|
|
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Cash generated from
operations before changes in
non-cash operating working capital(3)
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76.5
|
69.8
|
265.0
|
310.4
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Cash generated from
operations
|
|
84.9
|
69.9
|
262.6
|
268.8
|
|
|
|
|
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Fourth quarter revenues increased by $11
million, or 6%, relative to the prior-year quarter, as
higher gold sales volumes offset the impact of lower realized metal
prices(6). Relative to the fourth quarter of 2014, the
company's gold sales increased by 28% to 133,005 ounces, the
benefit of which was partially offset by lower metal prices. When
compared to the prior-year quarter, the average realized
price(6) decreased by $94
per ounce of gold, or 8%, $0.76 per
pound of copper, or 26%, and $1.29
per ounce of silver, or 8%. Revenues in the fourth quarter of 2014
included a non-cash accounting charge of $7
million related to the company's monetization of its legacy
hedge position in 2013. New Gold's 2015 revenues of $713 million remained in line with the prior year
as increased gold and silver sales volumes largely offset the
combination of lower copper sales volumes and lower realized metal
prices(6). The $13
million, or 2%, decrease in revenues in 2015 was
attributable to the net impact of a $78
million decrease driven by lower metal prices which was
offset by a $65 million increase due
to higher metal sales volumes. 2014 revenues included a non-cash
accounting charge of $27 million
related to the company's monetization of its legacy hedge position
in 2013.
New Gold's fourth quarter operating margin(5)
increased by $18 million, or 27%,
relative to the prior-year quarter despite lower realized metal
prices(6). The increase was attributable to the combined
benefit of higher revenues and lower operating expenses resulting
from the depreciation of the Canadian and Australian dollars
relative to the U.S. dollar as well as the company's ongoing cash
flow optimization initiatives. The company's 2015 operating
margin(5) decreased relative to the prior year as a
result of lower revenues, resulting from lower metal prices, and
slightly higher operating expenses. New Gold's 2015 operating
expenses increased despite a $42
million decrease in the company's total production spending
as fewer expenses were capitalized in 2015 than in 2014.
New Gold generated adjusted net earnings(4) of
$3 million, or $0.01 per share, in the fourth quarter of 2015
relative to $13 million, or
$0.03 per share, in the prior-year
quarter. Quarterly net earnings were impacted by the combination of
a $15 million increase in
depreciation and depletion expense resulting from higher
production, a $2 million increase in
exploration and business development expenses and a $2 million increase in finance costs as interest
is no longer being capitalized against Blackwater. These items were
partially offset by the increase in operating margin(5)
and a $2 million decrease in
corporate administration expenditures. The company reported a net
loss of $10 million, or $0.02 per share, in the fourth quarter. The net
loss included the impact of a non-cash $14
million after-tax impairment charge related to the Peak
Mines, a non-cash $13 million
inventory write-down at Cerro San Pedro and a $26 million pre-tax foreign exchange loss, which
was partially offset by a $9 million
pre-tax unrealized gain on the company's gold stream
obligation.
In 2015, New Gold had an adjusted net loss(4) of
$11 million, or $0.02 per share, relative to adjusted net
earnings(4) of $45
million, or $0.09 per share,
in the prior year. The adjusted net loss(4) was driven
by a decrease in operating margin(5), a $23 million increase in depreciation and
depletion expense resulting from higher production and a
$12 million increase in finance costs
as interest is no longer being capitalized against Blackwater.
These items were partially offset by an aggregate $10 million decrease in corporate administration
and exploration and business development expenditures. The
company's 2015 reported net loss of $201
million, or $0.40 per share,
was impacted by the non-cash $14
million after-tax impairment charge related to the Peak
Mines, the non-cash $13 million
inventory write-down at Cerro San Pedro, a $98 million pre-tax foreign exchange loss and a
non-cash $99 million after-tax loss
associated with the sale of El Morro. These items were partially
offset by a $6 million pre-tax
unrealized gain on the company's gold stream obligation.
The company's fourth quarter cash generated from operations
before changes in non-cash operating working capital(3)
of $77 million was $7 million, or 10%, higher than the prior-year
period. The increase was primarily a result of the $18 million increase in operating
margin(5) noted above, which was partially offset by a
$2 million increase in exploration
and business development expenditures. Cash generated from
operations before changes in non-cash operating working
capital(3) in the prior-year quarter included
$7 million in cash proceeds from the
sale of gold associated with the accounting charge related to the
company's monetization of its legacy hedge position in 2013. Cash
generated from operations in the fourth quarter of 2015 was
$85 million relative to $70 million in the prior-year quarter.
New Gold's 2015 cash generated from operations before changes in
non-cash operating working capital(3) of $265 million was impacted by the $22 million decrease in operating
margin(5) in 2015 and the fact that cash generated from
operations before changes in non-cash operating working
capital(3) in 2014 included $27
million in cash proceeds from the sale of gold associated
with the accounting charge related to the company's monetization of
its legacy hedge position in 2013. These negative differences
between 2015 and 2014 were partially offset by a cumulative
$10 million decrease in corporate
administration and exploration and business development
expenditures. Full-year cash generated from operations of
$263 million remained in line with
the prior year despite lower metal prices.
FINANCIAL UPDATE
New Gold's 2015 year-end cash and cash equivalents were
$336 million. The company also has a
$300 million revolving credit
facility, of which $116 million has
been used as at December 31, 2015 to
issue letters of credit, with the balance remaining undrawn. In
addition, as part of the company's July
2015 streaming transaction with RGLD Gold AG, a wholly-owned
subsidiary of Royal Gold Inc. ("Royal Gold"), the remaining
$75 million of the stream deposit is
scheduled to be paid once 60% of the estimated Rainy River project development capital has
been spent, which is expected to be in mid-2016, and other
customary conditions precedent have been met.
New Gold regularly reviews its expected financial commitments
and financial resources. Based on prevailing spot prices of gold,
copper and silver and the prevailing exchange rate for the Canadian
dollar to the U.S. dollar, the company believes that New Gold has
sufficient liquidity and capital resources to complete the
construction of Rainy River as
currently contemplated and within the Net Debt to EBITDA ("Leverage
Ratio") covenant of 3.5 to 1.0 initially provided in the revolving
credit facility. However, in order to provide the company with
additional financial flexibility in the event of a decline in metal
prices and/or appreciation of the Canadian dollar, on February 17, 2016, New Gold amended the revolving
credit facility to increase the maximum Leverage Ratio to 4.0 to
1.0 at the September 30, 2016
measurement date and to 4.5 to 1.0 for the three subsequent
quarter-end measurement periods. Thereafter, the maximum Leverage
Ratio will return to 3.5 to 1.0.
The leverage ratio contained in the company's agreement with
Royal Gold has also been adjusted to
match the revised maximum Leverage Ratio under the revolving credit
facility.
At the end of 2015, the face value of the company's long-term
debt was $800 million (book value –
$788 million). The components of the
debt include: $300 million of 7.00%
face value senior unsecured notes due in April 2020 and $500
million of 6.25% face value senior unsecured notes due in
November 2022. The company currently
has approximately 509 million shares outstanding.
"The combination of our year-end cash, the remaining stream
deposit and the amount available on our credit facility provides us
with total liquidity of $595
million," stated Brian Penny,
Executive Vice President and Chief Financial Officer. "Combining
this liquidity with our expected free cash flow, based on the
prevailing gold and copper prices and foreign exchange rates,
leaves us well positioned to fund the remaining development of
Rainy River."
2015 OPERATIONAL RESULTS
The fourth quarter of 2015 was New Gold's strongest operational
quarter of the year, delivering record gold and copper production.
As all of New Gold's operations delivered higher gold production in
the fourth quarter of 2015 relative to the prior-year quarter,
quarterly gold production increased by 24% to 131,719 ounces, which
resulted in a 15% increase in full-year production to 435,718
ounces. As a result, 2015 gold production exceeded the high end of
the company's guidance range of 390,000 to 430,000 ounces. The
increase in full-year gold production was driven by higher
production at three of the company's four operating mines, with
particularly notable increases at Mesquite and Cerro San Pedro.
New Gold's fourth quarter copper production increased by 18% to
29 million pounds relative to the prior-year quarter. The strong
finish to the year resulted in full-year copper production of 100
million pounds, which was in line with prior-year production and at
the low end of the company's 2015 guidance range of 100 to 112
million pounds. Full-year silver production increased by 28%
relative to 2014 to 1.9 million ounces which was within the
guidance range of 1.8 to 2.0 million ounces. Cerro San Pedro
produced 1.5 million ounces of silver while New Afton and the Peak
Mines together contributed an additional 0.4 million ounces.
As planned, the company's fourth quarter all-in sustaining
costs(1) of $613 per
ounce, including total cash costs(2) of $389 per ounce, were the lowest of the year and
well below the prior-year quarter. All of New Gold's operations
delivered production at all-in sustaining costs(1) below
$900 per ounce in the fourth quarter
of 2015 and the consolidated quarterly all-in sustaining
costs(1) of $613 per ounce
were the lowest ever for the company since New Gold began reporting
this metric in the second quarter of 2013.
The company's record setting fourth quarter operating
performance contributed to New Gold's 2015 all-in sustaining
costs(1) of $809 per
ounce, including total cash costs(2) of $443 per ounce. Full-year total cash
costs(2) increased relative to 2014 due to a
$69 million, or $278 per ounce, decrease in by-product revenues
primarily resulting from lower realized copper and silver prices.
The negative impact of lower by-product revenues was approximately
50% offset by the combined benefit of higher gold sales volumes,
increased operational efficiencies, decreased local currency
operating costs and the depreciation of the Canadian and Australian
dollars and Mexican peso relative to the U.S. dollar. At the same
time, New Gold's cumulative sustaining capital, exploration,
general and administrative and amortization of reclamation
expenditures decreased by $16
million, or $101 per ounce. As
a result, all-in sustaining costs(1) increased by only
$30 per ounce relative to 2014,
despite the significant decrease in by-product revenues.
As first indicated in New Gold's 2015 second quarter results,
the company's full-year costs were expected to be, and ultimately
were, above the guidance range set at the beginning of 2015. This
was due to the combined impact of realized copper and silver prices
being below the prices of $2.75 per
pound of copper and $16.00 per ounce
of silver when guidance was set, copper production being at the low
end of the guidance range and the increased relative gold
production from the company's higher cost mines. When compared to
the updated cost outlook provided by the company as part of its
third quarter results, New Gold's 2015 all-in sustaining
costs(1) of $809 per ounce
were below the range of $840 to $860
per ounce and the total cash costs(2) of $443 per ounce were within the range of
$430 to $450 per ounce.
For additional detail on the changes in production and costs at
New Gold's four operations in the fourth quarter and full year,
refer to the company's January 20,
2016 news release, New Gold Exceeds Guidance with Record
Gold Production and Provides 2016 Operational Outlook.
NEW GOLD SUMMARY
OPERATIONAL RESULTS
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Three months ended
December 31
|
Twelve months
ended December 31
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2015
|
2014
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2015
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2014
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GOLD PRODUCTION
(thousand ounces)
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New Afton
|
30.2
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25.3
|
105.5
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104.6
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Mesquite
|
43.4
|
36.2
|
134.9
|
106.7
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Peak Mines
|
34.8
|
21.9
|
89.9
|
99.0
|
Cerro San
Pedro
|
23.3
|
22.6
|
105.5
|
69.8
|
Total Gold
Production
|
131.7
|
106.0
|
435.7
|
380.1
|
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Total Gold Sales
(thousand ounces)
|
133.0
|
104.2
|
428.9
|
371.2
|
Average Realized Gold
Price per ounce(6)
|
$1,094
|
$1,188
|
$1,149
|
$1,256
|
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COPPER PRODUCTION
(million pounds)
|
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New Afton
|
25.1
|
20.4
|
86.0
|
84.5
|
Peak Mines
|
3.7
|
4.1
|
14.0
|
17.0
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Total Copper
Production
|
28.8
|
24.5
|
100.0
|
101.5
|
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Total Copper Sales
(million pounds)
|
25.5
|
25.5
|
92.9
|
97.6
|
Average Realized
Copper Price per pound(6)
|
$2.16
|
$2.92
|
$2.42
|
$3.02
|
|
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|
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SILVER PRODUCTION
(thousand ounces)
|
|
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New Afton
|
76.0
|
60.7
|
268.2
|
243.9
|
Peak Mines
|
38.9
|
39.2
|
117.4
|
138.6
|
Cerro San
Pedro
|
357.5
|
284.3
|
1,465.3
|
1,067.3
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Total Silver
Production
|
472.3
|
384.2
|
1,850.9
|
1,449.7
|
|
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|
|
|
|
|
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Total Silver Sales
(thousand ounces)
|
479.6
|
352.2
|
1,800.9
|
1,416.7
|
Average Realized
Silver Price per ounce(6)
|
$14.44
|
$15.73
|
$15.38
|
$18.86
|
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TOTAL CASH
COSTS(2)($ per ounce)
|
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New Afton
|
($614)
|
($1,199)
|
($724)
|
($1,248)
|
Mesquite
|
631
|
852
|
743
|
909
|
Peak Mines
|
552
|
707
|
791
|
658
|
Cerro San
Pedro
|
868
|
1,413
|
865
|
1,251
|
Total Cash
Costs(2)
|
$389
|
$414
|
$443
|
$312
|
|
|
|
|
|
|
|
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All-IN SUSTAINING
COSTS(1)($ per ounce)
|
|
|
|
|
New Afton
|
($340)
|
($560)
|
($242)
|
($650)
|
Mesquite
|
869
|
1,090
|
1,156
|
1,266
|
Peak Mines
|
706
|
1,231
|
1,071
|
1,025
|
Cerro San
Pedro
|
883
|
1,447
|
879
|
1,354
|
All-in Sustaining
Costs(1)
|
$613
|
$845
|
$809
|
$779
|
PROJECTS UPDATE
RAINY RIVER
Development activity at New Gold's Rainy River project, located in northwestern
Ontario, has continued to advance
with first production remaining on target for mid-2017. As
previously disclosed, the depreciation of the Canadian dollar has
helped to offset project development cost increases related
primarily to earthworks, tailings dam construction and the
installation of mechanical equipment, piping and electrical in the
processing plant. Based on the development capital spent to date,
and assuming a C$1.40/US$ exchange
rate on capital expenditures going forward, the total estimated
Rainy River development capital
cost remains at approximately $877
million. The total capital cost estimate includes
$25 million of investment tax credits
receivable associated with 2014 and 2015 project spending. Looking
forward, every $0.05 change in the
Canadian dollar to U.S. dollar exchange rate impacts the estimated
total capital costs by approximately $15
million.
RAINY RIVER –2015 YEAR-END
PROJECT UPDATES
- Overall construction progress is currently 25% complete
- Bids received for all major construction and installation
contracts
- Plant site earthworks over 85% complete
- Concrete placement over 40% complete
- Relocation of Highway 600 completed on schedule in December 2015
- Assembly of initial mine fleet largely complete – have
successfully commissioned seven 218-tonne trucks, two hydraulic
shovels, two loaders, three dozers and two blast hole drills
- Exceeded target for mine development material movement by 15%
in the fourth quarter of 2015
- No Lost Time Incidents since New Gold acquired the project in
2013
Project capital expenditures at Rainy
River during the fourth quarter totalled $142 million, bringing the 2015 project
development capital spending to $241
million. The total project development capital spending
through December 31, 2015 was
$312 million, or approximately 35% of
the estimated capital cost. As a result of the increase in the
maximum Leverage Ratio under the company's revolving credit
facility as well as the increase in metal prices over the course of
the last month, New Gold plans to increase the amount of
Rainy River capital spending in
2016 relative to the previously estimated $375 million. In 2016, the company plans to spend
approximately $500 million on the
development of Rainy River with
the balance to be spent in the first half of 2017.
As previously disclosed, in July
2015, New Gold entered into a streaming transaction with
Royal Gold. Under the terms of the
transaction, Royal Gold agreed to
provide New Gold with a deposit of $175
million in exchange for the delivery by New Gold of a
percentage of the future gold and silver production from the Rainy
River project. Royal Gold paid
$100 million of the deposit
concurrent with entering into the transaction and the remaining
$75 million will be paid when 60% of
the estimated project development capital has been spent and other
customary conditions precedent are met. Based on the currently
planned timing of development capital expenditures at Rainy River, it is estimated that 60% of the
project development costs will have been spent in mid-2016.
Upon the start of production at Rainy
River, New Gold will deliver 6.50% of the project's monthly
gold production and 60% of the monthly silver production to
Royal Gold until a total of 230,000
ounces of gold and 3.1 million ounces of silver have been delivered
(the "Ounce Thresholds"). Once each of the Ounce Thresholds has
been satisfied, the stream percentage for that metal will decrease
by 50% such that New Gold will thereafter be required to deliver
3.25% of the project's gold production and 30% of the silver
production. In addition to the $175
million deposit, Royal Gold
will be required to pay New Gold in cash 25% of the average spot
gold price and silver price at the time the stream ounces are
delivered.
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 longer term exploration potential in a great mining
jurisdiction. Rainy River is
expected to generate significant gold production growth for New
Gold at costs below the company's 2016 guidance for all-in
sustaining costs(1). Relative to the company's
consolidated 2016 gold production guidance of 360,000 to 400,000
ounces, Rainy River alone is
expected to produce an average of 325,000 ounces of gold annually
at estimated all-in sustaining costs(1) of approximately
$670 per ounce, which will more than
offset the decrease in production and cash flow arising from the
transition of Cerro San Pedro to residual leaching. The company
looks forward to advancing the Rainy River project and providing
further updates on its development through the remainder of 2016
and beyond.
NEW AFTON C-ZONE
New Gold is pleased to report the results of the feasibility
study 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 that is currently being mined through block caving.
At the end of 2015, the B-zone had remaining mineral reserves of
36.5 million tonnes at 0.55 grams per tonne gold and 0.85% copper
which should support production from this zone through 2022.
Thereafter, ore would need to be sourced from the C-zone in order
to extend New Afton's mine life.
NEW AFTON C-ZONE – FEASIBILITY STUDY RESULTS
- Mineral reserves of 25.0 million tonnes at diluted grades of
0.72 grams per tonne gold and 0.78% copper
- Contained metal of 583,000 ounces of gold and 430 million
pounds of copper
- 12% increase in contained gold and 14% increase in contained
copper when compared to 2015 scoping study
- Full-year average annual production of 108,000 ounces of gold
and 81 million pounds of copper
- Development capital costs of $402
million (exchange rate assumption of C$1.25/US$), including $47
million of contingency and a $41
million provision for capital escalation given the six-year
development timeline
- The increase in development capital relative to the 2015
scoping study is primarily driven by the inclusion of the capital
escalation estimate
- Total operating costs, including mining, processing and general
and administrative, of $19.35 per
tonne
- Total sustaining capital costs of $107
million, or approximately $20
million per year
- Project economics – at the company's mineral reserve
assumptions of $1,200 per ounce gold,
$2.75 per pound copper and a
C$1.25/US$ exchange rate, the C-zone
project has an after-tax 5% NPV of $84
million, an IRR of 10.3% and payback period of 3.4 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 change by approximately
$18 million and 1.0%,
respectively
- 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 change by approximately
$34 million and 1.9%,
respectively
- For every $0.05 change in the
foreign exchange rate (at a constant gold and copper price), the
after-tax NPV and IRR change by approximately $24 million and 1.5%, respectively
New Gold used the company's reserve metal price and foreign
exchange rate assumptions for the C-zone base case as the project
represents a potential extension to the New Afton mine life and
thus has a longer development timeline. The base case gold and
copper price assumptions are consistent with long-term consensus
pricing estimates and are below the three-year trailing average
price for each metal. At consistent input assumptions for gold and
copper prices and the Canadian to U.S. dollar exchange rate, the
feasibility study economics remain in line with the 2015 scoping
study as the increase in contained metal has offset the higher
development capital estimate resulting from the addition of the
capital escalation provision. Subject to prevailing market
conditions and receipt of the requisite permits, development of the
C-zone would begin after the start of production at Rainy River.
Once development starts, construction of the main access ramps
to the bottom of the C-zone is expected to take approximately four
years to complete. Thereafter, development of the block cave
production levels would begin, with first ore production expected
two years later, resulting in a total of approximately six years
from the start of development to first production from the C-zone.
The development capital spending is weighted to the second half of
the development schedule with over 70% of the $402 million of development capital expected to
be spent in the final 3.5 years of C-zone development.
The C-zone extraction level would be approximately 550 metres
below the current B-zone extraction level. 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 feasibility study results support the
storage of the C-zone tailings in an expanded New Afton tailings
storage facility. The majority of the mobile mining equipment would
be reallocated from the current operation, with estimated
refurbishment and replacement requirements factored into the
capital cost estimate.
From the results of the testwork programs completed, the
mineralogy in the C-zone is expected to be consistent with the
mineralogy in the west cave of New Afton's B-zone. Metallurgical
grades and recoveries for C-zone ore were calculated using existing
New Afton recovery curves and concentrate grades.
As part of the feasibility study, detailed modelling was
completed to estimate the area of subsidence from the development
and mining of the C-zone, and it was determined that a portion of
the tailings dam from the historic Afton mine is located within the
predicted area of subsidence. Based on the recommendations of three
independent geotechnical consultants, as part of the development of
the C-zone, New Gold would stabilize the historic facility through
a dewatering and consolidation program. A site investigation
program was conducted in 2014 and 2015 to characterize the tailings
in the historic facility which was followed up with a field-scale
trial program in 2015 to test the proposed stabilization methods.
The trial program was successful and confirmed the expected
performance of the stabilization and provided key design parameters
for the feasibility study.
It is expected that the permits for the C-zone project will
involve amendments to the current Mines Act and effluent discharge
permits, rather than applications for new permits. The project plan
should not result in significant additional surface disturbance or
environmental impact as current infrastructure is expected to be
used wherever possible. 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 any
required amendments to be made as part of the permit amendment
process.
As the C-zone remains open to the west and at depth, New Gold
plans to spend approximately $3
million in 2016 to further drill test the ore body with the
objective of adding additional mine life to the C-zone. Based on
the feasibility study, during the years of full production from the
C-zone, the average annual pre-tax free cash flow is estimated to
be approximately $200 million.
BLACKWATER
The company's Blackwater project, located in south-central
British Columbia, is expected to
produce an average of 485,000 ounces of gold per year at below
industry average costs. The current focus at Blackwater is
attaining the approval of the Environmental Assessment. On
January 20, 2016, the 30-day public
comment period on the Environmental Assessment report commenced.
Capital expenditures during the fourth quarter were $3 million and were related to the continued
advancement of the environmental assessment process and associated
environmental and engineering studies. Capital expenditures at
Blackwater totalled $7 million in
2015.
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 followed by the New Afton
C-zone. Thereafter, the timing of Blackwater's development will be
driven by prevailing market conditions over the following
years.
2015 YEAR-END MINERAL RESERVES AND RESOURCES AND 2016
EXPLORATION PLANS
MINERAL RESERVES
AND RESOURCES SUMMARY TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at December 31,
2015
|
|
As at December 31,
2014
|
|
|
|
|
Gold
Koz
|
|
Silver
Moz
|
|
Copper
Mlbs
|
|
Gold
Koz
|
|
Silver
Moz
|
|
Copper
Mlbs
|
Proven and
Probable reserves
|
|
|
|
14,985
|
|
76
|
|
1,193
|
|
17,646
|
|
82
|
|
2,821
|
New Afton
|
|
|
|
1,228
|
|
4
|
|
1,112
|
|
760
|
|
3
|
|
781
|
Mesquite
|
|
|
|
1,492
|
|
-
|
|
-
|
|
1,679
|
|
-
|
|
-
|
Peak Mines
|
|
|
|
267
|
|
1
|
|
82
|
|
375
|
|
1
|
|
89
|
Cerro San
Pedro
|
|
|
|
13
|
|
0
|
|
-
|
|
215
|
|
8
|
|
-
|
Rainy
River
|
|
|
|
3,814
|
|
9
|
|
-
|
|
3,772
|
|
9
|
|
-
|
Blackwater
|
|
|
|
8,170
|
|
61
|
|
-
|
|
8,170
|
|
61
|
|
-
|
El Morro (30%) - Sold
interest during 2015
|
|
|
|
-
|
|
-
|
|
-
|
|
2,675
|
|
-
|
|
1,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Measured and
Indicated resources
(exclusive of reserves)
|
|
|
|
6,659
|
|
34
|
|
1,065
|
|
8,094
|
|
34
|
|
1,728
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inferred
resources
|
|
|
|
1,844
|
|
24
|
|
194
|
|
3,488
|
|
21
|
|
1,746
|
Note: See the
Detailed Mineral Reserve and Resource Tables and the Notes to
Mineral Reserve and Resource Estimates at the
end of this news release for further detail regarding December 31, 2015 estimates. For details
regarding December 31, 2014
Mineral Reserve and Resource estimates, including a breakdown by
category, refer to New Gold's Annual
Information Form for
the year ended December 31, 2014, dated March 27,
2015.
|
2015 YEAR-END MINERAL RESERVES AND RESOURCES
As part of New Gold's estimate of 2015 year-end mineral reserves
and resources, the company maintained the gold price assumption
used to calculate mineral reserves at $1,200 per ounce of gold for all of its assets.
The reserve pricing assumption for copper was lowered by
$0.25 per pound to $2.75 per pound and the silver price assumption
was lowered by $3.00 per ounce to
$15.00 per ounce. In calculating its
cut-off grades for 2015 year-end mineral reserve and resource
estimates, New Gold used exchange rate assumptions of $1.25, $1.35 and
$17.00 for the Canadian dollar,
Australian dollar and Mexican peso to the U.S. dollar.
On November 24, 2015, New Gold
announced the completion of the sale of its 30% interest in El
Morro to Goldcorp Inc. ("Goldcorp"). In exchange for the company's
interest, New Gold received $62
million in net cash ($90
million less taxes and transaction costs) and the company's
$94 million carried funding loan
payable to Goldcorp was cancelled. In addition, though the
company's 2015 year-end mineral reserves and resources do not
include the gold and copper from El Morro, as part of the
transaction, New Gold will receive a 4% gold stream on gold
production from the El Morro property. For reference, 4% of El
Morro's 2014 year-end mineral reserves is equivalent to 357,000
ounces of gold.
On a consolidated basis, after adjusting for the impact of the
El Morro sale, the company's total gold mineral reserves of 15.0
million ounces remained in line with year-end 2014. New Gold was
able to offset approximately 0.7 million ounces of depletion from
2015 mining activity through the addition of 0.6 million ounces of
C-zone gold reserves at New Afton and a net total of 0.1 million
ounces at the balance of the company's assets. At the same time,
after adjusting for the El Morro sale, New Gold's consolidated 2015
year-end copper mineral reserves increased by 323 million pounds to
1.2 billion pounds, despite the lower copper reserve pricing
assumption and approximately 120 million pounds of depletion from
mining activities in 2015. The increase in copper mineral reserves
was a result of the addition of 430 million pounds of C-zone copper
reserves at New Afton and the Peak Mines replacing approximately
50% of the mine's 2015 copper production.
The change in consolidated Measured and Indicated gold
resources, exclusive of reserves, was primarily attributable to the
combination of a significant portion of the New Afton C-zone
resources being converted to mineral reserves and the sale of El
Morro.
The 2015 year-end mineral reserves for New Gold's Rainy River project increased slightly to 3.8
million ounces of gold and 9 million ounces of silver as a result
of updates to the open pit mine plan and the incorporation of
Bayfield Ventures Corp.'s resources, which the company acquired in
early 2015, into the Rainy River underground mine plan and mineral
reserves. Mineral reserves for the Blackwater project remain
unchanged relative to the 2014 year-end estimate.
Relative to the end of 2014, through the addition of the C-zone,
New Afton's total gold and copper mineral reserves increased by 62%
and 42%, respectively, despite the impact to reserves of 2015
mining activity and the lower copper reserve pricing
assumption.
At the Peak Mines, though the gold and copper mineral reserves
decreased relative to the end of 2014 primarily due to 2015 mining
activity, both the gold and copper Measured and Indicated
resources, exclusive of reserves, and Inferred resources increased
meaningfully. In addition to 2015 mine depletion, approximately 10%
of the mineral reserves in the Perseverance ore body were excluded
from the year-end gold mineral reserves due to the geotechnical
challenges encountered earlier in 2015 and the resulting changes to
the mine plan. Measured and Indicated gold resources, exclusive of
reserves, increased by 30,000 ounces due to the addition of the
newly-discovered Chronos zone which is located directly above
Perseverance and in close proximity to the Peak mill. Similarly,
the 108,000 ounce increase in Inferred gold resources to 200,000
ounces was primarily due to the delineation of the Chronos zone
which to date is estimated to contain an Inferred resource of 190
thousand tonnes grading 13.4 grams per tonne of gold. The increase
in Measured and Indicated copper resources, exclusive of reserves,
to 94 million pounds was primarily driven by the further
delineation and extension of the Jubilee zone located adjacent to
the New Cobar mine to the north along the mine corridor.
The decrease in 2015 year-end mineral gold reserves at both
Mesquite and Cerro San Pedro relative to the prior year was a
result of mine depletion. At Mesquite the mineral reserve estimate
was also updated to incorporate the results of the infill drilling
completed in 2015 which resulted in the conversion of a portion of
the mineral reserves scheduled to be mined in 2016 to the Proven
classification status. At Cerro San Pedro there are limited gold
and silver mineral reserves remaining as the mine is entering its
final few months of mining before transitioning to residual
leaching.
2016 EXPLORATION PLANS
New Gold's 2016 exploration plans will be focused on three
assets, the Peak Mines, New Afton and Rainy River, with scheduled exploration
spending totalling up to $16 million,
of which $12 million is expected to
be expensed. New Gold's consolidated 2016 guidance for all-in
sustaining costs(1) includes $12
million, or approximately $30
per ounce, of the total $16 million
of planned exploration spending.
Consistent with prior years, the objective at the Peak Mines in
2016 is to further extend the mine's history of mineral reserve and
resource replacement, with a particular focus on the
newly-discovered Chronos and Anjea zones. Chronos and Anjea were
discovered as part of New Gold's 2015 exploration program and lie
at opposite ends of Peak's nine- kilometre mine corridor. A total
of 50,000 metres of exploration drilling is planned at the Peak
Mines in 2016, with approximately 10,000 metres allocated to each
of Chronos and Anjea. Approximately 15,000 metres of the total 2016
program will be allocated to drill testing the multiple additional
targets that lie between Chronos and Anjea on the mine corridor.
The remaining 15,000 metres will be directed toward the conversion
of Inferred resources at Perseverance, New Cobar and Jubilee to
Measured and Indicated status. New Gold plans $8 million of exploration spending at the Peak
Mines in 2016.
New Gold's $6 million exploration
program at New Afton in 2016 is scheduled to be split between the
further delineation and potential expansion of the C-zone and the
testing of additional surface and underground targets. Subject to
continued positive drilling results, a drill program totalling up
to 10,000 metres is planned for New Afton in 2016.
At Rainy River, the
$2 million exploration program in
2016 is focused within a five-kilometre radius of the mine
development area and is scheduled to include surface
reconnaissance, target generation and, subject to positive results,
execution of a 2,500 metre drilling program in the second half of
the year.
2016 GUIDANCE
NEW GOLD 2016
GUIDANCE
|
|
|
|
|
|
|
|
Gold
Production
|
Copper
Production
|
Silver
Production
|
Total Cash
Costs(2)
|
All-in Sustaining
Costs(1)
|
|
(thousand
ounces)
|
(million
pounds)
|
(million
ounces)
|
($ per
ounce)
|
($ per
ounce)
|
|
|
|
|
|
|
New Afton
|
90 - 100
|
75 - 85
|
--
|
($335) -
($295)
|
$95 - $135
|
Mesquite
|
130 - 140
|
--
|
--
|
$590 -
$630
|
$1,015 -
$1,055
|
Peak Mines
|
80 -
90
|
6 - 8
|
--
|
$800 -
$840
|
$1,020 -
$1,060
|
Cerro San
Pedro
|
60 -
70
|
--
|
1.3 - 1.5
|
$755 -
$795
|
$765 -
$805
|
New Gold
Consolidated
|
360 -
400
|
81 -
93
|
1.6 -
1.8
|
$435 -
$475
|
$825 -
$865
|
Note: New Afton and
the Peak Mines are expected to contribute a total of approximately
0.3 million ounces of silver production in 2016.
|
CONSOLIDATED PRODUCTION AND COSTS
New Gold originally provided 2016 guidance for production and
costs on January 20, 2016. As a
result of significant movements in foreign exchange rates since the
company's guidance was set and the impact of additional cost
reductions at Mesquite and Cerro San Pedro, New Gold is updating
its 2016 cost guidance with a net $5
per ounce decrease in all-in sustaining costs(1). The
company's guidance for gold, copper and silver production remains
unchanged.
New Gold's by-product pricing assumptions for 2016 of
$2.00 per pound of copper and
$14.00 per ounce of silver remain
unchanged, and are slightly below current spot prices and below the
prices realized in 2015 of $2.42 per
pound of copper and $15.38 per ounce
of silver. The company has updated its 2016 assumption for the
Canadian and Australian dollars to $1.40 to the U.S. dollar from the previously
assumed $1.45 to the U.S. dollar, as
this is more consistent with current spot exchange rates. The
Mexican peso exchange rate of $18.00
to the U.S. dollar remains unchanged. The exchange rate assumptions
compare to 2015 actual average exchange rates of $1.28, $1.33 and
$15.88 for the Canadian dollar,
Australian dollar and Mexican peso to the U.S. dollar.
On a consolidated basis, the cost impact of the less favourable
exchange rate assumptions has been offset by an estimated
$8 million decrease in Mesquite's
2016 sustaining capital expenditures, primarily related to reduced
capitalized waste stripping, and a decrease in Cerro San Pedro's
operating expenses. At Cerro San Pedro, there is an estimated
$5 million decrease in previously
incurred heap leach inventory costs flowing into 2016 total cash
costs(2). In aggregate, relative to the original
January 2016 guidance, these updates
have resulted in slightly higher cost estimates at New Afton and
the Peak Mines which have been offset by lower cost estimates at
Mesquite and Cerro San Pedro. On a consolidated basis, the
company's 2016 total cash costs(2) are expected to
remain in line with the $443 per
ounce achieved in 2015, despite a decrease in by-product revenues
resulting from the combination of lower copper and silver price
assumptions and expected lower copper production. Based on New
Gold's 2016 copper and silver price assumptions and production
expectations, by-product revenues would decrease by approximately
$60 million, or $80 per ounce, when compared to the prior year.
Offsetting this, total cash costs(2) are expected to
benefit from the continued implementation of business improvement
and cost savings initiatives across the company's sites as well as
the lower Canadian and Australian dollar exchange rate assumptions
and lower diesel prices relative to 2015.
New Gold's 2016 total sustaining costs, including sustaining
capital, exploration, general and administrative and amortization
of reclamation expenditures, are expected to decrease by
approximately $10 million, or 6%,
relative to the prior year. However, as the company's
sustaining costs are forecast to be allocated across a lower gold
production base, New Gold's 2016 all-in sustaining
costs(1) are expected to increase by approximately
$35 per ounce when compared to the
$809 per ounce delivered in 2015. In
2016, Mesquite, the Peak Mines and Cerro San Pedro are expected to
deliver production at lower all-in sustaining
costs(1).
On a co-product basis, New Afton's updated 2016 all-in
sustaining costs(1) are expected to be $705 to $745 per ounce of gold and $1.25 to $1.40 per pound of copper, which include
estimated co-product total cash costs(2) of $530 to $570 per ounce of gold and $0.95 to $1.10 per pound of copper.
New Gold's 2016 consolidated gold production is expected to
decrease relative to the prior year as a result of the planned
transition of Cerro San Pedro from active mining to residual
leaching. Gold production at the company's other three operations
should remain in line with 2015 production. Copper production is
expected to decrease as a result of lower copper production at New
Afton and the Peak Mines. At New Afton, the decrease in production
is a result of lower copper grade. At the Peak Mines, given current
gold and copper prices, the team is focused on mining and
processing the mine's relatively higher grade gold stopes while
reducing the overall tonnes mined in light of the geotechnical
challenges experienced in 2015. Consolidated silver production is
scheduled to remain in line with the prior year.
Consistent with previous years, New Gold's 2016 full-year gold
production is not scheduled to be evenly distributed across the
four quarters. Consolidated gold production is expected to be
weighted slightly more to the first half of the year as Cerro San
Pedro transitions to residual leaching in the second half of
2016.
NEW GOLD 2016
ALL-IN SUSTAINING COSTS(1)- KEY
SENSITIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
Category
|
|
Copper
Price
|
|
Silver
Price
|
|
CDN/USD
|
|
AUD/USD
|
|
MXN/USD
|
Base
Assumption
|
|
$2.00
|
|
$14.00
|
|
$1.40
|
|
$1.40
|
|
$18.00
|
Sensitivity
|
|
+/-$0.25
|
|
+/-$1.00
|
|
+/-$0.05
|
|
+/-$0.05
|
|
+/-$1.00
|
|
|
|
|
|
|
|
|
|
|
|
COST PER OUNCE
IMPACT
|
|
|
|
|
|
|
|
|
|
|
New Afton
|
|
+/-$210
|
|
--
|
|
+/-$55
|
|
--
|
|
--
|
Mesquite
|
|
--
|
|
--
|
|
--
|
|
--
|
|
--
|
Peak Mines
|
|
+/-$20
|
|
--
|
|
--
|
|
+/-$35
|
|
--
|
Cerro San
Pedro
|
|
--
|
|
+/-$20
|
|
--
|
|
--
|
|
+/-$30
|
New Gold
Total
|
|
+/-$55
|
|
+/-$5
|
|
+/-$20
|
|
+/-$10
|
|
+/-$5
|
WEBCAST AND CONFERENCE CALL
A webcast and conference call to discuss these results will be
held on Thursday, February 18, 2016
beginning at 2:00 p.m. Eastern time.
Participants may participate via webcast by registering on our
website at www.newgold.com. You may also listen to the conference
call by calling toll free 1-888-231-8191, or 1-647-427-7450 outside
of the U.S. and Canada. A recorded
playback of the conference call will be available until
March 31, 2016 by calling toll free
1-855-859-2056, or 1-416-849-0833 outside of the U.S. and
Canada, passcode 29140919. An
archived webcast will also be available until May 31, 2016 at www.newgold.com.
ABOUT NEW GOLD INC.
New Gold is an intermediate gold mining company. The company has
a portfolio of four producing assets and two significant
development projects. The 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 a 4% gold
stream on 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.
DETAILED MINERAL RESERVE AND RESOURCE TABLES
Mineral Reserves
estimate as at December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metal
grade
|
Contained
metal
|
|
Tonnes
000s
|
Gold
g/t
|
Silver
g/t
|
Copper
%
|
Gold
Koz
|
Silver
Koz
|
Copper
Mlbs
|
|
|
|
|
|
|
|
|
NEW
AFTON
|
|
|
|
|
|
|
|
A&B
Zones
|
|
|
|
|
|
|
|
Proven
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Probable
|
36,510
|
0.55
|
2.4
|
0.85
|
646
|
2,765
|
681
|
C
Zone
|
|
|
|
|
|
|
|
Proven
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Probable
|
25,040
|
0.72
|
1.8
|
0.78
|
583
|
1,447
|
430
|
Total New Afton
P&P
|
61,550
|
0.62
|
2.1
|
0.82
|
1,228
|
4,212
|
1,112
|
|
|
|
|
|
|
|
|
MESQUITE
|
|
|
|
|
|
|
|
Proven
|
8,473
|
0.51
|
-
|
-
|
139
|
-
|
-
|
Probable
|
75,807
|
0.56
|
-
|
-
|
1,353
|
-
|
-
|
Total Mesquite
P&P
|
84,280
|
0.55
|
-
|
-
|
1,492
|
-
|
-
|
|
|
|
|
|
|
|
|
PEAK
MINES
|
|
|
|
|
|
|
|
Proven
|
1,520
|
3.31
|
7.2
|
1.30
|
162
|
349
|
44
|
Probable
|
1,360
|
2.42
|
6.7
|
1.29
|
105
|
291
|
38
|
Total Peak Mines
P&P
|
2,870
|
2.89
|
6.9
|
1.29
|
267
|
640
|
82
|
|
|
|
|
|
|
|
|
CERRO SAN
PEDRO
|
|
|
|
|
|
|
|
Proven
|
289
|
0.35
|
9.7
|
-
|
3
|
90
|
-
|
Probable
|
748
|
0.41
|
13.7
|
-
|
10
|
329
|
-
|
Total CSP
P&P
|
1,038
|
0.40
|
12.6
|
-
|
13
|
419
|
-
|
|
|
|
|
|
|
|
|
RAINY
RIVER
|
|
|
|
|
|
|
|
Direct
processing material
|
|
|
|
|
|
|
|
Open
Pit
|
|
|
|
|
|
|
|
Proven
|
17,001
|
1.40
|
2.0
|
-
|
763
|
1,075
|
-
|
Probable
|
52,950
|
1.18
|
2.8
|
-
|
2,003
|
4,690
|
-
|
Open Pit P&P
(direct processing)
|
69,952
|
1.23
|
2.6
|
-
|
2,766
|
5,765
|
-
|
Underground
|
|
|
|
|
|
|
|
Proven
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Probable
|
4,499
|
5.00
|
11.8
|
-
|
723
|
1,709
|
-
|
Underground P&P
(direct processing)
|
4,499
|
5.00
|
11.8
|
-
|
723
|
1,709
|
-
|
Stockpile
material
|
|
|
|
|
|
|
|
Open
Pit
|
|
|
|
|
|
|
|
Proven
|
5,496
|
0.37
|
1.5
|
-
|
65
|
259
|
-
|
Probable
|
23,302
|
0.35
|
2.3
|
-
|
261
|
1,701
|
-
|
Open Pit P&P
(stockpile)
|
28,798
|
0.35
|
2.1
|
-
|
325
|
1,959
|
-
|
Total
P&P
|
|
|
|
|
|
|
|
Proven
|
22,498
|
1.14
|
1.8
|
-
|
828
|
1,333
|
-
|
Probable
|
80,752
|
1.15
|
3.1
|
-
|
2,987
|
8,100
|
-
|
Total Rainy River
P&P
|
103,250
|
1.15
|
2.8
|
-
|
3,814
|
9,433
|
-
|
|
|
|
|
|
|
|
|
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
|
-
|
Total
P&P
|
|
|
|
|
14,985
|
75,504
|
1,193
|
|
|
|
|
|
|
|
|
Measured and
Indicated Mineral Resource estimate (exclusive of Reserves) as at
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
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
|
16,940
|
0.69
|
2.1
|
0.87
|
377
|
1,134
|
325
|
Indicated
|
10,512
|
0.46
|
2.2
|
0.68
|
156
|
749
|
157
|
A&B Zone
M&I
|
27,451
|
0.60
|
2.1
|
0.80
|
534
|
1,878
|
482
|
C-zone
|
|
|
|
|
|
|
|
Measured
|
2,230
|
1.05
|
2.2
|
1.21
|
75
|
161
|
59
|
Indicated
|
15,462
|
0.79
|
2.2
|
0.96
|
392
|
1,075
|
326
|
C-zone
M&I
|
17,693
|
0.82
|
2.2
|
0.99
|
467
|
1,226
|
386
|
HW
Lens
|
|
|
|
|
|
|
|
Measured
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Indicated
|
10,560
|
0.51
|
2.1
|
0.44
|
174
|
703
|
102
|
HW Lens
M&I
|
10,560
|
0.51
|
2.1
|
0.44
|
174
|
703
|
102
|
Total New Afton
M&I
|
55,704
|
0.66
|
2.1
|
0.79
|
1,175
|
3,809
|
971
|
|
|
|
|
|
|
|
|
MESQUITE
|
|
|
|
|
|
|
|
Measured
|
4,595
|
0.40
|
-
|
-
|
60
|
-
|
-
|
Indicated
|
50,524
|
0.47
|
-
|
-
|
771
|
-
|
-
|
Total Mesquite
M&I
|
55,119
|
0.47
|
-
|
-
|
831
|
-
|
-
|
|
|
|
|
|
|
|
|
PEAK
MINES
|
|
|
|
|
|
|
|
Measured
|
2,000
|
3.56
|
5.9
|
0.94
|
220
|
370
|
41
|
Indicated
|
2,100
|
3.20
|
8.9
|
1.14
|
220
|
610
|
53
|
Total Peak Mines
M&I
|
4,100
|
3.37
|
7.5
|
1.04
|
440
|
980
|
94
|
|
|
|
|
|
|
|
|
CERRO SAN
PEDRO
|
|
|
|
|
|
|
|
Measured
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Indicated
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Total CSP
M&I
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
RAINY
RIVER
|
|
|
|
|
|
|
|
Direct
processing material
|
|
|
|
|
|
|
|
Open
Pit
|
|
|
|
|
|
|
|
Measured
|
3,294
|
1.19
|
1.8
|
-
|
127
|
185
|
-
|
Indicated
|
37,530
|
1.15
|
3.5
|
-
|
1,391
|
4,189
|
-
|
Open Pit M&I
(direct processing)
|
40,824
|
1.15
|
3.3
|
-
|
1,518
|
4,374
|
-
|
Underground
|
|
|
|
|
|
|
|
Measured
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Indicated
|
4,834
|
3.74
|
12.6
|
-
|
581
|
1,952
|
-
|
Underground M&I
(direct processing)
|
4,834
|
3.74
|
12.6
|
-
|
581
|
1,952
|
-
|
Stockpile
material
|
|
|
|
|
|
|
|
Open
Pit
|
|
|
|
|
|
|
|
Measured
|
1,244
|
0.35
|
1.3
|
-
|
14
|
51
|
-
|
Indicated
|
36,360
|
0.43
|
2.5
|
-
|
500
|
2,942
|
-
|
Open Pit M&I
(stockpile)
|
37,604
|
0.43
|
2.5
|
-
|
514
|
2,993
|
-
|
Total
M&I
|
|
|
|
|
|
|
|
Measured
|
4,538
|
0.97
|
1.6
|
-
|
141
|
236
|
-
|
Indicated
|
78,724
|
0.98
|
3.6
|
-
|
2,472
|
9,083
|
-
|
Total Rainy River
M&I
|
83,262
|
0.98
|
3.5
|
-
|
2,613
|
9,319
|
-
|
|
|
|
|
|
|
|
|
BLACKWATER
|
|
|
|
|
|
|
|
Direct
processing material
|
|
|
|
|
|
|
|
Measured
|
289
|
1.39
|
6.6
|
-
|
13
|
61
|
-
|
Indicated
|
41,128
|
0.86
|
4.5
|
-
|
1,135
|
5,950
|
-
|
M&I (direct
processing)
|
41,417
|
0.86
|
4.5
|
-
|
1,147
|
6,012
|
-
|
Stockpile
material
|
|
|
|
|
|
|
|
Measured
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Indicated
|
14,070
|
0.32
|
4.0
|
-
|
144
|
1,809
|
-
|
M&I
(stockpile)
|
14,070
|
0.32
|
4.0
|
-
|
144
|
1,809
|
-
|
Total Blackwater
M&I
|
55,487
|
0.72
|
4.4
|
-
|
1,292
|
7,821
|
-
|
|
|
|
|
|
|
|
|
CAPOOSE
|
|
|
|
|
|
|
|
Indicated
|
17,671
|
0.54
|
22.1
|
-
|
308
|
12,562
|
-
|
Total
M&I
|
|
|
|
|
6,659
|
34,491
|
1,065
|
Inferred Resource
estimate as at December 31, 2015
|
|
|
|
|
|
|
|
Metal
grade
|
|
Contained
metal
|
|
|
Tonnes
000s
|
|
Gold
g/t
|
|
Silver
g/t
|
|
Copper
%
|
|
Gold
Koz
|
|
Silver
Koz
|
|
Copper
Mlbs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NEW
AFTON
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A&B-zones
|
|
6,875
|
|
0.35
|
|
1.3
|
|
0.36
|
|
77
|
|
296
|
|
55
|
C-zone
|
|
6,856
|
|
0.48
|
|
1.5
|
|
0.54
|
|
106
|
|
328
|
|
87
|
HW Lens
|
|
969
|
|
0.69
|
|
1.5
|
|
0.46
|
|
21
|
|
45
|
|
10
|
Total New Afton
Inferred
|
|
14,702
|
|
0.43
|
|
1.4
|
|
0.45
|
|
205
|
|
672
|
|
145
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MESQUITE
|
|
4,858
|
|
0.37
|
|
-
|
|
-
|
|
59
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PEAK
MINES
|
|
2,000
|
|
3.14
|
|
10.9
|
|
1.13
|
|
200
|
|
690
|
|
49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CERRO SAN
PEDRO
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RAINY
RIVER
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
processing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Open Pit
|
|
10,699
|
|
0.84
|
|
1.8
|
|
-
|
|
289
|
|
621
|
|
-
|
Underground
|
|
2,591
|
|
4.21
|
|
7.8
|
|
-
|
|
351
|
|
646
|
|
-
|
Total Direct
Processing
|
|
13,290
|
|
1.50
|
|
3.0
|
|
-
|
|
640
|
|
1,267
|
|
-
|
Stockpile
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Open Pit
|
|
9,876
|
|
0.36
|
|
1.1
|
|
-
|
|
113
|
|
339
|
|
-
|
Total Rainy River
Inferred
|
|
23,166
|
|
1.01
|
|
2.2
|
|
-
|
|
753
|
|
1,606
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BLACKWATER
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
processing
|
|
10,378
|
|
0.80
|
|
3.7
|
|
-
|
|
266
|
|
1,235
|
|
-
|
Stockpile
|
|
2,493
|
|
0.33
|
|
3.1
|
|
-
|
|
27
|
|
248
|
|
-
|
Total Blackwater
Inferred
|
|
12,871
|
|
0.71
|
|
3.6
|
|
-
|
|
293
|
|
1,483
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPOOSE
|
|
23,591
|
|
0.44
|
|
26.3
|
|
-
|
|
334
|
|
19,948
|
|
-
|
Total
Inferred
|
|
|
|
|
|
|
|
|
|
1,844
|
|
24,399
|
|
194
|
EL MORRO MINERAL RESERVES AND RESOURCES
The table below sets out the Mineral Reserve and Mineral
Resource estimates, on a 100% basis, for the El Morro project, as
well as New Gold's 4% stream interest. The El Morro project,
together with the Relincho project in Chile, is now held by a 50/50 joint venture
between Goldcorp and Teck Resources Limited. The following
information is based on information available to the Company as of
February 17, 2016.
El Morro Property
Mineral Reserves & Resources as at December 31, 2015
(Goldcorp 50% - Teck 50% Joint Venture)
|
|
|
Metal
grade
|
|
Contained
metal
|
|
New Gold Interest
(4%)
|
|
|
Tonnes
000s
|
|
Gold
g/t
|
|
Copper
%
|
|
Gold
Koz
|
|
Copper
Mlbs
|
|
Gold
Koz
|
Mineral
Reserves
|
|
|
|
|
|
|
|
|
|
|
|
|
Proven
|
|
321,814
|
|
0.56
|
|
0.55
|
|
5,820
|
|
3,877
|
|
233
|
Probable
|
|
277,240
|
|
0.35
|
|
0.43
|
|
3,097
|
|
2,626
|
|
124
|
Total
P&P
|
|
599,054
|
|
0.46
|
|
0.49
|
|
8,917
|
|
6,503
|
|
357
|
Mineral
Resources
|
|
|
|
|
|
|
|
|
|
|
|
|
Measured
|
|
19,790
|
|
0.53
|
|
0.51
|
|
340
|
|
223
|
|
14
|
Indicated
|
|
72,563
|
|
0.38
|
|
0.39
|
|
880
|
|
630
|
|
35
|
Total
M&I
|
|
92,353
|
|
0.41
|
|
0.42
|
|
1,220
|
|
853
|
|
49
|
Inferred
|
|
678,066
|
|
0.30
|
|
0.35
|
|
6,453
|
|
5,190
|
|
258
|
NOTES TO MINERAL RESERVE AND RESOURCE ESTIMATES
1. New Gold's Mineral Reserves and the El Morro Mineral
Reserves and Resources have been estimated in accordance with the
Canadian Institute of Mining, Metallurgy and Petroleum ("CIM")
Definition Standards for Mineral Resources and Mineral Reserves,
which are incorporated by reference in National Instrument 43-101
("NI 43-101").
2. Year-end 2015 Mineral Reserves and Mineral Resources
have been estimated based on the following metal prices and foreign
exchange rate criteria:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold
($/oz)
|
|
Silver
($/oz)
|
|
Copper
($/lb)
|
|
CAD/USD
|
|
AUD/USD
|
|
MXN/USD
|
Mineral
Reserves
|
|
$1,200
|
|
$15.00
|
|
$2.75
|
|
$1.25
|
|
$1.35
|
|
$17.00
|
Mineral
Resources
|
|
$1,300
|
|
$17.00
|
|
$3.00
|
|
$1.25
|
|
$1.35
|
|
$17.00
|
Lower cut-offs for the company's Mineral Reserves and Mineral
Resources are outlined in the following table:
|
|
|
|
|
|
|
Mineral
Property
|
|
Reserves
|
|
Resources
|
|
Lower
Cut-Off
|
|
Lower
Cut-Off
|
New Afton
|
|
Main Zone – B1
Block:
|
|
C$ 21.00/t
|
|
All Resources:
0.40% CuEq
|
|
|
Main Zone – B2
Block:
|
|
C$ 33.00/t
|
|
|
|
B3 Block &
C-Zone:
|
|
C$ 24.00/t
|
|
Mesquite
|
|
Oxide &
Transitional:
|
|
0.21 g/t Au (0.006
oz/t Au)
|
|
0.12 g/t Au (0.0035
oz/t Au)
|
|
|
Sulphide:
|
|
0.41 g/t Au (0.012
oz/t Au)
|
|
0.24 g/t Au (0.007
oz/t Au)
|
Peak Mines
|
|
All ore
types:
|
|
A$ 110/t to A$
156/t
|
|
A$ 113/t to A$
150/t
|
Cerro San
Pedro
|
|
All ore
types:
|
|
US$ 6.00/t
|
|
NA
|
Rainy
River
|
|
O/P direct
processing:
|
|
0.30 – 0.60 g/t
AuEq
|
|
0.30 – 0.45 g/t
AuEq
|
|
|
O/P
stockpile:
|
|
0.30 g/t
AuEq
|
|
0.30 g/t
AuEq
|
|
|
U/G direct
processing:
|
|
3.50 g/t
AuEg
|
|
2.50 g/t
AuEq
|
Blackwater
|
|
O/P direct
processing:
|
|
0.26 – 0.38 g/t
AuEq
|
|
All Resources:
0.40% AuEq
|
3. Year-End 2015 El Morro Mineral Reserves and
Mineral Resources have been estimated using $1,200/oz gold, US$2.75/lb copper, and 550 Chilean Pesos to one
United States dollar, and a lower
cut-off of 0.20% CuEq.
4. 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. Numbers
may not add due to rounding.
5. Mineral resources are classified as Measured,
Indicated and Inferred based on relative levels of confidence in
their estimation and on technical and economic parameters
consistent with the methods 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 the
appropriate mineral processing method and expected payable metal
recoveries, and the designators 'direct processing' and stockpile'
have been applied to differentiate between material envisioned to
be mined and processed directly and material to be mined and stored
in a stockpile for future processing. Mineral Reserves and Mineral
Resources may be materially affected by environmental, permitting,
legal, title, taxation, sociopolitical, marketing and other risks
and relevant issues. Additional details regarding Mineral Reserve
and Mineral Resource estimation, classification, reporting
parameters, key assumptions and associated risks for each of New
Gold's material properties are provided in the respective NI 43-101
Technical Reports which are available at www.sedar.com.
6. Rainy River Project: In addition to the criteria
described above, Mineral Reserves and Mineral Resources for the
Rainy River project are reported according to the following
additional criteria: Underground mineral reserves are reported
peripheral to and/or below the open pit mineral reserve pit shell
which has been designed and optimized based on an $800/oz gold price. Underground Mineral Resources
are reported below a larger mineral resource pit shell which has
been defined based on a $1300/oz gold
price. Approximately 44% of the gold metal content defined as
underground mineral reserves derives from material located between
the mineral reserve pit shell and the mineral resource pit shell;
the remaining 56% of mineral reserves derives from material located
below the mineral resource pit shell. Open pit mineral
resources exclude material reported as underground mineral
reserves.
7. All Mineral Resource and Mineral Reserve estimates
for New Gold's properties and projects and for the El Morro project
are effective December 31, 2015.
8. 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.
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, the statements under the headings "2015
Year-End Mineral Reserves and Resources and 2016 Exploration
Plans", "2016 Guidance", and "Detailed Mineral Reserve and Resource
Tables" and 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
and other expenditures; mineral reserve and mineral resource
estimates; planned activities for 2016 and beyond at the Company's
operations and projects, as well as planned exploration activities
and expenses; the expected production, costs, economics and
operating parameters of the Rainy River project and the New Afton
C-zone; targeting timing for development, first production and
other activities related to the Rainy River project; plans to
advance the C-zone project, including permitting capital
expenditures; expected production and sequencing for the Blackwater
project; and statements with respect to the payment of the
remaining $75 million from
Royal Gold.
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 mineral
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 the Rainy River
and Blackwater projects 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, New Afton C-zone and
Blackwater projects being realized; (10) in the case of
all-in sustaining cost outlooks at the Rainy River Project and
Blackwater Project, the assumed exchange rate being C$1.25/US$; and (11) conditions to the payment of
the remaining $75 million from
Royal Gold being satisfied
mid-2016.
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 and Mexico; discrepancies between actual and
estimated production, between actual and estimated mineral reserves
and mineral resources and between actual and estimated
metallurgical recoveries; changes in national and local government
legislation in Canada,
the United States, Australia and Mexico or any other country in which New Gold
currently or may in the future carry on business; taxation;
controls, regulations and political or economic developments in the
countries in which New Gold does or may carry on business; the
speculative nature of mineral exploration and development,
including the risks of obtaining and maintaining the validity
and enforceability of the necessary licenses and permits and
complying with the permitting requirements of each jurisdiction in
which New Gold operates, including, but not limited to: in
Canada, obtaining the necessary
permits for the Rainy River, New Afton C-zone and Blackwater
projects; and in Mexico, where
Cerro San Pedro has a history of ongoing legal challenges related
to our environmental authorization; 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, New Afton C-zone and
Blackwater; 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;
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. 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 mineral
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 or
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" as defined under National Instrument 43-101.
For additional technical information on New Gold's material
properties, including a detailed breakdown of Mineral Reserves and
Mineral Resources by category, as well as key assumptions,
parameters and risks, refer to New Gold's Annual Information Form
for the year ended December 31,
2014.
NON-GAAP MEASURES
(1) ALL-IN SUSTAINING COSTS
"All-in sustaining costs" per ounce is a non-GAAP financial
measure. Consistent with guidance announced in 2013 by the World
Gold Council, an association of various gold mining companies from
around the world 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 assists analysts, investors and other
stakeholders of the company in assessing the company's operating
performance, its ability to generate free cash flow from current
operations and its overall value. This data is furnished to provide
additional information and is a non-GAAP financial measure. All-in
sustaining costs presented do not have a standardized meaning under
IFRS and may not be comparable to similar measures presented by
other mining companies. It should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with IFRS and is not necessarily indicative of cash flow from
operations under IFRS or operating costs presented under IFRS.
Further details regarding historical all-in sustaining costs and a
reconciliation to the nearest IFRS measures are provided below and
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 is a non-GAAP financial measure which
is 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 below and in the MD&A
accompanying New Gold's financial statements filed from time to
time on www.sedar.com.
TOTAL CASH COSTS
AND ALL-IN SUSTAINING COSTS RECONCILIATION
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31
|
|
Year ended December
31
|
(in millions of
U.S. dollars, unless otherwise noted)
|
|
2015
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
Operating expenses
from continuing operations
|
|
$116.6
|
$123.1
|
|
$419.7
|
|
$411.1
|
Treatment and
refining charges on concentrate sales
|
|
8.9
|
8.8
|
|
32.9
|
|
34.5
|
Adjustments
|
|
(11.3)
|
(8.7)
|
|
(9.5)
|
|
(8.1)
|
Total cash costs
before by-product revenue
|
|
114.2
|
123.2
|
|
443.1
|
|
437.5
|
By-product copper and
silver sales
|
|
(62.4)
|
(80.0)
|
|
(253.0)
|
|
(321.8)
|
Total cash costs net
of by-product revenue
|
|
51.8
|
43.2
|
|
190.1
|
|
115.7
|
Gold ounces
sold
|
|
133,005
|
104,223
|
|
428,852
|
|
371,179
|
Total cash costs per
gold ounce sold ($/ounce)
|
|
$389
|
$414
|
|
$443
|
|
$312
|
Total cash costs per
gold ounce sold on a co-product basis
($/ounce)
|
|
$580
|
$695
|
|
$661
|
|
$675
|
Total cash costs net
of by-product revenue
|
|
51.8
|
43.2
|
|
190.1
|
|
115.7
|
Sustaining capital
expenditure
|
|
21.4
|
35.4
|
|
119.1
|
|
126.0
|
Sustaining
exploration - expensed & capitalized
|
|
1.7
|
1.5
|
|
6.3
|
|
10.2
|
Corporate G&A
including share-based compensation
|
|
5.2
|
6.6
|
|
26.7
|
|
32.1
|
Reclamation
expenses
|
|
1.5
|
1.4
|
|
4.7
|
|
5.4
|
Total all-in
sustaining costs
|
|
81.5
|
88.1
|
|
346.9
|
|
289.2
|
All-in sustaining
costs per gold ounce sold ($/ounce)
|
|
$613
|
$845
|
|
$809
|
|
$779
|
All-in sustaining
costs per gold ounce sold on a co-product
basis($/ounce)
|
|
$737
|
$957
|
|
$903
|
|
$952
|
(3) NET CASH GENERATED FROM OPERATIONS BEFORE CHANGES IN WORKING
CAPITAL
"Net cash generated from operations before changes in working
capital" and "Net cash generated from operations before changes in
working capital per share" are non-GAAP financial measures with no
standard meaning under IFRS, which exclude changes in non-cash
operating working capital. Management uses this measure to evaluate
the Company's ability to generate cash from its operations before
temporary working capital changes.
NET CASH GENERATED
FROM OPERATIONS BEFORE CHANGES IN WORKING CAPITAL
RECONCILIATION
|
|
|
|
|
|
|
|
|
Three months ended
December 31
|
|
Year ended December
31
|
(in millions of
U.S. dollars)
|
2015
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
Cash generated from
operations
|
$84.9
|
$69.9
|
|
$262.6
|
|
$268.8
|
|
Add back (deduct):
Change in non-cash operating working capital
|
(8.4)
|
(0.1)
|
|
2.4
|
|
41.6
|
Net cash generated
from operations before changes in non-cash
working capital
|
76.5
|
69.8
|
|
265.0
|
|
310.4
|
(4) ADJUSTED NET (LOSS)/EARNINGS
"Adjusted net (loss)/earnings" and "adjusted net (loss)/earnings
per share" are non-GAAP financial measures. Net (loss)/earnings
have been adjusted and tax affected for the group of costs in
"Other gains and losses" on the condensed consolidated income
statement. The adjusted entries are also impacted for tax to the
extent that the underlying entries are impacted for tax in the
unadjusted net (loss)/earnings from continuing operations. The
company uses this measure for its own internal purposes.
Management's internal budgets and forecasts and public guidance do
not reflect fair value changes on senior notes and non-hedged
derivatives, foreign currency translation and fair value through
profit or loss and financial asset gains/losses.
Consequently, the presentation of adjusted net earnings and
adjusted net earnings per share enables investors and analysts to
better understand the underlying operating performance of our core
mining business through the eyes of management. Management
periodically evaluates the components of adjusted net earnings and
adjusted net earnings per share based on an internal assessment of
performance measures that are useful for evaluating the operating
performance of our business and a review of the non-GAAP measures
used by mining industry analysts and other mining companies.
Adjusted net (loss)/earnings and adjusted net (loss)/earnings per
share are intended to provide additional information only and do
not have any standardized meaning under IFRS and may not be
comparable to similar measures presented by other companies. They
should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS. The
measures are not necessarily indicative of operating profit or cash
flows from operations as determined under IFRS.
ADJUSTED NET
EARNINGS RECONCILIATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31
|
|
Year ended December
31
|
(in millions of
U.S. dollars, except per share amounts)
|
|
2015
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
Net (loss) earnings
before taxes
|
|
($40.3)
|
($420.5)
|
|
($308.3)
|
|
($409.5)
|
|
Loss on disposal of
assets
|
|
0.0
|
0.0
|
|
180.3
|
|
0.0
|
|
Other loss on
disposal of assets
|
|
4.1
|
1.9
|
|
4.8
|
|
1.7
|
|
Realized and
unrealized gain on non-hedged derivatives
|
|
(4.4)
|
(4.1)
|
|
(14.2)
|
|
(8.5)
|
|
Loss on foreign
exchange
|
|
25.6
|
21.4
|
|
98.2
|
|
47.5
|
|
Other
|
|
(2.9)
|
(0.7)
|
|
2.1
|
|
(0.7)
|
|
Loss on hedge
monetization over original term of hedge
|
|
0.0
|
6.8
|
|
0.0
|
|
27.3
|
|
Provision for office
consolidation
|
|
0.0
|
0.0
|
|
3.0
|
|
0.0
|
|
Unrealized gain on
gold stream obligation
|
|
(9.4)
|
0.0
|
|
(6.2)
|
|
0.0
|
|
Asset
impairment
|
|
20.1
|
395.8
|
|
20.1
|
|
395.8
|
|
Inventory
write-down
|
|
12.5
|
10.5
|
|
12.5
|
|
10.5
|
Adjusted net earnings
(loss) before tax
|
|
5.4
|
11.1
|
|
(7.7)
|
|
64.1
|
|
Income tax
expense
|
|
30.8
|
(11.4)
|
|
106.9
|
|
(67.6)
|
|
Income tax
adjustments
|
|
(33.6)
|
13.7
|
|
(110.1)
|
|
48.7
|
Adjusted income tax
expense
|
|
(2.8)
|
2.3
|
|
(3.2)
|
|
(18.9)
|
Adjusted net earnings
(loss)
|
|
2.6
|
13.4
|
|
(10.9)
|
|
45.2
|
Adjusted earnings
(loss) per share (basic)
|
|
0.01
|
0.03
|
|
(0.02)
|
|
0.09
|
Adjusted effective
tax rate
|
|
52%
|
21%
|
|
41%
|
|
30%
|
(5) OPERATING MARGIN
"Operating margin" is a non-GAAP financial measure with no standard
meaning under IFRS, which management uses to evaluate the Company's
aggregated and mine-by-mine contribution to net earnings before
non-cash depreciation and depletion charges.
OPERATING MARGIN
RECONCILIATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31
|
|
Year ended December
31
|
(in millions of
U.S. dollars)
|
|
2015
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
Revenues
|
|
$199.0
|
$188.1
|
|
$712.9
|
|
$726.0
|
Less: Operating
expenses
|
|
(116.4)
|
(123.1)
|
|
(419.6)
|
|
(411.1)
|
Operating
margin
|
|
82.6
|
65.0
|
|
293.3
|
|
314.9
|
(6) 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.
CONDENSED
CONSOLIDATED INCOME STATEMENTS (unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December
|
|
Year ended December
31
|
(in millions of
U.S. dollars, except per share amounts)
|
|
2015
|
2014
|
|
2015
|
|
2014
|
Revenues
|
|
199.0
|
188.1
|
|
712.9
|
|
726.0
|
Operating
expenses
|
|
116.4
|
123.1
|
|
419.6
|
|
411.1
|
Depreciation and
depletion
|
|
74.1
|
59.6
|
|
240.7
|
|
217.6
|
Earnings from mine
operations
|
|
8.5
|
5.4
|
|
52.6
|
|
97.3
|
|
|
|
|
|
|
|
|
Corporate
administration
|
|
3.7
|
5.2
|
|
20.4
|
|
25.4
|
Provision for office
consolidation
|
|
-
|
-
|
|
3.0
|
|
-
|
Share-based payment
expenses
|
|
1.6
|
1.5
|
|
7.3
|
|
7.5
|
Asset
Impairment
|
|
20.1
|
395.8
|
|
20.1
|
|
395.8
|
Exploration and
business development
|
|
1.7
|
(0.6)
|
|
6.5
|
|
11.8
|
(Loss) earning from
operations
|
|
(18.6)
|
(396.5)
|
|
(4.7)
|
|
(343.2)
|
|
|
|
|
|
|
|
|
Finance
income
|
|
0.4
|
0.1
|
|
1.4
|
|
1.1
|
Finance
costs
|
|
(7.1)
|
(4.9)
|
|
(38.5)
|
|
(26.7)
|
Other
(losses)
|
|
(15.0)
|
(19.2)
|
|
(266.5)
|
|
(40.7)
|
|
|
|
|
|
|
|
|
(Loss) earning before
taxes
|
|
(40.3)
|
(420.5)
|
|
(308.3)
|
|
(409.5)
|
Income tax recovery
(expense)
|
|
30.8
|
(11.4)
|
|
106.9
|
|
(67.6)
|
Net
(loss)
|
|
(9.5)
|
(431.9)
|
|
(201.4)
|
|
(477.1)
|
|
|
|
|
|
|
|
|
(Loss) earnings per
share
|
|
|
|
|
|
|
|
Basic
|
|
(0.02)
|
(0.86)
|
|
(0.40)
|
|
(0.95)
|
Diluted
|
|
(0.02)
|
(0.86)
|
|
(0.40)
|
|
(0.95)
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding
(in millions)
|
|
|
|
|
|
|
|
Basic
|
|
509.3
|
503.9
|
|
509.0
|
|
503.9
|
Diluted
|
|
509.3
|
503.9
|
|
509.0
|
|
503.9
|
CONDENSED
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
As at December
31
|
|
As at December
31
|
(in millions of
U.S. dollars)
|
|
|
|
2015
|
|
2014
|
ASSETS
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
335.5
|
|
370.5
|
Trade and other
receivables
|
|
|
|
109.0
|
|
34.8
|
Inventories
|
|
|
|
145.9
|
|
187.5
|
Current income tax
receivable
|
|
|
|
19.2
|
|
31.1
|
Prepaid expenses and
other
|
|
|
|
5.0
|
|
10.6
|
Total current
assets
|
|
|
|
614.6
|
|
634.5
|
|
|
|
|
|
|
|
Non-current
inventories
|
|
|
|
115.4
|
|
66.5
|
Mining
interests
|
|
|
|
2,803.2
|
|
3,008.7
|
Deferred tax
assets
|
|
|
|
138.9
|
|
168.3
|
Other
|
|
|
|
3.4
|
|
3.8
|
Total
assets
|
|
|
|
3,675.5
|
|
3,881.8
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Trade and other
payables
|
|
|
|
141.1
|
|
97.0
|
Current income tax
payable
|
|
|
|
6.2
|
|
7.9
|
Total current
liabilities
|
|
|
|
147.3
|
|
104.9
|
|
|
|
|
|
|
|
Reclamation and
closure cost obligations
|
|
|
|
67.5
|
|
63.5
|
Provisions
|
|
|
|
9.2
|
|
9.4
|
Gold Stream
Obligation
|
|
|
|
147.6
|
|
-
|
Derivative
liabilities
|
|
|
|
2.1
|
|
16.9
|
Long-term
debt
|
|
|
|
787.6
|
|
874.3
|
Deferred tax
liabilities
|
|
|
|
414.4
|
|
494.9
|
Deferred
benefit
|
|
|
|
-
|
|
46.3
|
Other
|
|
|
|
0.2
|
|
0.4
|
Total
liabilities
|
|
|
|
1,575.9
|
|
1,610.6
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
Common
shares
|
|
|
|
2,841.0
|
|
2,820.9
|
Contributed
surplus
|
|
|
|
102.3
|
|
96.7
|
Other
reserves
|
|
|
|
2.6
|
|
(1.5)
|
Deficit
|
|
|
|
(846.3)
|
|
(644.9)
|
Total
equity
|
|
|
|
2,099.6
|
|
2,271.2
|
Total liabilities
and equity
|
|
|
|
3,675.5
|
|
3,881.8
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW (unaudited)
|
|
|
Three months ended
December 31
|
|
Year ended December
31
|
(in millions of
U.S. dollars)
|
2015
|
2014
|
|
2015
|
|
2014
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
Net loss
|
(9.5)
|
(431.9)
|
|
(201.4)
|
|
(477.1)
|
Adjustments
for:
|
|
|
|
|
|
|
Realized losses on
gold contracts
|
-
|
6.8
|
|
-
|
|
27.3
|
Foreign exchange
(gains) losses
|
25.6
|
21.4
|
|
98.2
|
|
47.5
|
Reclamation and
closure costs paid
|
(0.1)
|
(0.5)
|
|
(0.5)
|
|
(1.4)
|
Impairment of
Assets
|
20.1
|
395.8
|
|
20.1
|
|
395.8
|
Loss on disposal of
El Morro
|
(1.7)
|
-
|
|
180.3
|
|
-
|
Depreciation and
depletion
|
74.8
|
60.3
|
|
241.4
|
|
218.1
|
Other non-cash
adjustments
|
(1.8)
|
(0.3)
|
|
(5.3)
|
|
3.0
|
Income tax (recovery)
expense
|
(30.8)
|
11.4
|
|
(106.9)
|
|
67.6
|
Finance
income
|
(0.4)
|
(0.1)
|
|
(1.4)
|
|
(1.1)
|
Finance
costs
|
7.1
|
4.9
|
|
38.5
|
|
26.7
|
Unrealized
(gain)/loss on gold stream liability
|
(9.4)
|
-
|
|
(6.2)
|
|
-
|
Financial instrument
transaction costs
|
(0.2)
|
-
|
|
2.4
|
|
-
|
|
73.7
|
67.8
|
|
259.2
|
|
306.4
|
Change in non-cash
operating working capital
|
8.4
|
0.1
|
|
(2.4)
|
|
(41.6)
|
Income taxes refunded
(paid)
|
2.8
|
2.0
|
|
5.8
|
|
4.0
|
Cash generated from
operations
|
84.9
|
69.9
|
|
262.6
|
|
268.8
|
INVESTING
ACTIVITIES
|
|
|
|
|
|
|
Mining
interests
|
(169.7)
|
(88.7)
|
|
(389.5)
|
|
(279.3)
|
Government grant
received
|
-
|
-
|
|
-
|
|
20.5
|
Proceeds from the
sale of assets
|
0.3
|
-
|
|
1.2
|
|
0.4
|
Proceeds from
disposal of El Morro
|
87.6
|
-
|
|
87.6
|
|
-
|
Tax on proceeds from
disposal of El Morro
|
(25.2)
|
-
|
|
(25.2)
|
|
-
|
Interest
received
|
0.4
|
0.1
|
|
1.4
|
|
0.7
|
Cash used in
investing activities
|
(106.6)
|
(88.6)
|
|
(324.5)
|
|
(257.7)
|
|
|
|
|
|
|
|
FINANCING
ACTIVITY
|
|
|
|
|
|
|
Proceeds received
from exercise of options
|
0.2
|
0.2
|
|
0.4
|
|
1.6
|
Receipt of gold
stream funds
|
-
|
-
|
|
100.0
|
|
-
|
Financing initiation
costs
|
0.2
|
-
|
|
(2.4)
|
|
(2.2)
|
Interest
paid
|
(26.2)
|
(26.1)
|
|
(52.3)
|
|
(52.3)
|
Cash generated from
financing activities
|
(25.8)
|
(25.9)
|
|
45.7
|
|
(52.9)
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH AND
CASH EQUIVALENTS
|
(1.6)
|
(1.0)
|
|
(18.8)
|
|
(2.1)
|
|
|
|
|
|
|
|
Change in cash and
cash equivalents
|
(49.1)
|
(45.6)
|
|
(35.0)
|
|
(43.9)
|
Cash and cash
equivalents, beginning of period
|
384.6
|
416.1
|
|
370.5
|
|
414.4
|
Cash and cash
equivalents, end of period
|
335.5
|
370.5
|
|
335.5
|
|
370.5
|
|
|
|
|
|
|
|
Cash and cash
equivalents are comprised of:
|
|
|
|
|
|
|
Cash
|
229.7
|
250.5
|
|
229.7
|
|
250.5
|
Short-term money
market instruments
|
105.8
|
120.0
|
|
105.8
|
|
120.0
|
|
335.5
|
370.5
|
|
335.5
|
|
370.5
|
SOURCE New Gold Inc.