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New Gold Inc
Symbol C : NGD
Shares Issued 578,748,338
Close 2019-01-07 C$ 1.28
Recent Sedar Documents

New Gold produces 315,483 oz Au in 2018

2019-01-08 06:52 ET - News Release

Mr. Renaud Adams reports

NEW GOLD REPORTS STRONG FOURTH QUARTER

New Gold Inc. has released strong fourth quarter operating results from the Rainy River and New Afton mines, with Rainy River achieving annual revised gold production guidance and New Afton exceeding annual gold production guidance as well as achieving the high end of annual copper production guidance. All amounts are in U.S. dollars unless otherwise indicated.

Fourth quarter and recent operational highlights:

  • Total gold production for the quarter was 110,559 ounces and 455,448 ounces for the year, including 97,428 ounces and 315,483 ounces, respectively, from continuing operations (1).
  • The Rainy River mine reported best-ever quarterly gold production of 77,202 ounces, a 39-per-cent increase over the prior quarter. The stronger operational performance achieved in September continued into the fourth quarter with the last four months of the year contributing 45 per cent of the 227,284 ounces produced for the year, achieving revised annual guidance.
  • The New Afton mine delivered another solid quarter with gold production of 18,778 ounces, contributing to annual production of 77,329 ounces, which exceeded the high end of annual guidance. New Afton produced 20.8 million pounds of copper for the quarter and 85.1 million pounds for the year, achieving the high end of annual guidance.
  • During the quarter, mine closure activities continued at the Cerro San Pedro mine and 1,448 gold ounces were recovered from residual leaching of the heap leach pads.
  • Consistent with the renewed vision of repositioning the Rainy River mine for long-term success, the company has adopted a disciplined approach to capital allocation as well as mine life optimization. Accordingly, management has deferred the 2019 underground mine development plan to 2020. During 2019, the company will launch a comprehensive review that includes alternative underground mining scenarios with the overall objective of reducing capital and improving the return on investment for the underground portion of the life of mine. Further details will be provided in the 2019 guidance press release, scheduled for release in the second half of January.
  • An internally financed development strategy for the New Afton C zone has been launched, which will extend mine life to 2030 with robust economics. Further details will be provided in the 2019 guidance press release, scheduled for release in the second half of January.

"We are pleased to report a strong fourth quarter at both Rainy River and New Afton. It is encouraging to see the improvement in overall performance achieved at Rainy River in the final four months of the year. This marks a pivotal turning point for Rainy River as we reposition the asset for long-term success. The stronger production delivered during these months allowed the operation to comfortably meet revised annual production guidance. The New Afton mine reported solid quarter-over-quarter results throughout the year and exceeded annual gold production guidance while meeting the high end of annual copper production guidance," stated Renaud Adams, chief executive officer. "We begin 2019 on a positive note and we expect to build on the successes achieved at Rainy River in 2019 with a disciplined strategy of driving operational and cost-efficiencies throughout the operation. It is with a renewed commitment that we have relaunched a development strategy for the New Afton C zone which will significantly extend the mine life of this core asset and unlock its long-term value potential. We look forward to delivering positive results from both our core assets to create sustainable shareholder value."

(1) Continuing operations include the Rainy River, New Afton and Cerro San Pedro mines.

                        FOURTH QUARTER AND ANNUAL PRODUCTION HIGHLIGHTS
  
Gold produced (oz)              Q1 2018   Q2 2018  Q3 2018   Q4 2018      2018      2018 guidance

Rainy River                      39,325    55,219   55,538    77,202   227,284    210,000-250,000
New Afton                        19,998    18,637   19,916    18,778    77,329      55,000-65,000
Cero San Pedro                    4,448     2,895    2,079     1,448    10,870      10,000-15,000
Total produced -- continuing
operations (1) (oz)              63,771    76,751   77,533    97,428   315,483    275,000-330,000
Mesquite (2)                     33,111    31,799   36,492    13,131   114,533    140,000-150,000
Peak (3)                         25,433         -        -         -    25,433                N/A
Total gold produced (oz)        122,315   108,550  114,025   110,559   455,448    415,000-480,000

Copper produced (mlb)             Q1 18     Q2 18    Q3 18     Q4 18      2018      2018 guidance

New Afton                          22.2      20.4     21.7      20.8      85.1              75-85
Total produced -- continuing
operations (1) (mlb)               22.2      20.4     21.7      20.8      85.1              75-85
Peak (3)                            4.4         -        -         -       4.4                N/A
Total copper produced (mlb)        26.6      20.4     21.7      20.8      89.5              75-85

(1) Continuing operations include the Rainy River, New Afton and Cerro San Pedro mines.
(2) The company completed the sale of the Mesquite mine on Oct. 30, 2018.           
(3) The company completed the sale of Peak mines in early April 2018.

                     RAINY RIVER MINE OPERATIONAL HIGHLIGHTS
  
Rainy River mine                      Q1 2018   Q2 2018    Q3 2018    Q4 2018          2018

Tonnes mined per day
(ore and waste)                       112,432   107,416    102,290    111,507       108,392
Ore tonnes mined per day               36,296    36,043     30,439     32,054        33,687
Strip ratio (waste:ore)                   2.1      1.98       2.36       2.48          2.22
Tonnes milled per calendar day         17,534    16,549     16,962     20,668        17,934
Tonnes milled run rate (1)             22,771    22,364     22,318     25,835        23,291
Gold grade milled (g/t)                  1.08      1.24       1.21       1.42          1.25
Gold recovery (%)                         81%       87%        87%        89%           86%
Mill availability (%)                     77%       74%        76%        80%           77%
Gold production (oz)                   39,325    55,219     55,538     77,202       227,284

(1) Run rate is defined by (total tonnes milled/mill availability)/calendar days.
  

  • In the first full year of operations, Rainy River's safety performance continued to improve throughout the year with the mine reporting a 0.93 total reported injury frequency rate (TRIFR) by the end of the year, as compared with 2.94 in 2017.
  • During the fourth quarter, the Rainy River mine reported continued improvement in overall operational performance and delivered the best-ever quarterly gold production of 77,202 ounces (66,123 ounces sold) and 227,284 ounces (214,804 ounces sold) for the year, achieving revised annual guidance.
  • The mill run rate averaged 25,835 tonnes per day for the quarter, the first full quarter in which the mill averaged a daily run rate above the target 24,000 tonnes per day. Milling operations were suspended for approximately 10 days during the quarter in order to repair the semi-autogenous grinding (SAG) mill starter and to address the ball mill trunnion, which will be replaced during the first quarter of 2019.
  • Mill gold recovery for the quarter was 89 per cent. During the quarter, considerable efforts were deployed to improve the carbon regeneration and stripping circuits, allowing for an improved overall recovery of more than 90 per cent during the second half of December. Mill recoveries are expected to continue to improve over the next two quarters as continuing mill upgrades and the optimization of the grinding circuit are completed.
  • A total of 10.3 million ex-pit tonnes were mined during the quarter, for an average of 111,507 tonnes per day, including 2.53 million tonnes of medium- and high-grade ore.
  • Grade reconciliation for the quarter continued to be in line with the resource and dig-shape models, providing additional confidence in the deposit.
  • Consistent with the renewed vision of repositioning the Rainy River mine for long-term success, the company has adopted a disciplined approach to capital allocation as well as mine life optimization and accordingly, management has deferred the 2019 underground mine development plan to 2020. During 2019, the company will launch a comprehensive review that includes alternative underground mining scenarios with the overall objective of reducing capital and improving the return on investment for the underground portion of the life of mine. Further details will be provided in the 2019 guidance press release, scheduled for release in the second half of January.

                          NEW AFTON MINE OPERATIONAL HIGHLIGHTS
  
New Afton mine               Q1 2018    Q2 2018      Q3 2018      Q4 2018          2018

Underground mine tpd          16,751     13,654       17,105       17,099        16,156
Gold grade milled (g/t)         0.57       0.50         0.55         0.51          0.53
Gold recovery (%)               84.1       85.5         84.7         83.5          84.5
Gold production (oz)          19,998     18,637       19,916       18,778        77,329
Copper grade milled (%)         0.94       0.82         0.89         0.82          0.87
Copper recovery (%)             83.2       83.8         83.0         83.0          83.2
Copper production (mlb)         22.2       20.4         21.7         20.8          85.1

  • The New Afton mine achieved a significant safety milestone in late December reaching one million person hours without lost-time injury.
  • The mine produced 18,778 gold ounces for the quarter and 77,329 ounces for the year, exceeding the high end of annual guidance. Copper production for the quarter was 20.8 million pounds and 85.1 million pounds for the year, reaching the high end of annual guidance.
  • An ore segregation strategy commenced during the quarter and was further enhanced with the recent commissioning of an ore scanner, which is expected to increase overall mill grade.
  • The initial phase of a two-phase mill upgrade to address supergene ore recovery was completed on time and on budget during the quarter, which included the installation of pressure jigs and a magnetic separator with commissioning currently under way. The second phase of the planned upgrade will be launched during the first quarter of 2019 with commissioning scheduled for the third quarter.
  • An internally financed development strategy for the New Afton C zone has been launched. The development of the C zone would provide mine life extension to 2030 with robust economics. Further details will be provided in the upcoming 2019 guidance press release scheduled for release in the second half of January.

Corporate highlights:

  • The sale of the Mesquite mine was completed in the quarter for gross proceeds of $158-million, providing enhanced liquidity to advance the company's short-term operational plan.
  • Rob Chausse was appointed as chief financial officer effective Nov. 5, 2018. Mr. Chausse brings more than 25 years of international finance experience exclusively in the mining sector that enhances the collective experience of the leadership team.
  • On Dec. 11, 2018, the company announced a restructuring of the senior leadership team to better align the corporate structure with the smaller asset base of two operating assets, the Rainy River and New Afton mines, as well as the Blackwater project.

Upcoming news:

  • 2019 guidance (second half of January);
  • Fourth quarter financial results and updated reserves and resources (before market Feb. 14);
  • First quarter 2019 production preview (mid-April).

About New Gold Inc.

New Gold is a Canada-focused intermediate gold mining company. The company has a portfolio of two core producing assets in top-rated jurisdictions, the Rainy River and New Afton mines in Canada. The company also operates the Cerro San Pedro mine in Mexico (which transitioned to residual leaching in 2016). In addition, New Gold owns 100 per cent of the Blackwater project located in Canada.

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