TORONTO, Oct. 2, 2023
/PRNewswire/ - New Gold Inc. ("New Gold" or the "Company")
(TSX: NGD) (NYSE: NGD) is pleased to announce the achievement of
two key milestones at New Afton's C-Zone Project; completion of the
first draw bell at New Afton's C-Zone and commissioning of the
final two of 29 dewatering wells at the New Afton Tailings Storage
Facility (NATSF), as planned. C-Zone will now transition to the
production ramp-up phase and remains on-track to achieve commercial
production in the second half of 2024.
"These are important milestones for New Gold and the New
Afton team," stated Patrick Godin,
President & CEO. "Completing the first draw bell from C-Zone is
a positive step in significantly increasing our production profile
at New Afton over the coming years and final commissioning of all
29 dewatering wells at the NATSF marks the completion of major
activities for the tailings stabilization project. The C-Zone
project remains on track and on budget and we will build on the
momentum from these milestones and continue to advance C-Zone
towards commercial production expected in the second half of
2024."
Key Milestones
C-Zone is the fourth block cave at New Afton, after completion
of Lift 1 in 2022 and the currently producing B3 cave. With current
C-Zone mineral reserves of 486 million pounds of copper and 653,000
ounces of gold, the C-Zone production period of 2024 to 2030 is
expected to increase average annual production at New Afton to
approximately 90,000 ounces of gold and approximately 70 million
pounds of copper, both 60% increases over the midpoint of our 2023
guidance. The operation will take advantage of the existing excess
processing capacity at the mill to process up to 16,000 tonnes per
day (tpd) from C-Zone. Unit mining, processing and G&A costs
per tonne are expected to decrease with the higher throughput rates
and there will be minimal capital expenditure after construction of
the C-Zone project in 2025. As a result, all-in sustaining costs
during that period are expected to significantly decrease, leading
to strong free cash flow for the operation.
Development of the dual ramps from B3 to C-Zone commenced in the
first quarter of 2019, reaching the cave footprint in the second
quarter of 2022. The footprint includes an undercut level, for
initiating the cave, and the extraction level from which ore will
be mucked from drawpoints for the life of the cave. Two drawpoints
make up one draw bell and C-Zone is designed with 91 draw bells
arranged in a herringbone layout. Block caving requires upfront
capital investment in development and footprint construction,
followed by a production period with minimal capex and the lowest
unit mining costs of all the underground mining methods.
Construction of the first draw bell is significant because it is
the transition point at which the block cave gradually ramps up ore
production.
From now until the second half of 2024, additional draw bells
will continue to be constructed until the cave reaches hydraulic
radius to achieve steady state self-cave propagation (considered
commercial production for C-Zone), after which the extraction rate
can be accelerated. Relative to other block caves, New Afton ore
caves well, with Lift 1 and B3 achieving hydraulic radius as
expected without any pre-conditioning required. C-Zone is expected
to achieve hydraulic radius in the second half of 2024. Operating
costs at C-Zone are expected to be significantly lower than current
B3 unit mining costs because the extraction and processing rate
will increase from approximately 8,500 tpd currently to 16,000 tpd,
spreading the fixed costs over a greater tonnage.
A second gyratory crusher will be installed and connected by
conveyors to the existing Lift 1 conveyor system to surface,
eliminating the cost of truck haulage. Of the three additional main
conveyor legs, two are already installed and operational.
Excavation of the crusher chamber is complete and has been handed
over to the construction crew with commissioning expected in the
second half of 2024 to align with the increased extraction
rate.
The C-Zone project also includes three major activities related
to tailings management, including the thickened and amended
tailings (TAT) plant, the stabilization of the Historical Afton
Tailings Storage Facility (HATSF), and the stabilization of NATSF.
Surface subsidence, inherent in block caving, is modelled to
progress in the direction of the HATSF, now closed, and the NATSF.
Therefore, a new TAT plant was constructed and non-flowable,
thickened tailings is diverted into the Historic Afton Pit. The TAT
project was successfully completed on time in late 2022 and, to
date, performance is exceeding design density and strength targets.
In-pit tailings has sufficient capacity to double the remaining
mine life with minimal capital or permitting requirements.
Stabilization of the HATSF and NATSF is achieved through lowering
the phreatic surface, resulting in tailings consolidation and
reduced pore water pressure. Tailings stabilization on the HATSF
was completed in Q4 2022. Stabilization of the NATSF reached an
important milestone in September, with commissioning of the final
dewatering wells. With all 29 wells now complete and operating, the
piezometer network is showing that dewatering is trending within
expectations to the target dewatering rate. Additionally, a total
of five evaporators are in operation with an additional seven being
commissioned to remove surface water from the NATSF. The overall
NATSF stabilization project is on track for completion in the first
half of 2026.
New Afton is at a pivotal moment, with expected near-term
increasing production to lead to a decline all-in sustaining costs,
leading to strong free cash flow for the operation. Coupled with
several underground and regional exploration opportunities the
Company continues to advance, New Gold believes there remains
strategic upside to the operation's future mine life and
production.
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 other
Canadian-focused investments. New Gold's vision is to build a
leading diversified intermediate gold company based in Canada that is committed to the environment
and social responsibility. For further information on the Company,
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: projections
about advancing the C-Zone, transitioning to the production
ramp-up phase and being on track and on budget for commercial
production in the second half of 2024 from the C-Zone;
expectations around significantly increasing the production profile
at New Afton over the coming years; the Company's
estimates and expectations regarding mineral reserves and mineral
resources and associated timing; production expectations for
New Afton; projections around processing at
New Afton's existing mill; the Company's expectations
regarding production, costs, capital and exploration investments
and expenses, and the timing and factors contributing to those
expected results; anticipated decrease in all-in sustaining costs
and significant free cash flow resulting therefrom at
New Afton; planned activities, undertakings and areas of focus
at the New Afton Mine and expectations of timing and
costs associated therewith; the continued construction of
additional draw bells; expectations around achieving
hydraulic radius in the second half of 2024; the anticipated
increase in the extraction and processing rate; the installation of
a second gyratory crusher and the elimination of the cost of truck
haulage resulting therefrom; projected commissioning of the crusher
chamber and conveyor in the second half of 2024; anticipated
completion of the overall NATSF stabilization project in the
first half of 2026; planned completion of commissioning of seven
additional evaporators and the expected effectiveness thereof to
remove surface water from the NATSF; and the strategic upside
projected for New Afton's future mine life and production, and
the factors contributing thereto .
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 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 and the grade of gold,
copper and silver expected to be mined; (4) the exchange rate
between the Canadian dollar and U.S. dollar, and to a lesser
extent, the Mexican Peso, and commodity prices being approximately
consistent with current levels and expectations for the purposes of
2023 guidance and otherwise; (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
Indigenous groups in respect of the New Afton 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 and the absence of material negative comments or
obstacles during any applicable regulatory processes; (9) the
results of the life of mine plans for the New Afton Mine
being realized; and (10) there being no material disruption to the
Company's supply chains and workforce at either the
New Afton Mine or Rainy River Mine due to cases of
COVID-19 or otherwise that would interfere with the Company's
anticipated course of action at its operations.
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: price volatility in the spot and forward markets for
metals and other commodities; discrepancies between actual and
estimated production, between actual and estimated costs, between
actual and estimated Mineral Reserves and Mineral Resources and
between actual and estimated metallurgical recoveries; equipment
malfunction, failure or unavailability; accidents; 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; 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: uncertainties and unanticipated delays associated with
obtaining and maintaining necessary licenses, permits and
authorizations and complying with permitting requirements; changes
in project parameters as plans continue to be refined; changing
costs, timelines and development schedules as it relates to
construction; the Company not being able to complete its
construction projects at the Rainy River Mine or the
New Afton Mine on the anticipated timeline or at all;
volatility in the market price of the Company's securities; changes
in national and local government legislation in the countries in
which New Gold does or may in the future carry on business;
compliance with public company disclosure obligations; controls,
regulations and political or economic developments in the countries
in which New Gold does or may in the future carry on business; the
Company's dependence on the Rainy River Mine and
New Afton Mine; the Company not being able to complete
its exploration drilling programs on the anticipated timeline or at
all; inadequate water management and stewardship; 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
otherwise; the responses of the relevant governments to any
disease, epidemic or pandemic outbreak, including the COVID-19
outbreak, not being sufficient to contain the impact of such
outbreak; disruptions to the Company's supply chain and workforce
due to any disease, epidemic or pandemic outbreak, including the
COVID-19 outbreak; an economic recession or downturn as a result of
any disease, epidemic or pandemic outbreak, including the COVID-19
outbreak, that materially adversely affects the Company's
operations or liquidity position; there being further shutdowns at
the Rainy River Mine or New Afton Mine; significant
capital requirements and the availability and management of capital
resources; additional funding requirements; diminishing quantities
or grades of Mineral Reserves and Mineral Resources; actual results
of current exploration or reclamation activities; uncertainties
inherent to mining economic studies including the Technical Reports
for the Rainy River Mine and New Afton Mine; impairment;
unexpected delays and costs inherent to consulting and
accommodating rights of First Nations and other Indigenous groups;
climate change, environmental risks and hazards and the Company's
response thereto; tailings dam and structure failures; ability to
obtain and maintain sufficient insurance; actual results of current
exploration or reclamation activities; 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; global economic and
financial conditions and any global or local natural events that
may impede the economy or New Gold's ability to carry on business
in the normal course; inflation; compliance with debt obligations
and maintaining sufficient liquidity; taxation; fluctuation in
treatment and refining charges; transportation and processing of
unrefined products; rising costs or availability of labour,
supplies, fuel and equipment; adequate infrastructure;
relationships with communities, governments and other
stakeholders; geotechnical instability and conditions;
labour disputes; the uncertainties inherent in current and future
legal challenges to which New Gold is or may become a party;
defective title to mineral claims or property or contests over
claims to mineral properties; competition; loss of, or inability to
attract, key employees; use of derivative products and hedging
transactions; reliance on third-party
contractors; counterparty risk and the performance of
third party service providers; investment risks and uncertainty
relating to the value of equity investments in public companies
held by the Company from time to time; the adequacy of internal and
disclosure controls; conflicts of interest; the lack of certainty
with respect to foreign operations and 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
successful acquisitions and integration of business arrangements
and realizing the intended benefits therefrom; and information
systems security threats. 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.
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SOURCE New Gold Inc.