On-Track to Achieve Updated Consolidated
Production and Cost Guidance
(All amounts are in U.S. dollars unless
otherwise indicated)
TORONTO, Nov. 12, 2021 /PRNewswire/ - New Gold Inc.
("New Gold" or the "Company") (TSX: NGD) (NYSE American:
NGD) reports third quarter results for the Company as of
September 30, 2021. The Company will
host a conference call and webcast today at 8:30 am Eastern Time to discuss the third quarter
consolidated results (details are provided at the end of this news
release). For detailed information, please refer to the Company's
Third Quarter Management's Discussion and Analysis (MD&A) and
Financial Statements that are available on the Company's website at
www.newgold.com and on SEDAR at www.sedar.com. The
Company uses certain non-GAAP financial performance measures
throughout this news release. Please refer to the "Non-GAAP
Financial Performance Measures" section of this news release and
the MD&A for more information.
"The Company responded well to the challenges experienced in
the third quarter, positioning us to meet our updated guidance,"
stated Renaud Adams, President &
CEO. "On a consolidated basis, all-in sustaining costs were down
over 9% compared to the first half, with Rainy River's all-in sustaining costs
improving by almost 16%. We continue to expect an improvement in
fourth quarter production from Rainy
River with lower contribution from the East Lobe."
"As we look beyond 2021, we continue to advance the B3 ramp
up and C-Zone development at New Afton and the development of the
decline towards the Intrepid underground ore zone at Rainy River. We also continue to work on an
optimized underground mine plan study at Rainy River, the results of which are expected
to be released in the first quarter of 2022 along with our annual
2022 consolidated guidance and year-end Mineral Reserve and Mineral
Resource update," added Mr. Adams.
Consolidated Third Quarter Highlights
- Total production for the quarter 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). For
the nine-month period ended September 30,
2021, production was 307,359 gold eq.1 ounces
(205,849 ounces of gold, 653,932 ounces of silver and 47.5 million
pounds of copper).
- The Company is currently on track to meet the updated annual
consolidated gold equivalent1 production guidance range
(405,000 to 450,000 ounces) and consolidated all-in sustaining
costs2 range ($1,415 to
$1,495 per gold eq. ounce) (refer
to the Company's September 13, 2021
news release for further information).
- Revenues for the quarter were $180
million.
- Operating expense for the quarter was $915 per gold eq. ounce.
- Total cash costs2 for the quarter were $966 per gold eq. ounce.
- All-in sustaining costs2 for the quarter were
$1,408 per gold eq. ounce.
- Average realized gold price2 of $1,788 per ounce and average realized copper
price2 of $4.28 per
pound.
- Net loss for the quarter was $11
million ($0.02 per
share).
- Adjusted net earnings2 for the quarter were
$23 million ($0.03 per share).
- Cash generated from operations for the quarter was $54 million ($0.08
per share). Cash generated from operations for the quarter, before
changes in non-cash operating working capital2, was
$81 million ($0.12 per share).
- At the end of the quarter, the Company had a cash position of
$151 million and a strong liquidity
position of $477 million.
Consolidated Financial Highlights
|
Q3
2021
|
Q3
2020
|
9M
2021
|
9M
2020
|
Revenue
($M)
|
179.8
|
173.7
|
542.9
|
444.5
|
Operating expenses
($M)
|
88.6
|
86.7
|
277.7
|
242.6
|
Net (loss) earnings,
per share ($)
|
(0.02)
|
0.02
|
(0.02)
|
(0.09)
|
Adj. net earnings
(loss), per share ($)2
|
0.03
|
0.02
|
0.09
|
(0.01)
|
Operating cash flow,
per share ($)
|
0.08
|
0.14
|
0.32
|
0.29
|
Adj. operating cash
flow, per share ($)2
|
0.12
|
0.12
|
0.34
|
0.27
|
- Revenues for the quarter were $180
million and $543 million for
the nine-month period ended September 30,
2021, an increase compared to the prior-year periods due to
higher gold and copper prices, partially offset by lower sales
volume.
- Operating expenses for the quarter and nine-month period ended
September 30, 2021, were higher than
the prior-year periods due to the strengthening of the Canadian
dollar relative to the U.S. dollar and the prior-year period
benefitting from the wage subsidy.
- Net loss for the quarter ended September
30, 2021, was $11 million
($0.02 per share) compared to net
earnings for the prior-year period of $16
million ($0.02 per share). The
change was primarily due to an unrealized loss on the revaluation
of investments, partially offset by lower finance costs. Net loss
for the nine-month period ended September
30, 2021, was $10 million
($0.02 per share), a decrease
compared to the prior-year period primarily due to higher revenue
and lower finance costs, partially offset by an increase in
operating expenses and an unrealized loss on the revaluation of
investments. Additionally, the prior-year period included a loss on
the sale of the Blackwater Project.
- Adjusted net earnings2 for the quarter were
$23 million ($0.03 per share) and $58
million ($0.09 per share) for
the nine-month period ended September 30,
2021, an increase compared to the prior-year periods
primarily due to higher revenue and lower finance costs.
Consolidated Operational Highlights
|
Q3
2021
|
Q3
2020
|
9M
2021
|
9M
2020
|
Gold eq. production
(ounces)1
|
105,628
|
115,536
|
307,359
|
317,050
|
Gold eq. sold
(ounces)1
|
97,196
|
110,905
|
293,235
|
306,231
|
Gold production
(ounces)
|
72,210
|
78,959
|
205,849
|
210,043
|
Gold sold
(ounces)
|
66,982
|
75,760
|
198,705
|
205,385
|
Copper production
(Mlbs)
|
15.6
|
18.2
|
47.5
|
53.6
|
Copper sold
(Mlbs)
|
14.0
|
17.5
|
44.2
|
50.5
|
Average realized gold
price, per ounce2
|
1,788
|
1,613
|
1,798
|
1,532
|
Average realized
copper price, per pound2
|
4.28
|
2.99
|
4.20
|
2.69
|
Operating expenses,
per gold eq. ounce
|
915
|
778
|
947
|
791
|
Total cash costs, per
gold eq. ounce2
|
966
|
822
|
1,001
|
839
|
Depreciation and
depletion, per gold eq. ounce
|
497
|
452
|
496
|
469
|
All-in sustaining
costs, per gold eq. ounce2
|
1,408
|
1,313
|
1,503
|
1,349
|
Sustaining capital
and sustaining leases ($M)2
|
34.9
|
46.1
|
122.4
|
136.3
|
Growth capital
($M)2
|
23.1
|
16.4
|
74.8
|
46.6
|
Rainy River
Operational Highlights
Rainy River
Mine
|
Q3
2021
|
Q3
2020
|
9M
2021
|
9M
2020
|
Gold eq. production
(ounces)1
|
60,785
|
64,221
|
172,462
|
164,960
|
Gold eq. sold
(ounces)1
|
57,800
|
61,726
|
168,682
|
163,137
|
Gold production
(ounces)
|
58,557
|
63,004
|
166,113
|
162,185
|
Gold sold
(ounces)
|
55,597
|
60,592
|
162,454
|
160,438
|
Average realized gold
price, per ounce2
|
1,788
|
1,615
|
1,797
|
1,533
|
Operating expenses,
per gold eq. ounce
|
960
|
833
|
979
|
924
|
Total cash costs, per
gold eq. ounce2
|
960
|
833
|
979
|
924
|
Depreciation and
depletion, per gold eq. ounce
|
635
|
602
|
647
|
634
|
All-in sustaining
costs, per gold eq. ounce2
|
1,307
|
1,469
|
1,470
|
1,592
|
Sustaining capital
and sustaining leases ($M)2
|
17.6
|
37.4
|
76.9
|
103.9
|
Growth capital
($M)2
|
4.3
|
0.1
|
9.3
|
0.3
|
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. For
the nine-month period ended September 30,
2021, gold eq.1 production was 172,462 ounces
(166,113 ounces of gold and 457,069 ounces of silver), an increase
over the prior-year period due to higher tonnes processed, with the
prior-year period including a two-week voluntary shutdown due to
COVID-19.
- Operating expense and total cash costs2 were
$960 per gold eq. ounce for the
quarter, an increase over the prior-year period due to lower sales
volumes, the strengthening of the Canadian dollar relative to the
U.S. dollar, and the prior-year period benefitting from the wage
subsidy. The strengthening of the Canadian dollar and the loss of
the wage subsidy increased costs by approximately $90 per gold eq. ounce in the quarter. For the
nine-month period ended September 30,
2021, operating expense and total cash costs2
were $979 per gold eq. ounce, an
increase over the prior-year period due to the strengthening of the
Canadian dollar relative to the U.S. dollar, and the receipt of the
wage subsidy in the prior-year period.
- Sustaining capital and sustaining lease2 payments
for the quarter were $18 million,
including $2 million of capitalized
mining costs. Sustaining capital spend during the quarter primarily
included the advancement of the annual tailings dam raise. For the
nine-month period ended September 30,
2021, sustaining capital and sustaining lease2
payments were $77 million, including
$29 million of capitalized mining
costs.
- All-in sustaining costs2 were $1,307 per gold eq. ounce for the quarter, a
decrease over the prior-year period primarily due to lower
sustaining capital spend, partially offset by lower sales volumes
and higher total cash costs. For the nine-month period ended
September 30, 2021, all-in sustaining
costs2 were $1,470 per
gold eq. ounce, a decrease over the prior-year period primarily due
to higher sales volumes and lower sustaining capital spend.
- Growth capital2 for the quarter was $4 million and $9
million for the nine-month period ended September 30, 2021, related to the development of
the Intrepid underground ore zone. During the quarter, development
of the decline towards the Intrepid underground ore zone advanced
215 metres.
- 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 approximately 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%.
- 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
|
Average realized gold
price, per ounce2
|
1,789
|
1,606
|
1,803
|
1,529
|
Average realized
copper price, per pound2
|
4.28
|
2.99
|
4.20
|
2.69
|
Operating expenses,
per gold eq. ounce
|
849
|
708
|
904
|
640
|
Total cash costs, per
gold eq. ounce2
|
974
|
807
|
1,030
|
742
|
Depreciation and
depletion, per gold eq. ounce
|
288
|
255
|
285
|
272
|
All-in sustaining
costs, per gold eq. ounce2
|
1,423
|
988
|
1,403
|
971
|
Sustaining capital
and sustaining leases ($M)2
|
17.4
|
8.7
|
45.1
|
32.0
|
Growth capital
($M)2
|
18.8
|
16.1
|
65.5
|
37.2
|
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. For the nine-month period ended September 30, 2021, gold eq.1
production was 134,898 ounces (39,735 ounces of gold and 47.5
million pounds of copper), a decrease over the prior-year period
primarily due to lower tonnes processed.
- Operating expense and total cash costs2 were
$849 and $974 per gold eq. ounce for the quarter, an
increase over the prior-year period due to lower sales volumes, the
strengthening of the Canadian dollar relative to the U.S. dollar,
and the prior-year period benefitting from the wage subsidy. The
strengthening of the Canadian dollar and the loss of the wage
subsidy increased costs by approximately $70 per gold eq. ounce in the quarter. For the
nine-month period ended September 30,
2021, operating expense and total cash costs2
were $904 and $1,030 per gold eq. ounce, an increase over the
prior-year period due to lower sales volumes, the strengthening of
the Canadian dollar relative to the U.S. dollar, and the receipt of
the wage subsidy in the prior-year period.
- Sustaining capital and sustaining lease2 payments
for the quarter were $17 million,
primarily related to B3 mine development and the advancement of the
planned tailings dam raise. For the nine-month period ended
September 30, 2021, sustaining
capital and sustaining lease2 payments were $45 million.
- All-in sustaining costs2 were $1,423 per gold eq. ounce for the quarter and
$1,403 per gold eq. ounce for the
nine-month period ended September 30,
2021. The increases over the prior-year periods were due to
lower sales volumes, higher total cash costs and higher sustaining
capital spend.
- Growth capital2 was $19
million for the quarter, and $66
million for the nine-month period ended September 30, 2021, primarily related to C-Zone
development and the thickened and amended tailings project.
- C-Zone development advanced by approximately 790 metres in the
quarter and continues to advance on plan.
- The underground mine averaged 12,861 tonnes per day during the
quarter as the mine focused on recovery level 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.
- There is currently one active case 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/.
Sustainability and ESG
New Gold has four sustainability focus areas: Indigenous
Peoples, Tailings Management, Water and Climate. New Gold has
adapted its sustainability efforts to align with the most pressing
ESG issues facing the Company and the mining industry. As such, our
ESG approach continues to prioritize the health, safety, and
well-being of our people and the people in the communities in which
we operate. The protection of our people is central to our success
as we believe people are our greatest asset. New Gold is committed
to providing training, opportunities, and progression paths for our
teams, and we actively seek to ensure that we promote diversity
within our teams at all levels of the organization. We have adopted
an approach to execute on our sustainability strategy that aligns
with ESG reporting standards.
Third Quarter 2021 Conference Call and Webcast
The Company will host a webcast and conference call today at
8:30 am Eastern Time to discuss the
Company's third quarter consolidated results.
- 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 5% 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.
|
"Total cash costs",
"all-in sustaining costs", "adjusted net earnings/(loss)",
"sustaining capital and sustaining leases", "growth capital", "cash
generated from operations", and "average realized gold/copper price
per ounce/pound" are all non-GAAP financial performance measures
that are used in this press release. These measures do not have any
standardized meaning under IFRS and therefore may not be comparable
to similar measures presented by other issuers. For more
information about these measures, why they are 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
Total Cash Costs per Gold eq. Ounce
"Total cash costs per gold equivalent ounce" is a non-GAAP
financial performance measure that is a common financial
performance measure in the gold mining industry but does not have
any standardized meaning under IFRS and therefore may not be
comparable to similar measures presented by other issuers. New Gold
reports total cash costs on a sales basis and not on a production
basis. The Company believes that, in addition to conventional
measures prepared in accordance with IFRS, this measure, along with
sales, is a key indicator of the Company's ability to generate
operating earnings and cash flow from its mining operations. This
measure allows investors to better evaluate corporate performance
and the Company's ability to generate liquidity through operating
cash flow to fund future capital exploration and working capital
needs.
This measure is intended to provide additional information only
and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS. This
measure is not necessarily indicative of cash generated from
operations under IFRS or operating costs presented under IFRS.
Total cash cost figures are calculated in accordance with a
standard developed by The Gold Institute, a worldwide association
of suppliers of gold and gold products that ceased operations in
2002. Adoption of the standard is voluntary and the cost measures
presented may not be comparable to other similarly titled measures
of other companies. Total cash costs include mine site operating
costs such as mining, processing and administration costs,
royalties, and production taxes, but are exclusive of amortization,
reclamation, capital and exploration costs. Total cash costs are
then divided by gold equivalent ounces sold to arrive at the total
cash costs per equivalent ounce sold.
In addition to gold, the Company produces copper and silver.
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.
Notwithstanding the impact of copper and silver sales, as the
Company is focused on gold production, New Gold aims to assess the
economic results of its operations in relation to gold, which is
the primary driver of New Gold's business. New Gold believes this
metric is of interest to its investors, who invest in the Company
primarily as a gold mining business. To determine the relevant
costs associated with gold equivalent ounces, New Gold believes it
is appropriate to reflect all operating costs incurred in its
operations.
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 Human Resources and 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.
Sustaining Capital and Sustaining Leases
"Sustaining capital" and "sustaining lease" are non-GAAP
financial performance measures that do not have any standardized
meaning under IFRS and therefore may not be comparable to similar
measures presented by other issuers. New Gold defines "sustaining
capital" as net capital expenditures that are intended to maintain
operation of its gold producing assets. Similarly, a "sustaining
lease" is a lease payment that is sustaining in nature. To
determine "sustaining capital" expenditures, New Gold uses cash
flow related to mining interests from its statement of cash flows
and deducts any expenditures that are capital expenditures to
develop new operations or capital expenditures related to major
projects at existing operations where these projects will
materially increase production. Management uses "sustaining
capital" and "sustaining lease", to understand the aggregate net
result of the drivers of all-in sustaining costs other than total
cash costs. These measures are intended to provide additional
information only and should not be considered in isolation or as
substitutes for measures of performance prepared in accordance with
IFRS.
Growth Capital
"Growth capital" 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 considers non-sustaining capital costs to
be "growth capital", which are capital expenditures to develop new
operations or capital expenditures related to major projects at
existing operations where these projects will materially increase
production. To determine "growth capital" expenditures, New Gold
uses cash flow related to mining interests from its statement of
cash flows and deducts any expenditures that are capital
expenditures that are intended to maintain operation of its gold
producing assets. Management uses "growth capital" to understand
the cost to develop new operations or related to major projects at
existing operations where these projects will materially increase
production. This measure is intended to provide additional
information only and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS.
The following tables reconcile the above non-GAAP measures to
the most directly comparable IFRS measure on an aggregate
basis.
Consolidated OPEX, Cash Cost and All-in Sustaining Costs
Reconciliation
|
Three months ended
September 30
|
Nine months ended
September 30
|
(in millions of
U.S. dollars, except where noted)
|
2021
|
2020
|
2021
|
2020
|
CONSOLIDATED OPEX,
CASH COST AND ALL-IN SUSTAINING COSTS RECONCILIATION
|
|
|
|
|
Operating
expenses
|
88.6
|
86.7
|
277.7
|
242.6
|
Gold equivalent
ounces sold1
|
97,196
|
110,905
|
293,235
|
306,231
|
Operating expenses
per gold equivalent ounce sold ($/ounce)
|
915
|
778
|
947
|
791
|
Operating
expenses
|
88.6
|
86.7
|
277.7
|
242.6
|
Treatment and
refining charges on concentrate sales
|
4.9
|
4.9
|
15.7
|
14.6
|
Total cash
costs
|
93.5
|
91.6
|
293.5
|
257.2
|
Gold equivalent
ounces sold1
|
97,196
|
110,905
|
293,235
|
306,231
|
Total cash costs
per gold equivalent ounce sold ($/ounce)2
|
966
|
822
|
1,001
|
839
|
Sustaining capital
expenditures2
|
31.8
|
43.2
|
113.5
|
128.2
|
Sustaining
exploration - expensed
|
0.4
|
0.2
|
0.7
|
0.1
|
Sustaining
leases2
|
2.6
|
2.8
|
8.0
|
8.1
|
Corporate G&A
including share-based compensation
|
4.9
|
6.0
|
16.9
|
14.1
|
Reclamation
expenses
|
3.3
|
2.2
|
8.0
|
5.8
|
Total all-in
sustaining costs
|
136.5
|
146.0
|
440.6
|
413.5
|
Gold equivalent
ounces sold1
|
97,196
|
110,905
|
293,235
|
306,231
|
All-in sustaining
costs per gold equivalent ounce sold
($/ounce)2
|
1,408
|
1,313
|
1,503
|
1,349
|
Sustaining Capital Expenditures Reconciliation Table
|
Three months ended
September 30
|
Nine months ended
September 30
|
(in millions of
U.S. dollars, except where noted)
|
2021
|
2020
|
2021
|
2020
|
TOTAL SUSTAINING
CAPITAL EXPENDITURES
|
|
|
|
|
Mining interests per
statement of cash flows
|
55.4
|
59.4
|
189.2
|
174.9
|
New Afton growth
capital expenditures
|
(18.8)
|
(16.0)
|
(65.5)
|
(37.2)
|
Rainy River growth
capital expenditures
|
(4.3)
|
(0.1)
|
(9.3)
|
(0.3)
|
Blackwater growth
capital expenditures
|
—
|
(0.2)
|
—
|
(9.2)
|
Sustaining capital
expenditures
|
32.3
|
43.1
|
114.4
|
128.2
|
Adjusted Net Earnings/(Loss)
"Adjusted net earnings" and "adjusted net earnings per share"
are non-GAAP financial performance measures that do not have any
standardized meaning under IFRS and therefore may not be comparable
to similar measures presented by other issuers. "Adjusted net
earnings" and "adjusted net earnings per share" exclude "other
gains and losses" as per Note 3 of the Company's consolidated
financial statements; and loss on redemption of long-term debt. Net
earnings have been adjusted, including the associated tax impact,
for the group of costs in "Other gains and losses" on the condensed
consolidated income statements. Key entries in this grouping are:
the fair value changes for the gold stream obligation; fair value
changes for the free cash flow interest obligation; the gold and
copper option contracts; foreign exchange forward contracts;
foreign exchange gain or loss, loss on disposal of assets and fair
value changes in investments. The income tax adjustments reflect
the tax impact of the above adjustments and is referred to as
"adjusted tax expense".
The Company uses "adjusted net earnings" for its own internal
purposes. Management's internal budgets and forecasts and public
guidance do not reflect the items which have been excluded from the
determination of "adjusted net earnings". Consequently, the
presentation of "adjusted net earnings" enables investors to better
understand the underlying operating performance of the Company's
core mining business through the eyes of management. Management
periodically evaluates the components of "adjusted net earnings"
based on an internal assessment of performance measures that are
useful for evaluating the operating performance of New Gold's
business and a review of the non-GAAP financial performance
measures used by mining industry analysts and other mining
companies. "Adjusted net earnings" and "adjusted net earnings per
share" are intended to provide additional information only and
should not be considered in isolation or as substitutes for
measures of performance prepared in accordance with IFRS. These
measures are not necessarily indicative of operating profit or cash
flows from operations as determined under IFRS. The following table
reconciles these non-GAAP financial performance measures to the
most directly comparable IFRS measure.
|
Three months ended
September 30
|
Nine months ended
September 30
|
(in millions of
U.S. dollars, except where noted)
|
2021
|
2020
|
2021
|
2020
|
ADJUSTED NET
EARNINGS (LOSS) RECONCILIATION
|
|
|
|
|
Earnings (loss)
before taxes
|
(4.9)
|
17.7
|
3.5
|
(59.0)
|
Other losses
(gains)
|
32.0
|
(8.6)
|
66.1
|
51.8
|
Loss on repayment of
long term debt
|
—
|
6.5
|
—
|
6.5
|
Adjusted net earnings
(loss) before taxes
|
27.1
|
15.6
|
69.6
|
(0.7)
|
Income tax (expense)
recovery
|
(6.4)
|
(2.0)
|
(13.8)
|
0.8
|
Income tax
adjustments
|
2.7
|
(1.2)
|
2.4
|
(8.8)
|
Adjusted income tax
(expense) recovery
|
(3.7)
|
(3.2)
|
(11.4)
|
(8.0)
|
Adjusted net earnings
(loss)2
|
23.4
|
12.4
|
58.2
|
(8.7)
|
Adjusted earnings
(loss) per share (basic and diluted)2
|
0.03
|
0.02
|
0.09
|
(0.01)
|
Cash Generated from Operations, before Changes in Non-Cash
Operating Working Capital
"Cash generated from operations, before changes in non-cash
operating working capital" 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. Other companies may calculate this measure
differently and this measure is unlikely to be comparable to
similar measures presented by other companies. "Cash generated from
operations, before changes in non-cash operating working capital"
excludes changes in non-cash operating working capital. New Gold
believes this non-GAAP financial measure provides further
transparency and assists analysts, investors and other stakeholders
of the Company in assessing the Company's ability to generate cash
from its operations before temporary working capital changes.
Cash generated from operations, before non-cash changes in
working capital is intended to provide additional information only
and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS. This
measure is not necessarily indicative of operating profit or cash
flows from operations as determined under IFRS. The following table
reconciles this non-GAAP financial performance measure to the most
directly comparable IFRS measure.
|
Three months ended
September 30
|
Nine months ended
September 30
|
(in millions of
U.S. dollars)
|
2021
|
2020
|
2021
|
2020
|
CASH
RECONCILIATION
|
|
|
|
|
Cash generated from
operations
|
54.3
|
92.2
|
218.0
|
196.3
|
Change in non-cash
operating working capital
|
27.0
|
(8.2)
|
11.8
|
(12.7)
|
Cash generated from
operations, before changes in non-cash operating working
capital2
|
81.3
|
84.0
|
229.8
|
183.6
|
Average Realized Price
"Average realized price per ounce of gold sold" 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. Other companies may calculate
this measure differently and this measure is unlikely to be
comparable to similar measures presented by other companies.
Management uses this measure to better understand the price
realized in each reporting period for gold sales. "Average realized
price per ounce of gold sold" is intended to provide additional
information only and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS. The following tables reconcile this non-GAAP financial
performance measure to the most directly comparable IFRS measure on
an aggregate and mine-by-mine basis.
|
Three months ended
September 30
|
Nine months ended
September 30
|
(in millions of
U.S. dollars, except where noted)
|
2021
|
2020
|
2021
|
2020
|
TOTAL AVERAGE
REALIZED PRICE
|
|
|
|
|
Revenue from gold
sales
|
118.4
|
120.8
|
352.7
|
310.5
|
Treatment and
refining charges on gold concentrate sales
|
1.2
|
1.5
|
4.0
|
4.8
|
Gross revenue from
gold sales
|
119.6
|
122.3
|
356.7
|
315.3
|
Gold ounces
sold
|
66,982
|
75,760
|
198,705
|
205,385
|
Total average
realized price per gold ounce sold ($/ounce)2
|
1,788
|
1,613
|
1,798
|
1,532
|
For additional information with respect to the non-GAAP measures
used by the Company, refer to the detailed "Non-GAAP Financial
Performance Measure" section disclosure in the MD&A for the
three months ended September 30, 2021
filed at www.sedar.com and on EDGAR at www.sec.gov.
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 Company's
ability to meet its updated consolidated gold equivalent production
and all-in sustaining cost guidance; expectations regarding an
improvement in fourth quarter production from Rainy River; the advancement of the B3 ramp up
and C-Zone development at New Afton, as well as the development of
the decline towards the Intrepid underground ore zone at
Rainy River, beyond 2021; the
Company's work on an optimized underground mine plan study at
Rainy River; the planned release
of the results of such study, annual 2022 consolidated guidance and
a Reserve and Resource update, and the timing thereof; expectations
regarding the Company's consolidated gold equivalent production for
2021, annual consolidated copper production guidance, consolidated
2021 all-in sustaining costs and total cash costs; the Company's
ability to meet its updated gold eq. production guidance range and
all-in sustaining cost guidance range at Rainy River; the mining of the East Lobe,
including the planned production and focus on the ODM Center and
ODM North zones; the expected increase in gold grade during the
quarter at Rainy River;
expectations regarding the gold and copper production guidance
ranges and all-in sustaining cost range at New Afton; the Company's
ability to meet its gold eq. production guidance range at New
Afton; expectations regarding the strip ratio for the remainder of
the year at Rainy River; the
Company's ability to advance C-Zone development on plan; the
anticipated increase in the mining rate and continued ramp-up of
the B3 zone at New Afton; plans to optimize metal recoveries at New
Afton; and the Company's plans relating to its ESG approach.
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 press 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 and the grade of gold, silver and copper
expected to be mined; (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 New Afton Mine; 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.