(All dollar figures are in US dollars unless otherwise
indicated)
TORONTO, Oct. 27, 2016 /CNW/ - New Gold Inc. ("New Gold")
(TSX:NGD) (NYSE MKT:NGD) today announces its 2016 third quarter
results and provides an update on the construction of the company's
Rainy River project.
2016 THIRD QUARTER HIGHLIGHTS
- Gold production of 95,546 ounces and copper production of 25.5
million pounds
- All-in sustaining costs(1) decreased to $682 per ounce, including total cash
costs(2) of $350 per
ounce
- Cash generated from operations before changes in non-cash
operating working capital(3) of $89 million, a 53% increase compared to 2015
- Cash generated from operations of $90
million, a 76% increase from 2015
- Highest quarterly cash flow since the fourth quarter of
2013
- Adjusted net earnings(4) of $13 million, or $0.03 per share, relative to an adjusted net loss
of $9 million, or $0.02 per share, in 2015
- Net earnings of $5 million, or
$0.01 per share, compared to a net
loss of $158 million, or $0.31 per share, in 2015
- Rainy River construction
currently approximately 60% complete
- September 30, 2016 cash and
equivalents of $151 million
"Our operations continue to deliver very strong results," stated
Randall Oliphant, Executive
Chairman. "With the increase in the gold price and our quarterly
all-in sustaining costs of $682 per
ounce, New Gold was able to sell each ounce of gold for almost
twice what it cost us to produce it. We are on track to meet our
full-year gold production guidance and pleased to be in a position
to generate such robust margins. In addition, our Rainy River project is now 60% complete and
progressing well."
CONSOLIDATED YEAR-TO-DATE OPERATIONAL RESULTS AND 2016
GUIDANCE
Through the first nine months of 2016, New Gold produced 285,780
ounces of gold, leaving the company well positioned to meet its
full-year production guidance of 360,000 to 400,000 ounces. At the
same time, the company's consolidated copper production of 76.6
million pounds through September 30,
2016 is ahead of plan. New Gold now expects to exceed the
high end of its full-year copper production guidance of 81.0 to
93.0 million pounds by approximately 5.0 million pounds.
Consolidated full-year silver production is expected to be below
the guidance range of 1.6 to 1.8 million ounces.
For the nine-month period ended September
30, 2016, New Gold's all-in sustaining costs of $718 per ounce and total cash costs of
$346 per ounce were both well below
the prior year. The $177 per ounce
decrease in all-in sustaining costs relative to the first nine
months of 2015 was attributable to the combination of a
$118 per ounce decrease in total cash
costs, primarily driven by lower costs at the Peak Mines, and a
$59 per ounce, or $22 million, decrease in the company's
consolidated sustaining costs(1). Sustaining costs
include New Gold's cumulative sustaining capital, exploration,
general and administrative, and amortization of reclamation
expenditures.
As part of New Gold's second quarter results announcement, the
company reduced its 2016 full-year guidance for total cash costs
and all-in sustaining costs by $75
per ounce. Based on New Gold's year-to-date operating results, and
assuming current commodity prices and foreign exchange rates, the
company expects its 2016 full-year total cash costs and all-in
sustaining costs to be near the mid point of the updated ranges of
$360 to $400 per ounce and
$750 to $790 per ounce,
respectively.
"We are very proud of our 2016 operational performance," stated
David Schummer, Executive Vice
President and Chief Operating Officer. "Our team's focus on
executing on business improvement opportunities has driven strong
results, particularly at New Afton and the Peak Mines."
NEW GOLD SUMMARY
OPERATIONAL RESULTS
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Three months ended
September 30
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Nine months ended
September 30
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2016
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2015
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2016
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2015
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GOLD PRODUCTION
(thousand ounces)
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New Afton
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23.9
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27.0
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74.2
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75.3
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Mesquite
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18.8
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43.3
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71.8
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91.5
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Peak Mines
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38.0
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20.7
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88.9
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55.1
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Cerro San
Pedro
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14.9
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31.6
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50.9
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82.2
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Total Gold
Production
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95.5
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122.6
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285.8
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304.0
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Total Gold Sales
(thousand ounces)
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96.5
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115.7
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284.3
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295.8
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Average Realized Gold
Price per ounce(5)
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$1,328
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$1,117
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$1,269
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$1,174
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COPPER PRODUCTION
(million pounds)
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New Afton
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21.3
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21.4
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65.8
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60.9
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Peak Mines
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4.2
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3.2
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10.8
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10.3
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Total Copper
Production
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25.5
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24.6
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76.6
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71.1
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Total Copper Sales
(million pounds)
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24.2
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21.6
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74.6
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67.4
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Average Realized
Copper Price per pound(5)
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$2.17
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$2.23
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$2.15
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$2.52
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SILVER PRODUCTION
(million ounces)
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Cerro San
Pedro
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0.2
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0.5
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0.7
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1.1
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New Afton/Peak
Mines
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0.1
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0.1
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0.3
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0.3
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Total Silver
Production
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0.3
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0.6
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1.0
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1.4
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Total Silver Sales
(million ounces)
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0.3
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0.5
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1.0
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1.3
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Average Realized
Silver Price per ounce(5)
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$20.15
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$14.72
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$17.25
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$15.72
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TOTAL CASH
COSTS(2) ($ per ounce)
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New Afton
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($633)
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($533)
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($605)
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($769)
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Mesquite
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633
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718
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622
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800
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Peak Mines
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522
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894
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575
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941
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Cerro San
Pedro
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897
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731
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911
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852
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Total Cash
Costs(2)
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$350
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$495
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$346
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$464
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All-IN SUSTAINING
COSTS(1) ($ per ounce)
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New Afton
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($211)
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($20)
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($202)
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($203)
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Mesquite
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1,202
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892
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1,085
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1,300
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Peak Mines
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632
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1,250
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736
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1,302
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Cerro San
Pedro
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912
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749
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936
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866
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All-in Sustaining
Costs(1)
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$682
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$788
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$718
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$895
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2016 THIRD QUARTER CONSOLIDATED OPERATIONAL RESULTS
New Gold's third quarter gold production was 95,546 ounces
compared to 122,580 ounces in the prior-year quarter. New Afton's
production remained in line, while a decrease in production at
Mesquite was largely offset by higher production at the Peak Mines.
As expected, Cerro San Pedro's production decreased as the mine has
now transitioned into residual leaching. Quarterly copper
production increased by 4% to 25.5 million pounds when compared to
the third quarter of 2015. Silver production of 0.3 million ounces
was below 2015.
Consolidated third quarter all-in sustaining costs of
$682 per ounce decreased by
$106 per ounce relative to the
prior-year quarter. The decrease in all-in sustaining costs
relative to the third quarter of 2015 was attributable to a
$145 per ounce decrease in total cash
costs to $350 per ounce, which was
partially offset by a $39 per ounce
increase in the company's consolidated sustaining costs. The
decrease in total cash costs was driven by the combined benefit of
the significantly improved operating performance at the Peak Mines
and the low-cost New Afton Mine's increased gold production
weighting within New Gold's portfolio of operating mines. The
company's gross sustaining costs decreased by $2 million relative to the prior-year quarter,
however, were attributable against fewer produced gold ounces,
resulting in the $39 per ounce
increase noted above.
New Afton
Quarterly gold production of 23,864 ounces at New Afton remained
in line with the third quarter of 2015. As a result of continued
mill throughput optimization work, an 11% increase in mill
throughput helped offset a planned decrease in gold grade. New
Afton's average mill throughput during the third quarter was over
15,900 tonnes per day.
New Afton's third quarter copper production of 21.3 million
pounds remained consistent with 2015 as the increase in mill
throughput was offset by a planned decrease in copper grade, while
copper recovery remained consistent.
The $191 per ounce decrease in New
Afton's all-in sustaining costs to ($211) per ounce was attributable to a
$100 per ounce decrease in total cash
costs coupled with a $91 per ounce
decrease in the mine's sustaining costs. New Afton's third quarter
total cash costs of ($633) per ounce
benefitted from a $2 million, or
$299 per ounce, increase in
by-product revenues relative to the prior-year quarter as the
benefit of higher copper sales volumes more than offset the
decrease in the realized price. This cost benefit was only
partially offset by the increased costs associated with mining and
processing more ore relative to the prior-year quarter. New Afton's
quarterly sustaining costs were $3
million lower than the third quarter of the prior year. The
mine's operating costs, including mining, processing and general
and administrative costs, decreased to $15.58 per tonne in the third quarter relative to
$15.75 per tonne in the prior-year
quarter.
New Afton's third quarter co-product cash costs were
$552 per ounce of gold and
$0.91 per pound of copper relative to
$471 per ounce and $0.94 per pound in the prior-year quarter. The
mine's third quarter co-product all-in sustaining costs were
$719 per ounce of gold and
$1.18 per pound of copper relative to
the prior-year third quarter co-product all-in sustaining costs of
$671 per ounce and $1.33 per pound.
For the nine-month period ended September
30, 2016, New Afton's gold production of 74,219 remained
consistent when compared to the same period of the prior year.
Consistent with the third quarter, the increase in throughput
offset a planned decrease in gold grade, while gold recovery
remained constant.
Through September 30, 2016, New
Afton's copper production increased by 4.9 million pounds, or 8%,
to 65.8 million pounds when compared to the same period of the
prior year. The increase in production was driven by the combined
benefit of a 14% increase in mill throughput and a 2% increase in
copper recovery more than offsetting a 7% decrease in copper
grade.
For the nine-month period ended September
30, 2016, New Afton's all-in sustaining costs remained
consistent at ($202) per ounce
despite a $7 million, or $138 per ounce, decrease in by-product revenues
relative to the first nine months of 2015 as a result of the
decrease in the realized copper price. The mine's all-in sustaining
costs benefitted from an $11 million,
or $163 per ounce, decrease in
sustaining costs when compared to the same period of the prior
year.
New Afton's co-product cash costs in the first nine months of
2016 were $526 per ounce of gold and
$0.90 per pound of copper relative to
$476 per ounce and $1.01 per pound in the prior-year period. The
mine's co-product all-in sustaining costs of $685 per ounce of gold and $1.17 per pound of copper compared to
$682 per ounce and $1.44 per pound in the same period of the prior
year.
Based on New Afton's operating performance in the first nine
months of 2016, the mine is positioned to meet its full-year gold
production guidance of 90,000 to 100,000 ounces with copper
production expected to be towards the high end of the guidance
range of 75.0 to 85.0 million pounds. As a result of the strong
copper production, coupled with the copper price continuing to be
higher than the company's $2.00 per
pound assumption, New Afton's full-year costs are expected to be
below the guidance ranges of ($335) to
($295) per ounce for total cash costs and $95 to $135 per ounce for all-in sustaining
costs.
Mesquite
Third quarter gold production at Mesquite was 18,835 ounces
relative to 43,291 ounces in the prior-year quarter. Mesquite's
quarterly production was impacted as mining activities were
significantly more focused on waste stripping than in the third
quarter of 2015. As a result, ore tonnes placed on the leach pad
were over 50% below the prior-year quarter, which was only
partially offset by higher grade material being mined. In addition
to the overall decrease in ore tonnes mined and placed, production
was impacted as a higher percentage of the ore tonnes mined and
placed during the third quarter were from a transition zone,
located between the oxide and non-oxide zones, that had lower
overall recovery. Mining at Mesquite has since moved to a different
area of the open pit and gold production in the first three weeks
of October totalled approximately 10,000 ounces.
Mesquite's third quarter all-in sustaining costs of $1,202 per ounce were $310 per ounce higher than the prior-year quarter
primarily as a result of a $4
million, or $395 per ounce,
increase in sustaining costs resulting from the combined impact of
increased capitalized waste stripping and lower gold sales. Total
cash costs during the quarter decreased by $85 per ounce relative to the third quarter of
2015 despite the lower gold sales as a higher portion of Mesquite's
mining costs were added to leach pad inventory when compared to the
prior-year quarter.
For the nine-month period ended September
30, 2016, Mesquite's gold production was 71,770 ounces
relative to 91,479 ounces in the prior-year period. Mesquite's
production in the first nine months of 2016 was primarily impacted
by the lower recoveries associated with the transition material as
the decrease in ore tonnes mined and placed on the leach pad was
offset by higher gold grade.
Mesquite's all-in sustaining costs in the first nine months of
2016 were $1,085 per ounce relative
to $1,300 per ounce in the same
period of the prior year. The decrease in all-in sustaining costs
was attributable to a $178 per ounce
decrease in total cash costs to $622
per ounce coupled with a $10 million,
or $37 per ounce, decrease in
sustaining costs.
Though the fourth quarter is scheduled to be Mesquite's
strongest production quarter of the year, the mine's full-year gold
production is expected to be approximately 15,000 ounces below the
guidance range of 130,000 to 140,000 ounces. As a result of the
lower production, Mesquite's full-year total cash costs are
expected to be above the guidance range of $590 to $630 per ounce, while all-in sustaining
costs should be slightly below the guidance range of $1,015 to $1,055 per ounce due to lower than
planned capitalized waste stripping.
Peak Mines
Third quarter gold production at the Peak Mines of 37,981 ounces
increased by 83% relative to the prior-year quarter and represented
the highest quarterly production since the company's 2009 merger.
The significant increase in gold production was attributable to the
combination of a 27% increase in tonnes processed and a 33%
increase in gold grade. Peak continues to outperform, with the
increase in gold production relative to the company's plans
approximately 70% attributable to increased ore tonnes mined and
processed, stemming from improved mine sequencing, with the
remaining 30% a result of positive grade reconciliation.
Quarterly copper production of 4.2 million pounds increased by
31% relative to the third quarter of 2015 due to the positive
impact of higher throughput coupled with higher copper
recovery.
All-in sustaining costs at the Peak Mines decreased by
$618 per ounce to $632 per ounce relative to the prior-year
quarter. The decrease in all-in sustaining costs was a result of a
$372 per ounce decrease in total cash
costs to $522 per ounce coupled with
a $3 million, or $246 per ounce, decrease in sustaining costs. As
the Peak Mines' gross operating costs remained largely consistent,
the decrease in total cash costs was primarily attributable to the
increase in gold production.
For the nine-month period ended September
30, 2016, gold production at the Peak Mines increased by 61%
to 88,862 ounces relative to the prior-year period. The increase in
gold production in the first nine months of 2016 was driven by an
increase in mill throughput, gold grade and recovery. As previously
disclosed, the prior-year period was impacted by underground
geotechnical challenges that temporarily limited access to higher
grade ore.
Copper production of 10.8 million pounds increased by 5% when
compared to the same period of the prior year.
All-in sustaining costs at the Peak Mines in the first nine
months of 2016 decreased by $566 per
ounce to $736 per ounce. The decrease
in all-in sustaining costs was attributable to the combination of a
$366 per ounce decrease in total cash
costs and a $6 million, or
$200 per ounce, decrease in
sustaining costs. The decrease in total cash costs relative to the
first nine months of 2015 was driven by the increase in production,
which more than offset the impact of by-product revenues decreasing
by $1 million, or $188 per ounce, due to the lower copper
price.
As a result of the Peak Mines' very strong operating performance
in the first nine months of 2016, the operation has already
achieved its full-year gold production guidance of 80,000 to 90,000
ounces of gold and exceeded its copper production guidance of 6.0
to 8.0 million pounds with a full quarter left in the year. For the
year, gold production is expected to be 10,000 to 15,000 ounces
above the guidance range, while copper production should be
approximately 5.0 million pounds above the guidance range. Driven
by the mine's strong operating performance, as well as the copper
price continuing to be above the company's $2.00 per pound assumption, the Peak Mines' total
cash costs and all-in sustaining costs are expected to be well
below their respective guidance ranges of $800 to $840 per ounce and $1,020 to $1,060 per ounce.
Cerro San Pedro
As previously announced, Cerro San Pedro finished active mining
late in the second quarter of 2016 and has now transitioned into
residual leaching. As a result, and consistent with expectations,
the mine's third quarter gold production decreased to 14,866
ounces. Cerro San Pedro's third quarter silver production was 0.2
million ounces.
Cerro San Pedro's third quarter all-in sustaining costs of
$912 per ounce increased relative to
the prior-year quarter, driven by a $166 per ounce increase in total cash costs to
$897 per ounce. The increase in total
cash costs was attributable to higher cost inventory ounces coming
off the leach pad as well as the lower gold production.
For the nine-month period ended September
30, 2016, consistent with the company's expectations, gold
production at Cerro San Pedro decreased to 50,929 ounces as the
operation concluded active mining and transitioned to residual
leaching.
Silver production of 0.7 million ounces through the first nine
months of 2016 was below the same period of the prior year.
All-in sustaining costs at Cerro San Pedro in the first nine
months of 2016 were $911 per ounce
relative to $852 per ounce in the
same period of the prior year. Consistent with the third quarter,
the increase was due to higher cost inventory ounces coming off the
leach pad as well as the lower gold production.
Cerro San Pedro's full-year gold production is on target to be
within the guidance range of 60,000 to 70,000 ounces, while silver
production is expected to be below the guidance range of 1.3 to 1.5
million ounces. Cerro San Pedro's total cash costs and all-in
sustaining costs are expected to be slightly above their respective
guidance ranges of $755 to $795 per
ounce and $765 to $805 per ounce,
primarily as a result of lower silver by-product revenues.
FINANCIAL RESULTS
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Three months ended
September 30
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Nine months ended
September 30
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(in millions of
U.S. dollars, except per share amounts)
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2016
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2015
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2016
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2015
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Revenues
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$178.7
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$177.3
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$513.5
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$513.9
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Operating
margin(6)
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94.2
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71.9
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262.4
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210.7
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Adjusted net
earnings/(loss)(4)
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13.4
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(8.5)
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26.7
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(13.9)
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Adjusted net
earnings/(loss) per share(4)
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0.03
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(0.02)
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0.05
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(0.03)
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Net
earnings/(loss)
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5.1
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(157.8)
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22.8
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(191.9)
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Net earnings/(loss)
per share
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0.01
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(0.31)
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0.04
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(0.38)
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Cash generated from
operations before changes in non-
cash operating working capital(3)
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88.6
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58.4
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233.3
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188.5
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Cash generated from
operations
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89.6
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51.0
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230.5
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177.7
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Third quarter revenues of $179
million remained consistent with 2015 as an increase in gold
and silver prices as well as copper sales volumes offset a decrease
in gold and silver sales volumes and copper prices. Relative to the
third quarter of 2015, the average realized price increased by
$211 per ounce of gold, or 19%, and
$5.43 per ounce of silver, or 37%,
while the average realized price of copper decreased by
$0.06 per pound, or 3%.
The company's third quarter operating margin(6)
increased by $22 million, or 31%,
relative to 2015 due to a $21 million
decrease in the company's quarterly operating expenses. The
decrease in operating expenses was primarily attributable to the
planned conclusion of mining activity at Cerro San Pedro.
New Gold had adjusted net earnings of $13
million, or $0.03 per share,
in the third quarter of 2016 relative to an adjusted net loss of
$9 million, or $0.02 per share, in the prior-year quarter. The
increase relative to the prior-year quarter was attributable to the
increase in operating margin noted above and a $9 million decrease in finance costs, which was
only partially offset by a $7
million increase in depreciation and depletion expense. The
decrease in finance costs was driven by a greater portion of the
company's interest expense being capitalized against Rainy River.
The company reported net earnings of $5
million, or $0.01 per share,
in the third quarter relative to a net loss of $158 million, or $0.31 per share, in the prior-year quarter. The
reported net loss in the prior-year quarter included a non-cash
$100 million after-tax loss
associated with the sale of the company's 30% interest in El Morro
as well as a $41 million pre-tax
foreign exchange loss. Third quarter net earnings included the
impact of a $10 million pre-tax
foreign exchange loss and a $9
million non-cash pre-tax loss on the revaluation of the
company's gold stream obligation, the impact of which was only
partially offset by a $3 million
non-cash pre-tax gain on the revaluation of New Gold's gold price
option contracts.
New Gold's third quarter cash generated from operations before
changes in non-cash operating working capital increased by
$30 million, or 53%, to $89 million. The increase relative to the third
quarter of 2015 was primarily attributable to the company's lower
operating expenses and lower corporate administration, exploration
and business development expenses. The company's cash generated
from operations in the third quarter increased by $39 million, or 77%, to $90 million.
For the nine-month period ended September
30, 2016, revenues of $514
million remained consistent with the same period of the
prior year as higher copper sales volumes and higher realized gold
and silver prices offset a decrease in gold sales volumes and the
realized copper price.
Driven by a $52 million decrease
in operating expenses, primarily resulting from the planned
slowdown of mining activities at Cerro San Pedro, New Gold's
operating margin in the first nine months of 2016 increased by 25%
to $262 million.
New Gold had adjusted net earnings of $27
million, or $0.05 per share,
in the first nine months of 2016 relative to an adjusted net loss
of $14 million, or $0.03 per share, in the prior-year period. The
$41 million, or $0.08 per share, improvement in earnings was
attributable to the increase in operating margin and a $23 million decrease in finance costs, which were
only partially offset by a $21
million increase in depreciation and depletion expense and
an increase in accounting income tax expense.
The company reported net earnings of $23
million, or $0.04 per share,
in the first nine months of 2016 relative to a net loss of
$192 million, or $0.38 per share, in the prior-year period. The
2015 period included a non-cash $100
million after-tax loss associated with the company's sale of
El Morro. In addition, the change relative to the prior year was
primarily due to non-cash foreign exchange movements where the
first nine months of 2016 included a $19
million pre-tax foreign exchange gain while the prior-year
period included a $73 million pre-tax
foreign exchange loss. The 2016 foreign exchange gain was offset by
a non-cash pre-tax loss of $34
million on the revaluation of the company's gold stream
obligation.
For the nine-month period ended September
30, 2016, New Gold's cash generated from operations before
changes in non-cash operating working capital increased by
$45 million, or 24%, to $233 million. The increase relative to 2015 was
primarily attributable to the decrease in the company's operating
expenses. The company's cash generated from operations in the first
nine months of 2016 increased by $53
million, or 30%, to $231
million.
FINANCIAL UPDATE
New Gold's cash and cash equivalents as at September 30, 2016 were $151 million. As previously disclosed, in early
October, the company increased the size of its revolving credit
facility from $300 million to
$400 million. As at September 30, 2016, $124
million of the facility was used to issue letters of credit
for closure obligations at the company's producing mines and
development projects, with the balance remaining undrawn. In
addition, the remaining $75 million
of the stream deposit is to be received from RGLD Gold AG, a
wholly-owned subsidiary of Royal Gold Inc., when 60% of the
estimated Rainy River project
development capital has been spent and other customary conditions
have been satisfied, which is expected to be late in the fourth
quarter of 2016. Combining the September 30,
2016 cash balance, the undrawn facility and the stream
receivable provides the company with pro forma liquidity of
approximately $500 million.
At September 30, 2016, the face
value of the company's long-term debt was $800 million (book value – $789 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 513 million shares outstanding.
PROJECTS UPDATE
RAINY RIVER
Development activity at New Gold's Rainy River project, located in northwestern
Ontario, continued to advance
during the third quarter and through October. On October 4, 2016, in a news release entitled
New Gold Provides Rainy River Project Update and Further
Increases Financial Flexibility, the company provided a
comprehensive update on Rainy
River's development progress through the end of September 2016. As such, the update below focuses
on the advancement of the project through late October.
RAINY RIVER – PROJECT
UPDATES THROUGH LATE OCTOBER
2016
- Overall construction progress approximately 60% complete
- Concrete placement, steelwork erection and cladding all
substantially complete
- Installation of mechanical, piping, electrical and
instrumentation in processing facilities over 30% complete
- Construction complete on two of five dams in water management
facility
- Over 16 million tonnes of overburden and waste stripping
completed to date
- Currently mining at a rate of approximately 85,000 tonnes per
day
- No Lost Time Incidents since New Gold acquired the project in
2013
Mining activities at Rainy
River continue to accelerate. Through late October, the
company had mined over 16 million tonnes of overburden and waste,
simultaneously delivering construction rock to other parts of the
project and preparing the open pit for the start of production. The
operating team continues to mine at a rate of approximately 85,000
tonnes per day and is scheduled to increase the daily mining rate
in November with the commissioning of an additional shovel and
three more haul trucks, as well as continued productivity
improvements. The daily mining rate should steadily increase to
over 145,000 tonnes per day in early 2017. New Gold is targeting
the pre-stripping of 45 to 50 million tonnes of overburden and
waste by the start of production at Rainy
River in mid-2017.
As the construction of all of the structural components of the
process facilities is largely complete, the team is now setting
mechanical equipment, and installing piping, electrical and
instrumentation services. The concrete foundations for the primary
crusher are complete and the installation of the crusher and ore
conveyor are both advancing well. The SAG and ball mill shells are
in place and power feeds have been completed from the substation to
the SAG and ball mill transformers. The pre-leach thickener tank is
complete and the leach tanks are over 95% complete and on schedule
for completion in the coming weeks. The installation of mechanical
equipment, and piping, electrical and instrumentation
services across the process facilities is currently over 30%
complete.
After receiving approval from the Ontario Ministry of Natural
Resources and Forestry ("MNRF") in mid-August, New Gold restarted
construction of the water management facility. Currently, two of
the five water management dams have been completed, with work on
the remaining three on schedule for completion in November 2016.
After incorporating the results of the company's supplemental
geotechnical drilling program and receiving additional input from
New Gold's Independent Tailings Review Board ("ITRB"), in late
August, New Gold submitted the final redesign of the Rainy River
tailings management facility for approval by the MNRF. On
October 27th, New Gold and
the MNRF had a technical review meeting regarding the proposed
redesign. The MNRF requested additional analysis to support the
design under certain conditions, specifically an earthquake
occurring. The company anticipates that it should receive approval
to recommence construction of the tailings management facility in
the fourth quarter of 2016.
The company also continues to work closely with Environment and
Climate Change Canada towards obtaining a Schedule 2 amendment,
required to close certain creeks and deposit tailings, which is
targeted to be received in mid-2017. However, New Gold's redesign
of the tailings management facility incorporated a starter dam
within the broader facility in order to ensure that the targeted
mid-2017 project start-up is not dependent on obtaining a Schedule
2 amendment from the Federal government. Based on its location and
scale, the starter dam would provide capacity for approximately six
months of mine waste and does not require a Schedule 2 amendment.
The inclusion of a starter dam is an approach that has been used at
other Canadian mining operations.
Project capital expenditures at Rainy
River during the third quarter totalled $131 million, bringing the total project
development capital spending through September 30, 2016 to $632
million. Capital spending in October
2016 is expected to be approximately $50 million. Based on a C$1.30/US$ exchange rate, the remaining capital
cost from November 1, 2016 through
the targeted mid-2017 production start is estimated to be
approximately $365 million, including
$50 million of contingency.
Overall, the Rainy River project enhances New Gold's growth
pipeline through its significant production scale at below current
industry average costs and exciting longer-term exploration
potential in a great mining jurisdiction. 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,
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 continuing the advancement
of the Rainy River project.
BLACKWATER
Activities at the company's Blackwater project, located in
south-central British Columbia,
continued to focus on attaining the approval of the Environmental
Assessment ("EA"). The coordinated Federal and Provincial EA
technical review continues to progress. New Gold has responded to
the comments received from the Federal government, Provincial
agencies and local Indigenous communities. The company continues to
anticipate approval of the Blackwater EA by mid-2017. In addition
to advancing the EA process, New Gold has been evaluating various
opportunities to further optimize the Blackwater project.
Capital expenditures at Blackwater during the third quarter and
first nine months of 2016 were $3
million and $7 million,
respectively.
EL MORRO PROPERTY – 4% GOLD STREAM
As part of New Gold's 2015 sale of its 30% interest in the El
Morro property to Goldcorp Inc. ("Goldcorp"), the company retained
a 4% stream on future gold production from El Morro. The El Morro
property forms part of Goldcorp and Teck Resources Limited's
NuevaUnión project (formerly Project Corridor). A pre-feasibility
study for NuevaUnión is expected to commence in the fourth quarter
of 2016 and should be completed in mid-2017. Work has commenced on
an Environmental Impact Assessment baseline study.
As at the end of 2015, 4% of the El Morro mineral reserves
represented 357,000 ounces of gold. For a detailed breakdown of
mineral reserves by category, as well as key assumptions,
parameters and risks, refer to New Gold's Annual Information Form
for the year ended December 31, 2015
filed on www.sedar.com.
WEBCAST AND CONFERENCE CALL
A webcast and conference call to discuss these results will be
held on Friday, October 28, 2016
beginning at 9:30 a.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
November 28, 2016 by calling toll
free 1-855-859-2056, or 1-416-849-0833 outside of the U.S. and
Canada, passcode 98460914. An
archived webcast will also be available until January 28, 2017 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.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain information contained in this news release, including
any information relating to New Gold's future financial or
operating performance are "forward looking". All statements in this
news release, other than statements of historical fact, which
address events, results, outcomes or developments that New Gold
expects to occur are "forward-looking statements". Forward-looking
statements are statements that are not historical facts and are
generally, but not always, identified by the use of forward-looking
terminology such as "plans", "expects", "is expected", "budget",
"scheduled", "targeted", "estimates", "forecasts", "intends",
"anticipates", "projects", "potential", "believes" or variations of
such words and phrases or statements that certain actions, events
or results "may", "could", "would", "should", "might" or "will be
taken", "occur" or "be achieved" or the negative connotation of
such terms. Forward-looking statements in this news release
include, among others, statements with respect to: guidance for
production, total cash costs and all-in sustaining costs, and the
factors contributing to those expected results, as well as expected
capital and other expenditures; planned activities for 2016 and
beyond at the company's projects; planned preparations for
operations at the Rainy River project, including the mining rate,
removal of overburden and waste and storage of water prior to
commissioning; the expected production, costs, economics, grade and
other operating parameters of the Rainy River project; the capacity
of the starter dam; the expected production, costs, economics and
operating parameters of the Rainy River project; the capacity of
the starter dam; targeted timing for permits; targeted timing for
commissioning, start-up and production; targeting timing for
development and other activities related to the Rainy River
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 Indigenous
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 study for
the Rainy River project being realized; (10) in the case of
all-in sustaining cost outlooks at the Rainy River 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 later in
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 the
Rainy River, New Afton C-zone and Blackwater projects; 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 Indigenous
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.
TECHNICAL INFORMATION
The scientific and technical information relating to the
construction of New Gold's Rainy
River project contained herein has been reviewed and
approved by Peter Marshall, Vice
President, Project Development of New Gold. The scientific
and technical information relating to the expected operations at
Rainy River has been reviewed and
approved by Grant Goddard, General
Manager, Rainy River project, and
employee of New Gold. The scientific and technical information
relating to mineral resources and exploration contained herein has
been reviewed and approved by Mark A.
Petersen, Vice President, Exploration of New Gold. Mr.
Marshall is a Professional Engineer and a member of the Association
of Professional Engineers and Geoscientists of British Columbia. Mr. Goddard is a licensed
Professional Engineer with Professional Engineers of Ontario. Mr. Petersen is a SME Registered
Member, AIPG Certified Professional Geologist. Mr. Marshall, Mr.
Goddard and Mr. Petersen are "Qualified Persons" for the purposes
of NI 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, 2015
filed on www.sedar.com.
NON-GAAP MEASURES
(1) ALL-IN SUSTAINING COSTS AND 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.
"Sustaining costs" is a non-GAAP financial measure. New Gold
defines sustaining costs as the difference between all-in
sustaining costs and total cash costs, being the sum of net 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.
Management uses sustaining costs to understand the aggregate net
result of the drivers of all-in sustaining costs other than total
cash costs. The line items between cash costs and all in
sustaining costs in the tables below break down the components of
sustaining costs. Sustaining costs is intended to provide
additional information only and does not have any 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.
(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
September 30
|
|
Nine months ended
September 30
|
(in millions of
U.S. dollars, unless otherwise noted)
|
2016
|
2015
|
|
2016
|
2015
|
|
|
|
|
|
|
Operating
expenses
|
$84.5
|
$105.4
|
|
$251.1
|
$303.2
|
Treatment and
refining charges on concentrate sales
|
3.6
|
8.1
|
|
10.9
|
24.0
|
Adjustments
|
-
|
(0.1)
|
|
(0.2)
|
0.6
|
Total cash costs
before by-product revenue
|
88.0
|
113.4
|
|
261.8
|
327.8
|
By-product copper and
silver sales
|
(54.2)
|
(56.1)
|
|
(163.5)
|
(190.6)
|
Total cash costs net
of by-product revenue
|
33.8
|
57.3
|
|
98.3
|
137.2
|
Gold ounces
sold
|
96,452
|
115,695
|
|
284,303
|
295,847
|
Total cash costs per
gold ounce sold ($/ounce)
|
350
|
495
|
|
346
|
464
|
Total cash costs per
gold ounce sold on a co-product basis ($/ounce)
|
640
|
662
|
|
630
|
693
|
Total cash costs net
of by-product revenue
|
33.8
|
57.3
|
|
98.3
|
137.2
|
Sustaining capital
expenditure
|
21.7
|
25.0
|
|
71.2
|
99.9
|
Sustaining
exploration - expensed
|
2.2
|
0.9
|
|
6.4
|
2.5
|
Corporate G&A
including share-based compensation
|
6.9
|
6.8
|
|
24.3
|
21.9
|
Reclamation
expenses
|
1.4
|
1.2
|
|
3.8
|
3.2
|
Total all-in
sustaining costs
|
66.1
|
91.2
|
|
204.2
|
264.7
|
All-in sustaining
costs per gold ounce sold ($/ounce)
|
682
|
788
|
|
718
|
895
|
All-in sustaining
costs per gold ounce sold on a co-product basis
($/ounce)
|
868
|
867
|
|
879
|
972
|
|
|
|
|
|
|
(3) CASH GENERATED FROM OPERATIONS BEFORE CHANGES IN WORKING
CAPITAL
"Cash generated from operations before changes in working capital"
is a 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.
CASH GENERATED
FROM OPERATIONS BEFORE CHANGES IN WORKING CAPITAL
RECONCILIATION
|
|
|
|
|
|
Three months ended
September 30
|
|
Nine months ended
September 30
|
(in millions of
U.S. dollars)
|
2016
|
2015
|
|
2016
|
2015
|
|
|
|
|
|
|
Cash generated from
operations
|
89.6
|
51.0
|
|
230.5
|
177.7
|
|
Add back (deduct):
Change in non-cash operating working capital
|
(1.0)
|
7.4
|
|
2.8
|
10.8
|
Cash generated from
operations before changes in non-cash working capital
|
88.6
|
58.4
|
|
233.3
|
188.5
|
|
|
|
|
|
|
(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
September 30
|
|
Nine months ended
September 30
|
(in millions of
U.S. dollars, except per share amounts)
|
2016
|
2015
|
|
2016
|
2015
|
|
|
|
|
|
|
Net (loss) earnings
before taxes
|
$0.9
|
($241.6)
|
|
$19.0
|
($268.0)
|
|
Other losses
(gains)
|
15.8
|
230.7
|
|
16.8
|
251.5
|
|
Provision for office
consolidation
|
-
|
3.0
|
|
-
|
3.0
|
Adjusted net earnings
(loss) before tax
|
16.7
|
(7.9)
|
|
35.8
|
(13.5)
|
|
Income tax
expense
|
4.2
|
83.8
|
|
3.8
|
76.1
|
|
Income tax
adjustments
|
(7.5)
|
(84.4)
|
|
(12.9)
|
(76.5)
|
Adjusted income tax
(expense) recovery
|
(3.3)
|
(0.6)
|
|
(9.1)
|
(0.4)
|
Adjusted net earnings
(loss)
|
13.4
|
(8.5)
|
|
26.7
|
(13.9)
|
Adjusted earnings
(loss) per share (basic)
|
0.03
|
(0.02)
|
|
0.05
|
(0.03)
|
Adjusted effective
tax rate
|
20%
|
7%
|
|
25%
|
3%
|
|
|
|
|
|
|
(5) 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 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.
(6) 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
September 30
|
|
Nine months ended
September 30
|
(in millions of
U.S. dollars)
|
2016
|
2015
|
|
2016
|
2015
|
|
|
|
|
|
|
Revenues
|
178.7
|
177.3
|
|
513.5
|
513.9
|
Less: Operating
expenses
|
(84.5)
|
(105.4)
|
|
(251.1)
|
(303.2)
|
Operating
margin
|
94.2
|
71.9
|
|
262.4
|
210.7
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED INCOME STATEMENTS (unaudited)
|
|
|
|
|
|
|
Three months ended
September 30
|
Nine months
ended September 30
|
(in millions of
U.S. dollars, except per share amounts)
|
2016
|
2015
|
2016
|
2015
|
Revenues
|
178.7
|
177.3
|
513.5
|
513.9
|
Operating
expenses
|
84.5
|
105.4
|
251.1
|
303.2
|
Depreciation and
depletion
|
68.0
|
60.8
|
187.9
|
166.6
|
Earnings from mine
operations
|
26.2
|
11.1
|
74.5
|
44.1
|
|
|
|
|
|
Corporate
administration
|
4.9
|
5.2
|
16.5
|
16.7
|
Provision for office
consolidation
|
-
|
3.0
|
-
|
3.0
|
Share-based payment
expenses
|
2.0
|
1.7
|
7.8
|
5.7
|
Exploration and
business development
|
1.6
|
2.5
|
6.2
|
4.8
|
Earnings (loss) from
operations
|
17.7
|
(1.3)
|
44.0
|
13.9
|
|
|
|
|
|
Finance
income
|
0.2
|
0.4
|
0.7
|
1.0
|
Finance
costs
|
(1.2)
|
(10.0)
|
(8.9)
|
(31.4)
|
Other (losses)
gains
|
(15.8)
|
(230.7)
|
(16.8)
|
(251.5)
|
|
|
|
|
|
Earning (loss) before
taxes
|
0.9
|
(241.6)
|
19.0
|
(268.0)
|
Income tax
recovery
|
4.2
|
83.8
|
3.8
|
76.1
|
Net earnings
(loss)
|
5.1
|
(157.8)
|
22.8
|
(191.9)
|
|
|
|
|
|
Earnings (loss) per
share
|
|
|
|
|
Basic
|
0.01
|
(0.31)
|
0.04
|
(0.38)
|
Diluted
|
0.01
|
(0.31)
|
0.04
|
(0.38)
|
|
|
|
|
|
Weighted average
number of shares outstanding (in
millions)
|
|
|
|
|
Basic
|
513.0
|
509.1
|
511.3
|
508.9
|
Diluted
|
515.8
|
509.1
|
513.1
|
508.9
|
CONDENSED
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(unaudited)
|
|
|
|
|
As at September
30
|
As at December
31
|
(in millions of
U.S. dollars)
|
2016
|
2015
|
ASSETS
|
|
|
Current
assets
|
|
|
Cash and cash
equivalents
|
151.2
|
335.5
|
Trade and other
receivables
|
99.7
|
109.0
|
Inventories
|
154.5
|
145.9
|
Current income tax
receivable
|
9.9
|
19.2
|
Prepaid expenses and
other
|
7.1
|
5.0
|
Total current
assets
|
422.4
|
614.6
|
|
|
|
Non-current
inventories
|
131.6
|
115.4
|
Mining
interests
|
3,079.2
|
2,803.2
|
Deferred tax
assets
|
195.5
|
138.9
|
Other
|
2.8
|
3.4
|
Total
assets
|
3,831.5
|
3,675.5
|
LIABILITIES AND
EQUITY
|
|
|
Current
liabilities
|
|
|
Trade and other
payables
|
168.0
|
141.1
|
Current income tax
payable
|
12.2
|
6.2
|
Total current
liabilities
|
180.2
|
147.3
|
|
|
|
Reclamation and
closure cost obligations
|
76.6
|
67.5
|
Gold stream
obligation
|
233.8
|
147.6
|
Provisions
|
15.3
|
9.2
|
Derivative
liabilities
|
2.9
|
2.1
|
Long-term
debt
|
789.0
|
787.6
|
Deferred tax
liabilities
|
421.8
|
414.4
|
Other
|
0.2
|
0.2
|
Total
liabilities
|
1,719.8
|
1,575.9
|
|
|
|
Equity
|
|
|
Common
shares
|
2,856.4
|
2,841.0
|
Contributed
surplus
|
101.4
|
102.3
|
Other
reserves
|
(22.6)
|
2.6
|
Deficit
|
(823.5)
|
(846.3)
|
Total
equity
|
2,111.7
|
2,099.6
|
Total liabilities
and equity
|
3,831.5
|
3,675.5
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW (unaudited)
|
|
|
|
|
|
|
Three months ended
September 30
|
Nine months ended
September 30
|
(in millions of
U.S. dollars)
|
2016
|
2015
|
2016
|
2015
|
OPERATING
ACTIVITIES
|
|
|
|
|
Net earnings
(loss)
|
5.1
|
(157.8)
|
22.8
|
(191.9)
|
Adjustments
for:
|
|
|
|
|
Foreign exchange
losses (gains)
|
10.3
|
40.8
|
(18.7)
|
72.6
|
Reclamation and
closure costs paid
|
(0.4)
|
(0.2)
|
(1.3)
|
(0.4)
|
Depreciation and
depletion
|
67.4
|
60.9
|
187.9
|
166.4
|
Impairment loss on
reclassification of asset as held for sale
|
-
|
182.0
|
-
|
182.0
|
Other non-cash
adjustments
|
0.8
|
1.9
|
5.6
|
(3.3)
|
Income tax
recovery
|
(4.2)
|
(83.8)
|
(3.8)
|
(76.1)
|
Finance
income
|
(0.2)
|
(0.4)
|
(0.7)
|
(1.0)
|
Finance
costs
|
1.2
|
10.0
|
8.9
|
31.4
|
Financial instrument
transaction costs
|
-
|
2.6
|
-
|
2.6
|
Unrealized loss on
gold stream liability
|
8.9
|
3.2
|
34.4
|
3.2
|
|
88.9
|
59.2
|
235.1
|
185.5
|
Change in non-cash
operating working capital
|
1.0
|
(7.4)
|
(2.8)
|
(10.8)
|
Income taxes (paid)
refunded
|
(0.3)
|
(0.8)
|
(1.8)
|
3.0
|
Cash generated from
operations
|
89.6
|
51.0
|
230.5
|
177.7
|
INVESTING
ACTIVITIES
|
|
|
|
|
Mining
interests
|
(156.6)
|
(76.7)
|
(402.2)
|
(219.8)
|
Gold price option
contract investment costs
|
(1.0)
|
-
|
(3.1)
|
-
|
Proceeds from the
sale of assets
|
-
|
0.1
|
0.9
|
0.9
|
Interest
received
|
0.1
|
0.4
|
0.6
|
1.0
|
Cash used by
investing activities
|
(157.5)
|
(76.2)
|
(403.8)
|
(217.9)
|
|
|
|
|
|
FINANCING
ACTIVITY
|
|
|
|
|
Proceeds received
from exercise of options and warrants
|
1.3
|
0.1
|
8.5
|
0.2
|
Gold stream agreement
deposit
|
-
|
100.0
|
-
|
100.0
|
Financing initiation
costs
|
-
|
(2.6)
|
(0.3)
|
(2.6)
|
Interest
paid
|
(0.8)
|
-
|
(28.3)
|
(26.1)
|
Cash generated (used
by) financing activities
|
0.5
|
97.5
|
(20.1)
|
71.5
|
Effect of exchange
rate changes on cash and cash equivalents
|
(0.9)
|
(14.5)
|
9.1
|
(17.2)
|
|
|
|
|
|
Change in cash and
cash equivalents
|
(68.3)
|
57.8
|
(184.3)
|
14.1
|
Cash and cash
equivalents, beginning of period
|
219.5
|
326.8
|
335.5
|
370.5
|
Cash and cash
equivalents, end of period
|
151.2
|
384.6
|
151.2
|
384.6
|
|
|
|
|
|
Cash and cash
equivalents are comprised of:
|
|
|
|
|
Cash
|
105.0
|
272.6
|
105.0
|
272.6
|
Short-term money
market instruments
|
46.2
|
112.0
|
46.2
|
112.0
|
|
151.2
|
384.6
|
151.2
|
384.6
|
SOURCE New Gold Inc.