Provides Notice of Release of Third Quarter
Financial Results
(All amounts are in U.S. dollars unless
otherwise indicated)
TORONTO, Oct. 13, 2021 /CNW/ - New Gold Inc. ("New
Gold" or the "Company") (TSX: NGD) (NYSE American:
NGD) reports third quarter operational results for the
Company as of September 30, 2021. The
Company is also providing notice that it will release its third
quarter 2021 financial results before market on Friday, November 12, 2021. A conference call and
webcast will follow at 8:30 am Eastern
Time (details are provided at the end of this news
release).
"The third quarter had its challenges, particularly as
Rainy River addressed the grade
reconciliation issues experienced in July and August", stated
Renaud Adams, President & CEO.
"Rainy River's third quarter gold
grade was up 10% compared to the first half, and with lower
contribution expected from the East Lobe in the fourth quarter
compared to the third quarter, we should see a step-up in
production and a stronger finish to the year at Rainy River."
"We remain on track to deliver on our updated guidance, and
we continue to make progress towards securing the Company's future
growth at both assets. Our liquidity position improved for a third
consecutive quarter, and I continue to expect meaningful free cash
flow generation from our operations in the near-term," added Mr.
Adams.
Third Quarter Highlights
- Total production was 105,628 gold equivalent1 ("gold
eq.") ounces (72,210 ounces of gold, 226,679 ounces of silver and
15.6 million pounds of copper)
- The Rainy River Mine produced 60,785 gold eq.1
ounces (58,557 ounces of gold and 160,461 ounces of silver)
- The New Afton Mine produced 44,843 gold eq.1 ounces
(13,653 ounces of gold and 15.6 million pounds of copper)
- During the quarter, the Company provided an update to its 2021
operational outlook for the Rainy River Mine and the consolidated
operational outlook (refer to the Company's September 13, 2021 news release for further
information)
- On August 23, the Company
received the final C$50 million cash
payment from Artemis Gold Inc. as part of the divestment of the
Blackwater Project
- At the end of the quarter, the Company had a cash position of
$151 million and a strong liquidity
position of $477 million
Consolidated Operational Highlights
|
Q3
2021
|
Q3
2020
|
9M
2021
|
9M
2020
|
Gold eq. production
(ounces)1
|
105,628
|
115,536
|
307,359
|
317,050
|
Gold production
(ounces)
|
72,210
|
78,959
|
205,849
|
210,043
|
Copper production
(Mlbs)
|
15.6
|
18.2
|
47.5
|
53.6
|
Rainy River Mine
Operational Highlights
Rainy River
Mine
|
Q3
2021
|
Q3
2020
|
9M
2021
|
9M
2020
|
Gold eq. production
(ounces)1
|
60,785
|
64,221
|
172,462
|
164,960
|
Gold eq. sold
(ounces)1
|
57,800
|
61,726
|
168,682
|
163,137
|
Gold production
(ounces)
|
58,557
|
63,004
|
166,113
|
162,185
|
Gold sold
(ounces)
|
55,597
|
60,592
|
162,454
|
160,438
|
Operating Key Performance Indicators
Rainy River Mine (Open
Pit Mine only)
|
Q3
2020
|
Q4
2020
|
Q1
2021
|
Q2
2021
|
Q3
2021
|
Tonnes mined per day
(ore and waste)
|
145,701
|
158,638
|
150,767
|
158,556
|
149,630
|
Ore tonnes mined per
day
|
36,515
|
42,918
|
35,681
|
36,256
|
52,917
|
Operating waste tonnes
per day
|
62,818
|
73,921
|
65,643
|
71,124
|
88,216
|
Capitalized waste
tonnes per day
|
46,368
|
41,799
|
49,442
|
51,176
|
8,497
|
Total waste tonnes per
day
|
109,186
|
115,720
|
115,085
|
122,300
|
96,713
|
Strip ratio
(waste:ore)
|
2.99
|
2.70
|
3.23
|
3.37
|
1.83
|
Tonnes milled per
calendar day
|
26,998
|
26,999
|
26,301
|
25,349
|
25,245
|
Gold grade milled
(g/t)
|
0.88
|
0.93
|
0.80
|
0.82
|
0.89
|
Gold recovery
(%)
|
89
|
90
|
89
|
87
|
89
|
Mill availability
(%)
|
90
|
94
|
89
|
88
|
91
|
Gold production
(ounces)
|
63,004
|
66,734
|
54,656
|
52,901
|
58,557
|
Gold eq. production
(ounces)1
|
64,221
|
68,241
|
56,513
|
55,163
|
60,785
|
- Third quarter gold eq.1 production was 60,785 ounces
(58,557 ounces of gold and 160,461 ounces of silver), a decrease
compared to the prior-year period due to lower tonnes milled.
- The open pit mine achieved 149,630 tonnes per day during the
quarter, in-line with the 2021 overall target of ~151,000 tonnes
per day. Approximately 4.9 million ore tonnes and 8.9 million waste
tonnes (including 0.8 million capitalized waste tonnes) were mined
from the open pit at an average reduced strip ratio of 1.83:1. As
planned, the strip ratio is expected to remain approximately 2:1
for the remainder of the year to achieve the original 2021 guidance
of 2.7:1.
- The mill processed 25,245 tonnes per day for the quarter, a
decrease compared to the prior-year period due to maintenance
activities performed on the gyratory crusher impacting mill
throughput. The mill processed an average grade of 0.89 grams per
tonne at a gold recovery of 89%. Mill availability for the quarter
averaged 91%.
- The East Lobe represents approximately 25% of planned
production for the fourth quarter. During the fourth quarter,
mining will focus on the ODM Center and ODM North zones and the
gold grade is expected to increase in the quarter.
- Rainy River remains on-track
to meet its updated gold eq.1 production guidance range
of 240,000 to 255,000 ounces and all-in sustaining cost2
guidance range of $1,365 to
$1,440 per gold eq. ounce.
- There are currently no active cases of COVID-19 at the Rainy
River Mine. Rainy River has
implemented measures to mitigate and limit the spread of COVID-19
to protect the well-being of its employees, contractors, their
families, local communities, and other stakeholders. For more
information see: http://newgold.com/covid-19/.
New Afton Mine
Operational Highlights
New Afton
Mine
|
Q3
2021
|
Q3
2020
|
9M
2021
|
9M
2020
|
Gold eq. production
(ounces)1
|
44,843
|
51,315
|
134,898
|
152,090
|
Gold eq. sold
(ounces)1
|
39,395
|
49,179
|
124,553
|
143,094
|
Gold production
(ounces)
|
13,653
|
15,955
|
39,735
|
47,858
|
Gold sold
(ounces)
|
11,385
|
15,168
|
36,251
|
44,948
|
Copper production
(Mlbs)
|
15.6
|
18.2
|
47.5
|
53.6
|
Copper sold
(Mlbs)
|
14.0
|
17.5
|
44.2
|
50.5
|
Operating Key Performance Indicators
New Afton
Mine
|
Q3
2020
|
Q4
2020
|
Q1
2021
|
Q2
2021
|
Q3
2021
|
Tonnes mined per day
(ore and waste)
|
17,249
|
17,259
|
11,395
|
15,104
|
12,861
|
Tonnes milled per
calendar day
|
15,483
|
15,358
|
13,564
|
13,795
|
13,068
|
Gold grade milled
(g/t)
|
0.44
|
0.46
|
0.39
|
0.43
|
0.43
|
Gold recovery
(%)
|
80
|
79
|
79
|
80
|
83
|
Gold production
(ounces)
|
15,955
|
16,362
|
11,994
|
14,088
|
13,653
|
Copper grade milled
(%)
|
0.71
|
0.73
|
0.64
|
0.79
|
0.72
|
Copper recovery
(%)
|
82
|
81
|
80
|
83
|
82
|
Copper production
(Mlbs)
|
18.2
|
18.5
|
13.8
|
18.2
|
15.6
|
Mill availability
(%)
|
98
|
99
|
96
|
98
|
98
|
Gold eq. production
(ounces)1
|
51,315
|
52,326
|
39,512
|
50,542
|
44,843
|
- Third quarter gold eq.1 production was 44,843 ounces
(13,653 ounces of gold, and 15.6 million pounds of copper), a
decrease compared to the prior-year period primarily due to lower
tonnes milled.
- The underground mine averaged 12,861 tonnes per day during the
quarter as the mine focused on drawpoint rehabilitation activities
and the progressive ramp-up of the B3 zone. The mining rate is
expected to increase as more drawpoints become available and as the
B3 zone continues to ramp-up.
- The mill averaged 13,068 tonnes per day, below the prior-year
period, but in-line with mining rates and the plan to optimize
metal recoveries while processing higher grade supergene ore. The
mill processed gold grades of 0.43 grams per tonne and copper
grades of 0.72%, with gold and copper recoveries of 83% and 82%,
respectively.
- C-Zone development advanced by approximately 790 metres and the
project remains on track.
- New Afton remains on track to meet its gold eq.1
production guidance range of 165,000 to 195,000 ounces and all-in
sustaining costs2 are expected to be at the higher end
of the cost range of $1,225 to
$1,325 per gold eq. ounce.
- There are currently no active cases of COVID-19 at the New
Afton Mine. New Afton has implemented measures to mitigate and
limit the spread of COVID-19 to protect the well-being of its
employees, contractors, their families, local communities, and
other stakeholders. For more information see:
http://newgold.com/covid-19/.
Third Quarter 2021 Conference Call and Webcast
The Company will release its third quarter 2021 financial
results before market on Friday, November
12, 2021. A conference call and webcast will follow at
8:30 am Eastern Time.
- Participants may listen to the webcast by registering on our
website at www.newgold.com or via the following link
https://produceredition.webcasts.com/starthere.jsp?ei=1503407&tp_key=ffe45e2c74
- Participants may also listen to the conference call by calling
North American toll free 1-888-664-6383, or 1-416-764-8650 outside
of the U.S and Canada, passcode
50065410.
- A recorded playback of the conference call will be available
until December 12, 2021 by calling
North American toll free 1-888-390-0541, or 1-416-764-8677 outside
of the U.S. and Canada, passcode
065410. An archived webcast will also be available at
www.newgold.com.
About New Gold
New Gold is a Canadian-focused
intermediate mining Company with a portfolio of two core producing
assets in Canada, the Rainy River
gold mine and the New Afton copper-gold mine. The Company also
holds an 8% gold stream on the Artemis Gold Blackwater project
located in Canada, a 6% equity
stake in Artemis Gold Inc., and other Canadian-focused investments.
New Gold's vision is to build a leading diversified intermediate
gold company based in Canada that
is committed to environment and social responsibility. For further
information on the Company, visit www.newgold.com.
Endnotes
1.
|
Total gold eq. ounces
include silver and copper produced/sold converted to a gold eq.
based on a ratio of $1,800 per gold ounce, $25.00 per silver ounce
and $3.50 per copper pound used for 2021 guidance estimates. All
copper is produced/sold by the New Afton Mine. Gold eq. ounces for
Rainy River in Q3 2021 includes production of 160,461 ounces of
silver (158,676 ounces sold) converted to a gold eq. based on a
ratio of $1,800 per gold ounce and $25.00 per silver ounce used for
2021 guidance estimates. Gold eq. ounces for New Afton in Q3 2021
includes 15.6 million pounds of copper produced (14.0 million
pounds sold) and 66,218 ounces of silver produced 54,792 ounces of
silver sold) converted to a gold eq. based on a ratio of $1,800 per
gold ounce, 3.50 per copper pound and $25.00 per silver ounce used
for 2021 guidance estimates.
|
|
|
2.
|
"All-in sustaining
costs" is a non-GAAP financial performance measure that is used in
this news release. This measure does not have any standardized
meaning under IFRS and therefore may not be comparable to similar
measures presented by other issuers. For more information about
this measure, why it is used by the Company, and a reconciliation
to the most directly comparable measure under IFRS, see the
"Non-GAAP Financial Performance Measures" section of this news
release.
|
Non-GAAP Financial Performance Measures
All-In Sustaining Costs per Gold eq. Ounce
"All-in sustaining costs per gold equivalent ounce" is a
non-GAAP financial performance measure that does not have any
standardized meaning under IFRS and therefore may not be comparable
to similar measures presented by other issuers. New Gold calculates
"all-in sustaining costs per gold equivalent ounce" based on
guidance announced by the World Gold Council ("WGC") in
September 2013. The WGC is a
non-profit association of the world's leading gold mining companies
established in 1987 to promote the use of gold to industry,
consumers and investors. The WGC is not a regulatory body and does
not have the authority to develop accounting standards or
disclosure requirements. The WGC has worked with its member
companies to develop a measure that expands on IFRS measures to
provide visibility into the economics of a gold mining company.
Current IFRS measures used in the gold industry, such as operating
expenses, do not capture all of the expenditures incurred to
discover, develop and sustain gold production. New Gold believes
that "all-in sustaining costs per gold equivalent ounce" provides
further transparency into costs associated with producing gold and
will assist analysts, investors, and other stakeholders of the
Company in assessing its operating performance, its ability to
generate free cash flow from current operations and its overall
value. In addition, the Compensation Committee of the Board of
Directors uses "all-in sustaining costs", together with other
measures, in its Company scorecard to set incentive compensation
goals and assess performance.
"All-in sustaining costs per gold equivalent ounce" 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. The measure is not
necessarily indicative of cash flow from operations under IFRS or
operating costs presented under IFRS.
New Gold defines "all-in sustaining costs per gold equivalent
ounce" as the sum of total cash costs, net capital expenditures
that are sustaining in nature, corporate general and administrative
costs, capitalized and expensed exploration that is sustaining in
nature, lease payments that are sustaining in nature, and
environmental reclamation costs, all divided by the total gold
equivalent ounces sold to arrive at a per ounce figure. The
"Sustaining Capital Expenditure Reconciliation" table below
reconciles New Gold's sustaining capital to its cash flow
statement. The definition of sustaining versus non-sustaining
is similarly applied to capitalized and expensed exploration costs
and lease payments. Exploration costs and lease payments to develop
new operations or that relate to major projects at existing
operations where these projects are expected to materially increase
production are classified as non-sustaining and are excluded. Gold
equivalent ounces of copper and silver produced or sold in a
quarter are computed using a consistent ratio of copper and silver
prices to the gold price and multiplying this ratio by the pounds
of copper and silver ounces produced or sold during that
quarter.
Costs excluded from all-in sustaining costs are non-sustaining
capital expenditures, non-sustaining lease payments and exploration
costs, financing costs, tax expense, and transaction costs
associated with mergers, acquisitions and divestitures, and any
items that are deducted for the purposes of adjusted earnings.
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: the anticipated timing with respect to the release of its third
quarter 2021 financial results and the associated conference call
and webcast; the expected step-up in production at Rainy River in the fourth quarter; the
Company's ability to deliver updated guidance and progress towards
securing future growth at both assets; expectations regarding free
cash flow generation in the near term; the Company's expectations
with respect to the strip ratio for the remainder of the year;
planned production in the East Lobe in the fourth quarter and the
expected increase in grade; the expected increase in the mining
rate at New Afton; the Company's ability to meet its updated gold
eq. production guidance range and all-in sustaining cost guidance
range at Rainy River; the plan to
optimize metal recoveries while processing higher grade supergene
ore at New Afton; the Company's ability to meet its gold eq.
production guidance range at New Afton; and expectations regarding
all-in sustaining costs at New Afton being at the higher end of the
cost range.
All forward-looking statements in this news release are based on
the opinions and estimates of management that, while considered
reasonable as at the date of this news release in light of
management's experience and perception of current conditions and
expected developments, are inherently 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 latest annual management's discussion and
analysis ("MD&A"), its most recent annual information form and
technical reports on the Rainy River Mine and New Afton Mine filed
on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. 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 other than
as set out herein; (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 and U.S. dollar, and to a lesser extent, the Mexican Peso,
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 New Afton
Mine and Rainy River Mine 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) there being no
significant disruptions to the Company's workforce at either the
Rainy River or New Afton Mine due to cases of COVID-19 or any
required self-isolation requirements (due, among other things, to
cross-border travel to the United
States or any other country); (10) the responses of the
relevant governments to the COVID-19 outbreak being sufficient to
contain the impact of the COVID-19 outbreak; (11) there being no
material disruption to the Company's supply chains and workforce
that would interfere with the Company's anticipated course of
action at the Rainy River Mine and the systematic ramp-up of
operations; and (12) the long-term economic effects of the COVID-19
outbreak not having a material adverse impact on the Company's
operations or liquidity position.
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 and, to a lesser extent,
Mexico; volatility in the market
price of the Company's securities; hedging and investment related
risks; dependence on the Rainy River Mine and New Afton Mine;
discrepancies between actual and estimated production, between
actual and estimated mineral reserves and mineral resources and
between actual and estimated metallurgical recoveries; risks
related to early production at the Rainy River Mine, including
failure of equipment, machinery, the process circuit or other
processes to perform as designed or intended; risks related to
construction, including changing costs and timelines; adequate
infrastructure; fluctuation in treatment and refining charges;
changes in national and local government legislation in
Canada, the United States and, to a lesser extent,
Mexico or any other country in
which New Gold currently or may in the future carry on business;
global economic and financial conditions; risks relating to New
Gold's debt and liquidity; the adequacy of internal and disclosure
controls; taxation; impairment; conflicts of interest; risks
relating to climate change; 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; 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; risks relating to proposed
acquisitions and the integration thereof; information systems
security threats; diminishing quantities or grades of mineral
reserves and mineral resources; competition; loss of, or inability
to attract, key employees; rising costs of labour, supplies, fuel
and equipment; actual results of current exploration or reclamation
activities; uncertainties inherent to mining economic studies;
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; disruptions to the Company's workforce at either the
Rainy River Mine or the New Afton Mine, or both, due to cases of
COVID-19 or any required self-isolation (due to cross-border
travel, exposure to a case of COVID-19 or otherwise); the responses
of the relevant governments to the COVID-19 outbreak not being
sufficient to contain the impact of the COVID-19 outbreak;
disruptions to the Company's supply chain and workforce due to the
COVID-19 outbreak; an economic recession or downturn as a result of
the COVID-19 outbreak that materially adversely affects the
Company's operations or liquidity position; there being further
shutdowns at the Rainy River or New Afton Mines; the Company not
being able to complete its construction projects at the Rainy River
Mine or the New Afton Mines on the anticipated timeline or at all;
and the Company not being able to complete the exploration drilling
program to be launched at the Rainy River Mine and Cherry Creek on the anticipated timeline or at
all. 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 most recent annual information form,
MD&A and other disclosure documents filed on and available on
SEDAR at www.sedar.com and on EDGAR at www.sec.gov. 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 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 contained in this news
release has been reviewed and approved by Eric Vinet, Senior Vice President, Operations of
New Gold. Mr. Vinet is a Professional Engineer and member of
the Ordre des ingénieurs du Québec. He is a "Qualified Person" for
the purposes of National Instrument 43-101 – Standards of
Disclosure for Mineral Projects.
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SOURCE New Gold Inc.