(All dollar figures are in US dollars unless otherwise indicated)

TORONTO, Oct. 25, 2017 /CNW/ - New Gold Inc. ("New Gold") (TSX:NGD) (NYSE American:NGD) today announces its 2017 third quarter results and provides an update on the start-up of the company's Rainy River Mine.

As the company began a process for the sale of its Peak Mines located in Australia, and expects a sale of the asset within the next few months, Peak Mines has been classified as a discontinued operation. The below operational and financial results are disclosed on a continuing basis and thus exclude Peak Mines (unless otherwise noted).

2017 Third Quarter Highlights

Rainy River successfully achieved start-up on September 14, 2017 with the first gold pour announced on October 6, 2017
Commercial production successfully achieved in mid-October, ahead of plan
Amendment to Schedule 2 of the Metal Mining Effluent Regulations required to close two small creeks and deposit tailings, became effective on September 27, 2017
Gold production of 82,027 ounces and copper production of 26.0 million pounds (includes Peak Mines)
Operating expense from continuing operations of $601 per gold ounce and $1.30 per copper pound
All-in sustaining costs(1) of $792 per ounce, including total cash costs(2) of $339 per ounce
Cash generated from operations of $66 million, or $0.11 per share
Cash generated from operations before changes in non-cash operating working capital(3) of $61 million
Net earnings of $27 million, or $0.05 per share
Adjusted net earnings(4) of $4 million, or $0.01 per share
September 30, 2017 cash and cash equivalents of $207 million
Entered into copper price option contracts covering approximately 60 million pounds of 2018 production ensuring a guaranteed floor price of $3.00 per pound while providing continued exposure to increases in the copper price up to $3.37 per pound


"We are pleased to report that we continued to deliver on our priorities in the third quarter," stated Hannes Portmann, President and Chief Executive Officer. "Rainy River began processing ore in September and, since the end of the quarter, has achieved commercial production, ahead of plan. At the same time, our producing mines continued to deliver operationally which enabled us to generate $66 million in quarterly cash flow."



"We are proud that the Rainy River Mine has delivered on all of the major development and start-up milestones that our team established in January," added Mr. Portmann. "As Rainy River has now joined our portfolio of operating mines, our team's focus shifts to operational execution and optimization of both the near and long-term mine plan."



Rainy River

As planned, New Gold's Rainy River Mine commenced processing ore on September 14, 2017 and subsequently announced its first gold pour on October 6, 2017. Commercial production was achieved in mid-October. From an accounting perspective, the company recognizes commercial production effective November 1, 2017. The capital cost estimate remains in line with New Gold's updated plan announced on January 30, 2017.

Rainy River – 2017 Third Quarter Highlights

Rainy River successfully achieved start-up on September 14, 2017 with the first gold pour announced on October 6, 2017
Commercial production achieved ahead of schedule in mid-October
Project spending during the third quarter totalled $130 million, with estimated remaining development capital in 2017 of approximately $100 million, which includes project working capital post commercial production
Amendment to Schedule 2 of the Metal Mining Effluent Regulations required to close two small creeks and deposit tailings, became effective on September 27, 2017
Mining rate during the quarter averaged approximately 130,000 tonnes per day
Mining rate averaged approximately 135,000 tonnes per day in the month of October
Construction of the process plant is fully complete
Overall earthworks substantially complete


Mining activities at Rainy River progressed well during the third quarter. The company's mining rate during the quarter averaged approximately 130,000 tonnes per day, which was in line with New Gold's plan. This represents a 13% increase compared to the average mining rate of 115,000 tonnes per day in the second quarter of 2017 and more importantly, the mining rate in October averaged approximately 135,000 tonnes per day.

Installation of mechanical, piping, electrical and instrumentation in processing facilities has been fully completed, with start-up of the process plant successfully achieved on September 14, 2017. All construction related activity in the process plant is complete.

Overall earthworks are over 98% complete and are tracking in line with New Gold's plan. The start-up cell of the tailings management area has been fully completed. Based on its location and scale, the start-up cell provides capacity for approximately six months of production tailings with the mill operating at full capacity.

The amendment to Schedule 2 of the Metal Mining Effluent Regulations required to close two small creeks and deposit tailings became effective on September 27, 2017. In addition, New Gold has finalized the engineering design to construct the creek closures using sheet pile at the centre of the portion of the dam which will cover the creeks. The purpose of this approach is both to reduce the construction time and, most importantly, to be able to complete the work regardless of weather conditions. New Gold has met with the Ontario Ministry of Natural Resources and Forestry to review the design and the permit amendment and support of the design was received in the third quarter of 2017.

Project spending at Rainy River during the third quarter totalled $130 million with estimated remaining development capital of approximately $100 million, which includes project working capital post commercial production.

2017 Third Quarter and Year-to-Date Operational Results

New Gold's third quarter gold production of 82,027 ounces (including Peak Mines) was below 2016 as higher production from the company's Mesquite Mine was offset by planned lower production at New Afton, Peak Mines and Cerro San Pedro. Cerro San Pedro's production decreased as the mine transitioned into residual leaching in June 2016. Quarterly copper production of 26.0 million pounds and silver production of 0.3 million ounces both remained in line with the third quarter of 2016.

Third quarter operating expense per gold ounce of $601 increased relative to the prior-year quarter due to a higher proportion of sales from Mesquite. The company delivered third quarter all-in sustaining costs from continuing operations of $610 per ounce, including total cash costs from continuing operations of $204 per ounce. All-in sustaining costs from all operations were $792 per ounce, including total cash costs from all operations of $339 per ounce. The increase in all-in sustaining costs from all operations relative to the prior-year quarter was attributable to a $4 million, or $121 per ounce, increase in the company's consolidated sustaining costs, which include New Gold's cumulative sustaining capital, exploration, general and administrative, and amortization of reclamation expenditures. This was partially offset by an $11 per ounce decrease in total cash costs from all operations to $339 per ounce. All-in sustaining costs from continuing operations were positively impacted by the exclusion of Peak Mines.

For the nine-month period ended September 30, 2017, New Gold's gold production of 276,418 ounces (including Peak Mines) was below 2016 as higher production from the company's Mesquite Mine was offset by planned lower production from New Afton, Peak Mines and Cerro San Pedro. Year-to-date copper production and silver production both remained in line with the prior-year period.

Year-to-date operating expense per gold ounce of $603 increased relative to the prior year due to a higher proportion of sales from Mesquite. For the nine-month period ended September 30, 2017, the company delivered all-in sustaining costs from continuing operations of $614 per ounce, including total cash costs from continuing operations of $245 per ounce. All-in sustaining costs from all operations were $706 per ounce, including total cash costs from all operations of $332 per ounce. All-in sustaining costs from continuing operations were positively impacted by the exclusion of Peak Mines.

As a result of the company's strong first nine-month operational results, New Gold reiterates its guidance for full-year gold production of 380,000 to 430,000 ounces (includes Peak Mines). As Peak Mines has been classified as a discontinued operation, the company's operating expense per gold ounce sold is projected to be approximately $40 per ounce lower than its original guidance range of $630 to $670. The company expects an increase in gold production to occur in the fourth quarter, as Rainy River has transitioned into operation. Assuming current commodity prices and foreign exchange rates, New Gold expects to meet the high end of the previously lowered guidance range for all-in sustaining costs of $760 to $800 per ounce. Due to the reclassification of capital expenditures related to the construction of the tailings management area from non-sustaining to sustaining, and one-time share-based payments related to the company's participation agreements with its Indigenous partners, the company expects Rainy River's all-in sustaining cost guidance for the fourth quarter operating period to increase by approximately $200 per ounce.

read more on
http://www.newgold.com/investors/NewGoldNews/PressReleaseDetail/2017/New-Gold-Announces-2017-Third-Quarter-Results-Rainy-River-Mine-Achieves-Commercial-Production-Ahead-of-Schedule/default.aspx