Mr. Hannes Portmann reports
NEW GOLD ANNOUNCES 2016 FINANCIAL RESULTS WITH RECORD LOW COSTS DRIVING STRONG MARGINS AND CASH FLOW
New Gold Inc. has released its fourth quarter and full-year 2016 financial results and has updated its year-end reserve and resource estimates. The company previously announced its preliminary 2016 operational results and 2017 guidance on Jan. 30, 2017. (All dollar figures are in U.S. dollars unless otherwise indicated.)
Full-year 2016 highlights:
- Full-year gold production of 381,663 ounces achieved the midpoint of the guidance range of 360,000 to 400,000 ounces;
- Copper production of 102 million pounds exceeded the high end of the guidance range of 81 million to 93 million pounds by 10 per cent;
- 2016 operating expense of $640 per gold ounce and $1.14 per copper pound;
- 2016 delivered record low all-in sustaining costs (1) of $692 per ounce, including total cash costs (2) of $349 per ounce;
- Cash generated from operations before changes in non-cash operating working capital (3) of $302-million;
- Cash generated from operations of $282-million;
- Adjusted net earnings (4) of $24-million, or five cents per share;
- Net earnings of $3-million, or one cent per share;
- Year-end cash and cash equivalents of $186-million.
Fourth quarter 2016 highlights:
-
Fourth quarter production of 95,883 ounces of gold and 26 million pounds of copper;
- Fourth quarter operating expense of $780 per gold ounce and $1.58 per copper pound;
- Fourth quarter all-in sustaining costs of $619 per ounce, including total cash costs of $360 per ounce;
- Cash generated from operations before changes in non-cash operating working capital of $69-million;
- Cash generated from operations of $52-million;
- Adjusted net loss of $2-million, or nil per share;
- Net loss of $20-million, or four cents per share.
Mineral reserves and resources:
-
Year-end 2016 mineral reserves of 14.7 million ounces of gold, 1.1 billion pounds of copper and 76 million ounces of silver.
"Our solid operating performance in 2016 enabled us to deliver record low all-in sustaining costs, resulting in strong margins and cash flow," stated Hannes Portmann, president and chief executive officer. "Our three primary areas of focus in 2017 are enhancing our financial flexibility, executing our updated Rainy River plan and continuing to deliver operationally. Looking further ahead, we feel well positioned for the long term with a robust gold reserve base of 15 million ounces."
FINANCIAL RESULTS FOR 2016
(in millions of U.S. dollars, except per-share amounts)
Three months ended Dec. 31, Year ended Dec. 31,
2016 2015 2016 2015
Revenues $170.3 $199.0 $683.8 $712.9
Operating margin (6) 55.6 82.6 318.0 293.3
Adjusted net earnings/(loss) (2.3) 2.6 24.3 (10.9)
Adjusted net earnings/(loss) per share $nil 0.01 0.05 (0.02)
Net (loss) earnings (19.9) (9.5) 2.7 (201.4)
Net (loss) earnings per basic share (0.04) (0.02) 0.01 (0.40)
Cash generated from operations before changes
in non-cash operating working capital 68.5 87.9 301.8 276.4
Cash generated from operations 51.7 84.9 282.2 262.6
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Fourth quarter revenues decreased by $29-million, or 14 per cent, relative to the prior-year quarter, as the benefit from higher gold and silver prices and higher copper sales volumes was more than offset by lower gold and silver sales volumes. Fourth quarter production was in line with the first three quarters of 2016; however, production was lower than the same period last year, which was a record quarter for New Gold. Relative to the fourth quarter of 2015, the average realized price increased by $117 per ounce of gold, or 11 per cent, 29 cents per pound of copper, or 13 per cent, and $2.36 per ounce of silver, or 16 per cent. The benefit of this was offset by a 29-per-cent decrease in gold sales to 93,936 ounces mainly attributable to the Peak mines, which benefited from mining and processing significantly higher-gold-grade material in the prior year and Cerro San Pedro transitioning into residual leaching. New Gold's 2016 revenues of $684-million decreased relative to 2015, as the benefit from higher gold and silver prices and higher copper sales volumes was more than offset by lower gold and silver sales volumes due to the planned decrease at Cerro San Pedro.
New Gold's fourth quarter operating margin decreased by $27-million relative to the prior-year quarter as a result of the $29-million decrease in revenues. The company's 2016 operating margin increased by $25-million, or 8 per cent, relative to the prior year as a result of lower operating expenses, resulting from a reduction in mining activity at Cerro San Pedro and the company's business improvement initiatives, partially offset by lower revenues.
New Gold had an adjusted net loss of $2-million, or nil per share, in the fourth quarter of 2016 relative to adjusted net earnings of $3-million, or one cent per share, in the prior-year quarter. Quarterly adjusted net earnings were impacted by the combination of a $29-million decrease in revenues from lower production and an aggregate $4-million increase in exploration, business development, and corporate general and administrative expenses. These items were partially offset by a total $25-million decrease in operating expenses, depreciation and depletion due to lower production, and a $6-million decrease in finance costs as more interest has been capitalized to Rainy River. The company reported a net loss of $20-million, or four cents per share, in the fourth quarter. The net loss included the impact of a non-cash $27-million inventory writedown at Cerro San Pedro, a $7-million pretax foreign exchange loss and a non-cash $6-million after-tax impairment charge related to an early-stage royalty interest at Rio Figueroa, which was partially offset by a $16-million pretax unrealized gain on the company's gold price option contracts and a $3-million pretax unrealized gain on the company's gold stream obligation.
In 2016, New Gold had adjusted net earnings of $24-million, or five cents per share, relative to an adjusted net loss of $11-million, or two cents per share, in the prior year. The increase in adjusted net earnings was driven by a net $54-million decrease in operating expenses, depreciation and depletion and a $28-million decrease in finance costs as more interest has been capitalized to Rainy River. These items were partially offset by a $29-million decrease in revenues from lower production, a $12-million increase in adjusted income tax expense, and a $7-million increase in exploration, business development, and corporate general and administrative expenses. The company's 2016 reported net earnings of $3-million, or one cent per share, were impacted by the non-cash $27-million inventory writedown at Cerro San Pedro and the non-cash $6-million after-tax impairment charge related to Rio Figueroa. In 2015, the net loss was driven by the non-cash $14-million after-tax impairment charge related to the Peak mines, the non-cash $13-million inventory writedown at Cerro San Pedro, a $98-million pretax foreign exchange loss and a non-cash $99-million after-tax loss associated with the sale of El Morro.
The company's fourth quarter cash generated from operations before changes in non-cash operating working capital of $69-million was $19-million, or 22 per cent, lower than the prior-year period as the impact of lower revenues was only partially offset by the decrease in expense. Cash generated from operations in the fourth quarter of 2016 was $52-million relative to $85-million in the prior-year quarter. The major working capital difference at Dec. 31, 2016, was an outstanding concentrate receivable of $21-million at New Afton, which was collected in January, 2017.
New Gold's 2016 cash generated from operations before changes in non-cash operating working capital of $302-million was $25-million, or 9 per cent, higher than 2015. The increase was directly attributable to the higher operating margin. Full-year cash generated from operations of $282-million increased by $20-million compared with 2015.
Financial update
New Gold's year-end 2016 cash and cash equivalents were $186-million. During the fourth quarter, the company received the remaining $75-million of the stream deposit from RGLD Gold AG, a wholly owned subsidiary of Royal Gold Inc., and drew $100-million from its $400-million revolving credit facility. At Dec. 31, 2016, an additional $122-million of the facility was used to issue letters of credit for closure obligations at the company's producing mines and development projects, leaving $178-million undrawn.
In addition, on Feb. 8, 2017, New Gold announced that the company has entered into a binding letter agreement with Goldcorp Inc. to the sell the company's gold stream on the El Morro project for $65-million cash. Including the El Morro proceeds, the company's pro forma liquidity totals $429-million (cash, undrawn credit facility and El Morro proceeds) plus its expected free cash flow generation from its operating mines in 2017.
In 2016, New Gold entered into gold price option contracts covering 120,000 ounces of its first half 2017 production, with put options at a strike price of $1,300 per ounce and call options at a strike price of $1,400 per ounce. The company has also fixed the price for 31.7 million pounds of the company's first half 2017 copper production at $2.52 per pound. These initiatives increase the company's cash flow certainty during a portion of the remaining Rainy River development period.
After formally establishing a business improvement function in the second half of 2015, New Gold has continually looked for opportunities to maximize free cash flow from its portfolio of operating mines. One particularly successful business improvement initiative has been at New Afton, where improved mining and milling efficiencies have enabled the company to achieve significantly higher-than-targeted mill throughput after the successful completion of the mill expansion project in mid-2015. On a consolidated basis, the success of the multiple active business improvement initiatives was a key contributor to New Gold delivering an all-in sustaining cost of $692 per ounce in 2016, which was well below the company's mid-2016 updated guidance range of $750 to $790 per ounce.
In addition to the benefits of the continuing business improvement initiatives included in New Gold's 2017 guidance, the company is actively evaluating further opportunities that could enhance cash flow during the remaining Rainy River construction period. The additional opportunities being assessed include further process improvements at New Afton, as well as potential operating and capital cost savings at New Afton, Mesquite and the Peak mines. In aggregate, these initiatives could have the potential to increase the 2017 free cash flow contribution from New Gold's four operations by approximately $20-million.
Since the company's Jan. 30, 2017, news release, with the sale of the El Morro stream, New Gold has made solid progress in enhancing its liquidity position. The company will continue to assess additional opportunities to further increase its financial flexibility.
At the end of 2016, the face value of the company's long-term debt was $900-million (book value: $890-million). The components of the long-term debt include: $300-million of 7.00-per-cent face-value senior unsecured notes due in April of 2020, $500-million of 6.25-per-cent face-value senior unsecured notes due in November of 2022 and $100-million drawn from the revolving credit facility. The company currently has approximately 514 million shares outstanding.
OPERATIONAL RESULTS
Three months ended Dec. 31, Year ended Dec. 31,
2016 2015 2016 2015
Operating information
Gold (ounces)
Produced 95,883 131,719 381,663 435,718
Sold 93,936 133,005 378,239 428,852
Copper (millions of pounds)
Produced 25.6 28.8 102.3 100.0
Sold 24.6 25.5 99.2 92.9
Silver (millions of ounces)
Produced 0.3 0.5 1.3 1.9
Sold 0.3 0.5 1.3 1.8
Revenue
Gold ($/ounce) $1,176 $1,067 $1,219 $1,120
Copper ($/pound) 2.22 1.96 2.03 2.21
Silver ($/ounce) 16.19 14.10 16.68 15.12
Average realized price (5)
Gold ($/ounce) 1,211 1,094 1,255 1,149
Copper ($/pound) 2.45 2.16 2.23 2.42
Silver ($/ounce) 16.80 14.44 17.15 15.38
Operating expense
Gold ($/ounce) 780 614 640 647
Copper ($/pound) 1.58 1.21 1.14 1.36
Silver ($/ounce) 10.82 8.10 8.75 8.66
Total cash costs ($/ounce) (2) 360 389 349 443
All-in sustaining costs ($/ounce) (1) 619 613 692 809
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The company has included new revenue and cost disclosures, namely, revenue and operating expense per ounce and per pound. Revenue per ounce and per pound is net of treatment and refining charges, whereas average realized price is before treatment and refining charges are taken into account. Operating expense per ounce and pound apportions the company's operating expense, as shown on New Gold's consolidated income statement, to each metal on a percentage of revenue basis.
The fourth quarter of 2016 delivered gold production of 95,883 ounces, resulting in full-year gold production of 381,663 ounces. The combination of the Peak mines' very strong year and solid operating performances at New Afton and Cerro San Pedro enabled the company to achieve the midpoint of its guidance range of 360,000 to 400,000 ounces. Full-year production was lower than 2015 primarily due to Cerro San Pedro's planned transition to residual leaching in mid-2016.
New Gold's fourth quarter copper production of 26 million pounds was consistent with the first three quarters of 2016 and slightly below the prior-year quarter. Full-year copper production of 102 million pounds was in line with prior-year production and 10 per cent above the high end of the company's 2016 guidance range of 81 million to 93 million pounds. Full-year silver production of 1.3 million ounces was below the guidance range of 1.6 million to 1.8 million ounces.
Operating expense per gold ounce during the fourth quarter increased relative to the prior-year quarter primarily due to a heap-leach inventory writedown of $24-million at Cerro San Pedro. Operating expense per gold ounce for the full year was in line with the prior year.
The company delivered fourth quarter all-in sustaining costs of $619 per ounce, including total cash costs of $360 per ounce, which was the lowest-cost quarter of the year and consistent with the prior-year quarter. The company's strong fourth quarter performance reduced New Gold's 2016 all-in sustaining costs to a record low $692 per ounce, including total cash costs of $349 per ounce. The significant decrease in costs enabled New Gold to generate an all-in sustaining cost margin of $563 per ounce, or 45 per cent. The $117-per-ounce decrease in all-in sustaining costs relative to the prior year was attributable to the combination of a $94-per-ounce decrease in total cash costs, primarily driven by significantly lower costs at the Peak mines, and a $27-million, or $23-per-ounce, decrease in the company's consolidated sustaining costs. Consolidated sustaining costs include New Gold's consolidated sustaining capital, exploration, general and administrative, and amortization of reclamation expenditures.
As indicated in New Gold's second quarter 2016 results news release, the company's original full-year guidance for consolidated total cash costs and all-in sustaining costs was lowered by $75 per ounce to $360 to $400 per ounce and $750 to $790 per ounce, respectively. The company's full-year costs ultimately came in below the reduced cost guidance. This was due to the positive impact of business improvement initiatives leading to higher copper production and lower sustaining costs, and higher realized copper and silver prices only being partially offset by the appreciation of exchange rates relative to what was assumed when setting guidance.
"Two thousand sixteen was a great operational year for New Gold," added Raymond Threlkeld, interim chief operating officer. "We are proud to extend our track record of meeting or beating our operational guidance. I thank the team for their hard work and for delivering these strong results."
For additional detail on the changes in production and costs at New Gold's four operations in the fourth quarter and full year, refer to the company's Jan. 30, 2017, news release, "New Gold achieves 2016 production guidance at lower costs, provides Rainy River update, 2017 guidance and announces board and management changes."
Projects update
Rainy River
Development activities at New Gold's Rainy River project, located in Northwestern Ontario, continue to advance, and the project is scheduled to transition from construction to operation in the third quarter of 2017.
Rainy River -- 2016 key highlights:
-
Project spending during the fourth quarter totalled $146-million, bringing full-year 2016 capital spending at the project to $465-million;
- Concrete placement, steelwork erection and cladding complete;
- SAG and ball mill shells in place;
- Preleach thickener tank and leach tanks complete;
- Power line completed and main substation has been energized;
- Installation of mechanical, piping, electrical and instrumentation in processing facilities over 65 per cent complete through mid-February, 2017;
- Primary crusher and conveyor system over 80 per cent complete.
Mining activities at Rainy River have progressed well to start 2017. From the beginning of the year through the end of last week, the company mined over four million tonnes of overburden and waste from the pit, which was slightly ahead of the tonnage targeted in New Gold's updated plan announced on Jan. 30, 2017. At the same time, approximately 350,000 cubic metres of construction material have been placed at the starter tailings cell, which is also slightly ahead of plan. The contractor that will mine the peat and basal till layers within the pit using smaller equipment has been mobilized and is scheduled to begin work in the pit tomorrow, which should result in increased daily mining rates by New Gold's team in the coming weeks. The September start-up is based on an expectation that the mining rate will continue to increase to an average of approximately 120,000 tonnes per day over the next six months, which includes both planned productivity gains and the impact of changing weather conditions through the spring.
All of the key structural components of the process facilities have been completed, and the setting of mechanical equipment and installation of piping, electrical and instrumentation services are well advanced. New Gold plans to complete the testing of the various components of the process facility using a staged approach, after which the company will complete dry and wet commissioning of the full process circuit.
The primary crusher and conveyor system are over 80 per cent complete, and commissioning of the crusher is scheduled to commence in March of 2017. Thereafter, the commissioning of the ball and SAG mills should start during the second quarter. Finally, the refining portion of the circuit should be completed and ready to begin commissioning early in the third quarter. Dry and wet commissioning of the full process circuit is scheduled to take place in August, which should leave approximately one month before targeted first production for any required adjustments to the circuit.
The company continues to work closely with Environment and Climate Change Canada toward obtaining an amendment to Schedule 2 of the metal mining effluent regulations, required to close two small creeks and deposit tailings, which is targeted to be received in the third quarter of 2017. However, as previously disclosed, New Gold's redesign of the tailings management facility incorporated a starter tailings cell within the broader facility that does not require a Schedule 2 amendment from the federal government. The inclusion of a starter cell is an approach that has been used at other Canadian mining operations. Based on its location and scale, the starter cell would provide capacity for approximately six months of tailings. Once the Schedule 2 amendment is received, New Gold would need approximately three months, in good construction weather, to complete construction of the tailings dam.
Based on the company's targeted September production start, New Gold expects total 2017 production at Rainy River to be 50,000 to 60,000 ounces. Approximately 15,000 ounces are planned for the precommercial production period with revenue for this production being credited against the development capital estimate.
Over Rainy River's targeted two months of commercial production in 2017, the operating expense is expected to be $905 to $945 per gold ounce with all-in sustaining costs expected to be $1,200 to $1,240 per ounce. Both the operating expense and all-in sustaining costs are well above the levels targeted once Rainy River reaches full capacity. The 2017 costs are negatively impacted by lower gold sales resulting from the combination of throughput being lower than design during commissioning and ramp-up and planned lower grade to be processed during the commissioning phase. In addition, there is approximately $12-million, or $305 per ounce, of sustaining costs budgeted during the commercial production period.
Project spending at Rainy River during the fourth quarter totalled $146-million, bringing full-year 2016 capital spending at the project to $465-million. The total Rainy River project development capital spending through the end of 2016 was $777-million.
Based on a $1.30-(Canadian)/U.S.-dollar exchange rate, the remaining capital cost from the beginning of 2017 to the targeted November commercial production is estimated to be approximately $515-million, inclusive of $40-million of contingency.
Though the Rainy River construction has presented challenges, New Gold continues to look forward to the expected growth in the company's production and cash flow once Rainy River transitions into operation later this year. Rainy River has multiple important asset qualities, including its great jurisdiction, significant annual production potential, long estimated reserve life and continued exploration potential.
YEAR-END 2016 MINERAL RESERVES AND RESOURCES AND 2017 EXPLORATION PLANS
As at Dec. 31, 2016 As at Dec. 31, 2015
Gold Koz Silver Moz Copper Mlb Gold Koz Silver Moz Copper Mlb
Proven and probable reserves 14,704 76 1,113 14,985 76 1,193
New Afton 1,161 4 1,033 1,228 4 1,112
Mesquite 1,179 - - 1,492 - -
Peak mines 251 1 80 267 1 82
Cerro San Pedro - - - 13 - -
Rainy River 3,943 10 - 3,814 9 -
Blackwater 8,170 61 - 8,170 61 -
Measured and indicated resources
(exclusive of reserves) 6,222 22 1,121 6,659 34 1,065
Inferred resources 1,644 5 291 1,844 24 194
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Note: See the attached detailed mineral reserve and resource tables and the notes to mineral reserve
and resource estimates in this news release for further detail regarding the Dec. 31, 2016, estimates.
For details regarding the Dec. 31, 2015, mineral reserve and resource estimates, including a breakdown
by category, refer to New Gold's annual information form for the year ended Dec. 31, 2015, dated March
29, 2016.
Year-end 2016 mineral reserves and resources
As part of New Gold's estimate of year-end 2016 mineral reserves and resources, the company increased the gold price assumptions used to estimate mineral reserves and resources by $50 per ounce to $1,250 per ounce and $1,350 per ounce, respectively. The updated gold reserve pricing assumption is consistent with long-term consensus estimates. The reserve pricing assumptions for copper of $2.75 per pound and silver of $15 per ounce remained the same as 2015. In calculating its cut-off grades for year-end 2016 mineral reserve and resource estimates, the company used exchange rate assumptions of $1.25, $1.30 and $17 for the Canadian dollar, Australian dollar and Mexican peso relative to the U.S. dollar.
On a consolidated basis, the company's total gold mineral reserves of 14.7 million ounces remained in line with year-end 2015. New Gold was able to partially offset approximately 500,000 ounces of depletion from 2016 mining activity through the addition of 100,000 ounces of reserve conversion at the company's Peak mines and 100,000 ounces from Rainy River as a result of updates to the open-pit and underground mine plans. At Mesquite, gold mineral reserves decreased relative to the end of 2015 due to a combination of 2016 mine depletion and an updated mineral resource estimate that incorporates lowered metallurgical recoveries for non-oxide transitional material in the life-of-mine plan. New Gold's consolidated year-end 2016 copper mineral reserves of 1.1 billion pounds decreased slightly due to depletion from mining activities in 2016.
The change in consolidated measured and indicated gold resources, exclusive of reserves, was primarily attributable to an updated open-pit and underground mine plan at Rainy River, conversion of mineral resources to reserves at the Peak mines, and the exclusion of the Capoose resource, located approximately 25 kilometres west of the Blackwater deposit, from the current mineral resource statement. The Peak mines base-metal inferred resource increased significantly with the addition of approximately 100 million pounds of copper from Great Cobar/Anjea and approximately 400 million pounds of combined lead-zinc primarily from the recently discovered Chronos zone.
Exploration plans for 2017
New Gold's 2017 exploration plans will be focused on three assets, the Peak mines, New Afton and Rainy River. Targeted exploration spending totals $17-million, of which $16-million is expected to be expensed. New Gold's consolidated 2017 guidance for all-in sustaining costs includes this $16-million, or approximately $40 per ounce, of the total $17-million of planned exploration spending.
Consistent with prior years, the objective at the Peak mines in 2017 is to further extend the mine's history of mineral reserve and resource replacement, with a particular focus on gold-dominant targets identified in the Southern mine corridor (Peak, Perseverance and Chronos) and, to a lesser extent, on copper-dominant targets in the Northern mine corridor (Chesney, New Cobar and Great Cobar). At New Afton, the 2017 program is scheduled to be split between underground infill drilling to upgrade the lower portion of the C zone to a measured confidence level and reconnaissance drilling on positive 2016 results and other emerging prospects. At Rainy River, the 2017 program is focused within a five-kilometre radius of the mine development area and is scheduled to include surface drilling and target generation. New Gold has also allocated $2-million toward the Fifield project in New South Wales, Australia, where the company has the opportunity to earn a 70-per-cent interest.
Guidance
for 2017
Going forward, New Gold's asset by asset cost guidance will include operating expense per gold ounce, operating expense per copper pound and all-in sustaining costs. Operating expense per ounce and pound apportions the company's operating expense, as shown on New Gold's consolidated income statement, to each metal on a percentage of revenue basis. New Gold will continue to provide total cash cost guidance on a consolidated basis, but not at the asset level.
GUIDANCE FOR 2017
Gold production Copper production Operating expense
(thousand oz) (million lb) ($/gold ounce)
Rainy River (1) 50-60 - $905-$945
New Afton 70-80 85-95 $405-$445
Mesquite 140-150 - $675-$715
Peak mines 85-95 15 $780-$820
Cerro San Pedro 35-45 - $1,080-$1,120
New Gold consolidated 380-430 100-110 $630-$670
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Operating expense All-in sustaining costs
($/copper pound) ($/gold ounce)
Rainy River (1) - $1,200-$1,240
New Afton $0.80-$1.00 ($280)-($240)
Mesquite - $805-$845
Peak mines $1.55-$1.75 $1,060-$1,100
Cerro San Pedro - $1,090-$1,130
New Gold consolidated $1.25-$1.45 $825-$865
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Note: Estimated consolidated silver production in 2017
approximately 1.1 million ounces.
(1) Rainy River gold production guidance includes
precommercial production of approximately 15,000
ounces. Rainy River operating expense per gold ounce
and all-in sustaining costs calculated based on
commercial production ounces.
New Gold's 2017 consolidated gold production is expected to increase relative to the prior year due to the planned September start-up of Rainy River. Consolidated gold production from New Afton, Mesquite and the Peak mines should remain in line with 2016 production levels; however, production at Cerro San Pedro is scheduled to decrease as the mine enters its first full year of residual leaching. Copper production is expected to increase slightly at New Afton due to higher copper grades, while copper production from the Peak mines is expected to be in line with 2016. Consolidated silver production is scheduled to remain in line with the prior year at approximately 1.1 million ounces.
Consistent with previous years, New Gold's full-year 2017 gold production is not scheduled to be evenly distributed across the four quarters. Quarterly consolidated gold production is expected to build steadily throughout the year with the fourth quarter benefiting from the start-up of Rainy River.
New Gold's byproduct pricing assumptions for 2017 are $2.50 per copper pound and $16 per silver ounce. The 2017 assumptions for the Canadian-dollar, Australian-dollar and Mexican-peso exchange rates are $1.30, $1.35 and $20 to the U.S. dollar.
The company's 2017 operating expense will increase due to the advancement of Rainy River into production; however, operating expense per gold ounce and operating expense per copper pound should both remain in line with 2016.
Consolidated total cash costs for the year are expected to increase by approximately $65 per ounce to $395 to $435 per ounce as a result of higher gross operating costs attributable to the start-up of Rainy River, partially offset by higher byproduct revenues. New Gold's 2017 all-in sustaining costs are expected to increase by approximately $150 per ounce when compared with the $692 per ounce delivered in 2016. Two thousand seventeen sustaining costs, including sustaining capital, exploration, general and administrative, and amortization or reclamation expenditures, are expected to increase by approximately $35-million relative to the prior year with the increase in sustaining capital expenditures from the start-up of Rainy River, and increased underground development costs at New Afton and Peak mines, partially offset by lower capital expenditures at Mesquite.
New Gold 2017 all-in sustaining cost key sensitivities
Sensitivities to silver price and the Mexican peso are not shown as the sensitivities are limited.
NEW GOLD 2017 ALL-IN SUSTAINING COST KEY SENSITIVITIES
Category Copper price Cdn$/U.S.$ Aust.$/U.S.$
Base assumption $2.50 $1.30 $1.35
Sensitivity +/-$0.25 +/-$0.05 +/-$0.05
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Cost-per-ounce impact
Rainy River - +/-$45 -
New Afton +/-$185 +/-$80 -
Mesquite - - -
Peak mines +/-$40 - +/-$50
New Gold total +/-$45 +/-$20 +/-$10
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Webcast and conference call
A webcast and conference call to discuss these results will be held on Feb. 16, 2017, at 10 a.m. Eastern Time. Participants may join the webcast by registering on the company's website. You may also listen to the conference call by calling toll-free 1-888-231-8191, or 1-647-427-7450 outside of the United States and Canada. A recorded playback of the conference call will be available until March 15, 2017, by calling toll-free 1-855-859-2056, or 1-416-849-0833 outside of the U.S. and Canada, passcode 62154111. An archived webcast will also be available until May 15, 2017, at the company's website.
About New Gold Inc.
New Gold is an intermediate gold mining company. The company has a portfolio of four producing assets and two significant development projects. The New Afton mine in Canada, the Mesquite mine in the United States, the Peak mines in Australia and the Cerro San Pedro mine in Mexico (which transitioned to residual leaching in 2016) provide the company with its current production base. In addition, New Gold owns 100 per cent of the Rainy River and Blackwater projects, located in Canada.
Attached detailed mineral reserve and resource tables
MINERAL RESERVES STATEMENT AS AT DEC. 31, 2016
Proven and probable Metal grade Contained metal
Tonnes 000s Gold g/t Silver g/t Copper % Gold Koz Silver Koz Copper Mlb
New Afton
A&B zones
Proven - - - - - - -
Probable 34,649 0.51 2.1 0.78 566 2,383 598
C Zone
Proven - - - - - - -
Probable 25,687 0.72 1.8 0.77 594 1,492 435
Total New Afton P&P 60,336 0.60 2.0 0.78 1,161 3,874 1,033
------- ---- ---- ----- ------ ------ -----
Mesquite
Proven 7,882 0.49 - - 123 - -
Probable 63,479 0.52 - - 1,056 - -
Total Mesquite P&P 71,361 0.51 - - 1,179 - -
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Peak mines
Southern mine corridor
Proven 514 6.78 15.7 0.75 112 259 8
Probable 492 5.45 13.6 0.60 86 215 7
Southern mine corridor P&P 1,006 6.13 14.7 0.68 198 475 15
Northern mine corridor
Proven 787 0.94 7.0 1.81 24 176 31
Probable 902 0.85 6.4 1.64 25 185 33
Northern mine corridor P&P 1,689 0.89 6.6 1.72 48 361 64
Stockpile
Proven 66 1.92 8.5 0.86 4 18 1
Combined P&P
Proven 1,370 3.18 10.3 1.36 140 453 41
Probable 1,390 2.48 9.0 1.28 111 401 39
Total Peak mines P&P 2,760 2.83 9.6 1.32 251 854 80
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Rainy River
Direct processing material
Open pit
Proven 16,944 1.41 2.5 - 771 1,353 -
Probable 45,001 1.19 3.2 - 1,728 4,692 -
Open pit P&P (direct processing) 61,946 1.25 3.0 - 2,499 6,045 -
Underground
Proven - - - - - - -
Probable 5,411 5.34 11.2 - 929 1,956 -
Underground P&P (direct
processing) 5,411 5.34 11.2 - 929 1,956 -
Stockpile material
Open pit
Proven 9,322 0.45 1.5 - 135 462 -
Probable 27,081 0.44 1.8 - 380 1,540 -
Open pit P&P (stockpile) 36,403 0.44 1.7 - 516 2,002 -
Combined P&P
Proven 26,266 1.07 2.1 - 906 1,815 -
Probable 77,493 1.22 3.3 - 3,037 8,188 -
Total Rainy River P&P 103,760 1.18 3.0 - 3,943 10,003 -
------- ---- ---- ----- ------ ------ -----
Blackwater
Direct processing material
Proven 124,500 0.95 5.5 - 3,790 22,100 -
Probable 169,700 0.68 4.1 - 3,730 22,300 -
P&P (direct processing) 294,200 0.79 4.7 - 7,520 44,400 -
Stockpile material
Proven 20,100 0.50 3.6 - 325 2,300 -
Probable 30,100 0.34 14.6 - 325 14,100 -
P&P (stockpile) 50,200 0.40 10.2 - 650 16,400 -
Total Blackwater P&P 344,400 0.74 5.5 - 8,170 60,800 -
------- ---- ---- ----- ------ ------ -----
Total P&P 14,704 75,531 1,113
------- ---- ---- ----- ------ ------ -----
MINERAL RESOURCES STATEMENT AS AT DEC. 31, 2016
Measured and indicated
(exclusive of reserves) Metal grade Contained metal
Tonnes 000s Gold g/t Silver g/t Copper % Gold Koz Silver Koz Copper Mlb
New Afton
A&B zones
Measured 16,081 0.66 2.1 0.85 339 1,072 302
Indicated 10,904 0.46 2.2 0.67 161 784 160
A&B zone M&I 26,985 0.58 2.1 0.78 500 1,856 462
C zone
Measured 2,071 1.09 2.4 1.20 72 162 55
Indicated 16,744 0.76 2.2 0.90 410 1,156 330
C zone M&I 18,815 0.80 2.2 0.93 483 1,318 385
HW len
Measured - - - - - - -
Indicated 10,764 0.51 2.1 0.43 176 713 103
HW lens M&I 10,764 0.51 2.1 0.43 176 713 103
Total New Afton M&I 56,592 0.64 2.1 0.76 1,158 3,887 950
------- ----- ---- ----- ------ ------ ----
Mesquite
Measured 5,479 0.37 - - 64 - -
Indicated 65,002 0.47 - - 976 - -
Total Mesquite M&I 70,481 0.46 - - 1,040 - -
------- ----- ---- ----- ------ ------ ----
Peak mines
Southern mine corridor
Measured 666 5.53 8.2 0.70 118 174 9
Indicated 770 4.14 10.4 0.84 103 258 14
Southern mine corridor M&I 1,436 4.79 9.4 0.77 216 429 25
Northern mine corridor
Measured 804 2.32 5.0 1.00 60 129 18
Indicated 3,030 0.99 5.1 2.02 97 489 130
Northern mine corridor M&I 3,840 1.28 5.1 1.80 158 619 147
Combined M&I
Measured 1,470 3.78 6.4 0.87 178 303 27
Indicated 3,800 1.63 6.2 1.78 200 747 144
Total Peak mines M&I 5,270 2.23 6.2 1.52 378 1,050 171
------- ----- ---- ----- ------ ------ ----
Rainy River
Direct processing material
Open pit
Measured 3,638 1.11 2.8 - 130 329 -
Indicated 28,976 1.16 3.7 - 1,079 3,485 -
Open pit M&I
(direct processing) 32,614 1.15 3.6 - 1,209 3,814 -
Underground
Measured - - - - - - -
Indicated 5,035 3.71 10.4 - 601 1,678 -
Underground M&I
(direct processing) 5,035 3.71 10.4 - 601 1,678 -
Stockpile material
Open pit
Measured 2,490 0.36 2.8 - 29 223 -
Indicated 34,984 0.43 2.4 - 483 2,694 -
Open pit M&I (stockpile) 37,474 0.42 2.4 - 512 2,917 -
Combined M&I
Measured 6,128 0.81 2.8 - 159 552 -
Indicated 68,995 0.97 3.5 - 2,163 7,857 -
Total Rainy River M&I 75,123 0.96 3.5 - 2,322 8,409 -
------- ----- ---- ----- ------ ------ ----
Blackwater
Direct processing material
Measured 289 1.39 6.6 - 13 61 -
Indicated 42,444 0.85 4.6 - 1,160 6,277 -
M&I (direct processing) 42,733 0.85 4.6 - 1,173 6,339 -
Stockpile material
Measured - - - - - - -
Indicated 14,602 0.32 3.9 - 150 1,831 -
M&I (stockpile) 14,602 0.32 3.9 - 150 1,831 -
Total Blackwater M&I 57,335 0.72 4.4 - 1,323 8,169 -
------- ----- ---- ----- ------ ------ ----
Total M&I exclusive
of reserves 6,222 21,515 1,121
------- ----- ---- ----- ------ ------ ----
MINERAL RESOURCES STATEMENT AS AT DEC. 31, 2016
Inferred Metal grade Contained metal
Tonnes 000s Gold g/t Silver g/t Copper % Gold Koz Silver Koz Copper Mlb
New Afton
A&B zone 7,344 0.35 1.3 0.35 83 304 57
C zone 6,900 0.43 1.3 0.46 96 295 70
HW lens 978 0.69 1.4 0.46 22 45 10
New Afton inferred 15,219 0.41 1.3 0.41 200 644 137
------- ----- ---- ----- ---- ---- ----
Mesquite 7,118 0.32 - - 74 - -
------- ----- ---- ----- ---- ---- ----
Peak mines
Southern mine corridor 440 3.66 9.6 0.63 52 133 6
Northern mine corridor 3,540 1.11 6.0 1.94 126 679 148
Peak inferred 3,980 1.39 6.4 1.80 178 812 154
------- ----- ---- ----- ---- ---- ----
Rainy River
Direct processing
Open pit 5,808 1.01 2.8 - 188 528 -
Underground 5,130 3.53 2.8 - 583 467 -
Total direct processing 10,938 2.19 2.8 - 771 995 -
Stockpile
Open pit 8,916 0.40 1.5 - 114 435 -
Rainy River inferred 19,854 1.39 2.2 - 885 1,430 -
------- ----- ---- ----- ---- ---- ----
Blackwater
Direct processing 10,908 0.80 3.8 - 279 1,333 -
Stockpile 2,660 0.33 3.2 - 28 274 -
Blackwater inferred 13,568 0.70 3.7 - 307 1,606 -
------- ----- ---- ----- ---- ---- ----
Total inferred 1,644 4,492 291
------- ----- ---- ----- ---- ---- ----
In addition to the Peak mines inferred resource stated herein, the attached inferred mineral resources statement table summarizes additional inferred resources contained in satellite lead-zinc lenses at the Chronos, Peak and Great Cobar deposits.
MINERAL RESOURCES STATEMENT AS AT DEC. 31, 2016
Inferred Metal grade
Tonnes 000s Gold g/t Silver g/t Copper % Lead % Zinc %
Peak mine
Southern mine corridor 1,410 0.73 35.3 0.34 5.93 6.23
Northern mine corridor 100 0.19 24.7 0.28 3.56 9.11
Total Pb-Zn inferred 1,510 0.69 34.6 0.34 5.78 6.42
Contained metal
Gold Koz Silver Koz Copper Mlb Lead Mlb Zinc Mlb
Peak mines
Southern mine corridor 33 1,640 11 194 181
Northern mine corridor 1 80 1 20 8
Total Pb-Zn inferred 34 1,720 11 214 189
Notes to mineral reserve and resource estimates
(1) New Gold's mineral reserves and resources have been estimated in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum standards, which are incorporated by reference in National Instrument 43-101.
(2) All mineral resource and mineral reserve estimates for New Gold's properties and projects are effective Dec. 31, 2016.
(3) New Gold's year-end 2016 mineral reserves and mineral resources have been estimated based on metal prices and foreign exchange rate criteria.
METAL PRICES AND FOREIGN EXCHANGE RATE
Gold Silver Copper Lead Zinc Cdn$ Aust.$ Mxn peso
$/ounce $/ounce $/pound $/pound $/pound
Mineral reserves $1,250 $15.00 $2.75 n/a n/a 1.25 1.301 7.00
Mineral resources $1,350 $17.00 $3.00 $0.85 $1.00 1.25 1.301 7.00
(4) Lower cut-offs for the company's mineral reserves and mineral resources are outlined in the attached lower cut-offs table.
LOWER CUT-OFFS
Mineral property Mineral reserves Mineral resources
lower cut-off lower cut-off
New Afton Main zone: B1 and B2 blocks $17.00 (Cdn)/t All resources: 0.40% CuEq
B3 block and C zone $24.00 (Cdn)/t
---------------------------- -------------------------------- --------------------------------
Mesquite Oxide and transitional 0.16 g/t Au (0.005 oz/t Au) 0.12 g/t Au (0.0035 oz/t Au)
Sulphide 0.41 g/t Au (0.012 oz/t Au) 0.24 g/t Au (0.007 oz/t Au)
---------------------------- -------------------------------- --------------------------------
Peak mines All ore types $80 (Aust.)/t to $146 (Aust.)/t $113 (Aust.)/t to $150 (Aust.)/t
---------------------------- -------------------------------- --------------------------------
Cerro San Pedro All ore types $6.00 (U.S.)/t n/a
---------------------------- -------------------------------- --------------------------------
Rainy River O/P direct processing 0.30-0.60 g/t AuEq 0.30-0.45 g/t AuEq
O/P stockpile 0.30 g/t AuEq 0.30 g/t AuEq
U/G direct processing 3.50 g/t AuEg 2.50 g/t AuEq
---------------------------- -------------------------------- --------------------------------
Blackwater O/P direct processing 0.26-0.38 g/t AuEq All resources: 0.40 g/t AuEq
O/P stockpile 0.32 g/t AuEq
---------------------------- --------------------------------
(5) New Gold reports its measured and indicated mineral resources exclusive of mineral reserves. Measured and indicated mineral resources that are not mineral reserves do not have demonstrated economic viability. Inferred mineral resources have a greater amount of uncertainty as to their existence, economic and legal feasibility, do not have demonstrated economic viability, and are likewise exclusive of mineral reserves. Numbers may not add due to rounding.
(6) Mineral resources are classified as measured, indicated and inferred based on relative levels of confidence in their estimation and on technical and economic limits consistent with the methods most suitable to their potential commercial exploitation. Where different mining and/or processing methods might be applied to different portions of a mineral resource, the designators open pit and underground are used to indicate the envisioned mining method. The designators oxide, non-oxide and sulphide have likewise been applied to indicate the type of mineralization as it relates to the appropriate mineral processing method and expected payable metal recoveries, and the designators direct processing and stockpile have been applied to differentiate material envisioned to be mined and processed directly from material to be mined and stored in a stockpile for future processing. Mineral reserves and mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, and other risks and relevant issues. Additional details regarding mineral reserve and mineral resource estimation, classification, reporting limits, key assumptions, and associated risks for each of New Gold's material properties are provided in the respective National Instrument 43-101 technical reports, which are available at SEDAR.
(7) Rainy River project
In addition to the criteria described herein, mineral reserves and mineral resources for the Rainy River project are reported according to the following additional criteria: underground mineral reserves are reported peripheral to and/or below the open-pit mineral reserve pit shell, which has been designed and optimized based on an $800-per-ounce gold price. Underground mineral resources are reported below a larger mineral resource pit shell, which has been defined based on a $1,350-per-ounce gold price. Approximately 40 per cent of the gold metal content defined as underground mineral reserves is derived from material located between the mineral reserve pit shell and the mineral resource pit shell. The remaining 60 per cent of the metal content defined as underground mineral reserves is derived from material located below the mineral resource pit shell. Open-pit mineral resources exclude material reported as underground mineral reserves.
(8) Qualified person
The preparation of New Gold's mineral reserve and mineral resource estimates has been done by qualified persons as defined under NI 43-101, under the oversight and review of Mark A. Petersen, a qualified person under NI 43-101.
Technical information
The scientific and technical information contained herein has been reviewed and approved by Mr. Petersen, vice-president, exploration, of New Gold, except for the scientific and technical information regarding capital costs at Rainy River set out under the heading "projects update -- Rainy River," which has been reviewed and approved by Arshya Qureshi, co-founder and project manager at LQ Consulting and Management Inc. Mr. Qureshi is a professional engineer registered with the Professional Engineers of Ontario. Mr. Petersen is an SME registered member, AIPG certified professional geologist. Mr. Petersen and Mr. Qureshi are qualified persons for the purposes of NI 43-101.
For additional technical information on New Gold's material properties, including a detailed breakdown of mineral reserves and mineral resources by category, as well as key assumptions, limits and risks, refer to New Gold's annual information form for the year ended Dec. 31, 2015, filed on SEDAR.
(1) All-in sustaining costs
All-in sustaining costs per ounce are a non-generally accepted accounting principle financial measure. Consistent with guidance announced in 2013 by the World Gold Council, an association of various gold mining companies from around the world, of which New Gold is a member, New Gold defines all-in sustaining costs per ounce as the sum of total cash costs, capital expenditures that are sustaining in nature, corporate general and administrative costs, capitalized and expensed exploration that is sustaining in nature, and environmental reclamation costs, all divided by the ounces of gold sold to arrive at a per-ounce figure. New Gold believes this non-GAAP financial measure provides further transparency into costs associated with producing gold and assists analysts, investors and other stakeholders of the company in assessing the company's operating performance, its ability to generate free cash flow from current operations and its overall value. These data are furnished to provide additional information and are a non-GAAP financial measure. All-in sustaining costs presented do not have a standardized meaning under international financial reporting standards and may not be comparable with similar measures presented by other mining companies. It should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS and is not necessarily indicative of cash flow from operations under IFRS or operating costs presented under IFRS. Further details regarding historical all-in sustaining costs and a reconciliation to the nearest IFRS measures are provided in management's discussion and analysis accompanying New Gold's financial statements filed from time to time on SEDAR.
Sustaining costs is a non-GAAP financial measure. New Gold defines sustaining costs as the difference between all-in sustaining costs and total cash costs, being the sum of net capital expenditures that are sustaining in nature, corporate general and administrative costs, capitalized and expensed exploration that is sustaining in nature, and environmental reclamation costs. Management uses sustaining costs to understand the aggregate net result of the drivers of all-in sustaining costs other than total cash costs. The line items between cash costs and all-in sustaining costs in the attached tables break down the components of sustaining costs. Sustaining costs are intended to provide additional information only and do not have any standardized meaning under IFRS and may not be comparable with similar measures presented by other mining companies. It should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
(2) Total cash costs
Total cash costs per ounce are a non-GAAP financial measure, which is calculated in accordance with a standard developed by the Gold Institute, a worldwide association of suppliers of gold and gold products that ceased operations in 2002. Adoption of the standard is voluntary, and the cost measures presented may not be comparable with other similarly titled measures of other companies. New Gold reports total cash costs on a sales basis. The company believes that certain investors use this information to evaluate the company's performance and ability to generate liquidity through operating cash flow to finance future capital expenditures and working capital needs. This measure, along with sales, is considered to be a key indicator of the company's ability to generate operating earnings and cash flow from its mining operations. Total cash costs include mine site operating costs such as mining, processing and administration costs, royalties, production taxes, and realized gains and losses on fuel contracts, but are exclusive of amortization, reclamation, capital and exploration costs, and net of byproduct sales. Total cash costs are then divided by ounces of gold sold to arrive at a per-ounce figure. Co-product cash costs remove the impact of other metal sales that are produced as a byproduct of gold production and apportion the cash costs to each metal produced on a percentage of revenue basis, and subsequently divide the amount by the total ounces of gold or silver or pounds of copper sold, as the case may be, to arrive at per-ounce or per-pound figures. Unless otherwise indicated, all total cash cost information in this news release is net of byproduct sales. These data are furnished to provide additional information and are a non-GAAP financial measure. Total cash costs and co-product cash costs presented do not have a standardized meaning under IFRS and may not be comparable with similar measures presented by other mining companies. It should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS and is not necessarily indicative of cash flow from operations under IFRS or operating costs presented under GAAP. Further details regarding historical total cash costs and a reconciliation to the nearest IFRS measures are provided in the MD&A accompanying New Gold's financial statements filed from time to time on SEDAR.
(3) Cash generated from operations before changes in working capital
Cash generated from operations before changes in working capital is a non-GAAP financial measures, with no standard meaning under IFRS, and excludes changes in non-cash operating working capital. Management uses this measure to evaluate the company's ability to generate cash from its operations before temporary working capital changes. Further details regarding cash generated from operations before changes in working capital and a reconciliation to the nearest IFRS measure are provided in the MD&A accompanying New Gold's financial statements filed from time to time on SEDAR.
(4) Adjusted net (loss)/earnings
Adjusted net (loss)/earnings and adjusted net (loss)/earnings per share are non-GAAP financial measures. Net (loss)/earnings have been adjusted and tax affected for the group of costs in other gains and losses on the condensed consolidated income statement. The adjusted entries are also impacted for tax to the extent that the underlying entries are impacted for tax in the unadjusted net (loss)/earnings from continuing operations. The company uses this measure for its own internal purposes. Management's internal budgets and forecasts and public guidance do not reflect fair value changes on senior notes and non-hedged derivatives, foreign currency translation and fair value through profit or loss, and financial asset gains/losses.
Consequently, the presentation of adjusted net earnings and adjusted net earnings per share enables investors and analysts to better understand the underlying operating performance of the company's core mining business through the eyes of management. Management periodically evaluates the components of adjusted net earnings and adjusted net earnings per share based on an internal assessment of performance measures that are useful for evaluating the operating performance of the company's business and a review of the non-GAAP measures used by mining industry analysts and other mining companies. Adjusted net (loss)/earnings and adjusted net (loss)/earnings per share are intended to provide additional information only and do not have any standardized meaning under IFRS and may not be comparable with similar measures presented by other companies. They should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The measures are not necessarily indicative of operating profit or cash flows from operations as determined under IFRS.
(5) Average realized price
Average realized price per ounce or pound sold is a non-GAAP financial measure with no standard meaning under IFRS. Management uses this measure to better understand the price realized in each reporting period for gold, silver and copper sales. Average realized price is intended to provide additional information only and does not have any standardized definition under IFRS. It should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Other companies may calculate this measure differently, and this measure is unlikely to be comparable with similar measures presented by other companies. Further details regarding average realized price and a reconciliation to the nearest IFRS measure are provided in the MD&A accompanying New Gold's financial statements filed from time to time on SEDAR.
(6) Operating margin
Operating margin is a non-GAAP financial measure with no standard meaning under IFRS, which management uses to evaluate the company's aggregated and mine-by-mine contribution to net earnings before non-cash depreciation and depletion charges.
CONSOLIDATED INCOME STATEMENTS
(in millions of U.S. dollars, except per-share amounts)
Three months ended Dec. 31, Year ended Dec. 31,
2016 2015 2016 2015
Revenues $170.3 $199.0 $683.8 $712.9
Operating expenses 114.7 116.4 365.8 419.6
Depreciation and depletion 67.5 74.1 255.4 240.7
------- ------- ------- -------
Revenue less cost of goods sold (11.9) 8.5 62.6 52.6
Corporate administration 6.4 3.7 22.9 20.4
Provision for office consolidation - - - 3.0
Share-based payment expenses 0.5 1.6 8.3 7.3
Asset impairment 6.4 20.1 6.4 20.1
Exploration and business development 3.9 1.7 10.1 6.5
------- ------- ------- -------
Earnings (loss) from operations (29.1) (18.6) 14.9 (4.7)
Finance income 0.7 0.4 1.4 1.4
Finance costs (1.5) (7.1) (10.5) (38.5)
Net other losses 13.0 (15.0) (3.8) (266.5)
------- ------- ------- -------
Earnings (loss) before taxes (16.9) (40.3) 2.0 (308.3)
Income tax recovery (3.0) 30.8 0.7 106.9
------- ------- ------- -------
Net earnings (loss) (19.9) (9.5) 2.7 (201.4)
------- ------- ------- -------
Earnings (loss) per share
Basic (0.04) (0.02) 0.01 (0.40)
Diluted (0.04) (0.02) 0.01 (0.40)
We seek Safe Harbor.
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