TORONTO--(BUSINESS WIRE)-- New Gold Inc. (“New Gold” or the “Company”) (TSX and NYSE American: NGD) reports in-line second quarter operating results from the Rainy River and New Afton Mines. The Company remains on track to achieve annual production guidance. The Company maintained its liquidity position of approximately $400 million, which supports the implementation of the short-term operational plan. (All amounts are in US dollars unless otherwise indicated.)
Second Quarter and Recent Operational Highlights
Total production (excluding production from the Cerro San Pedro Mine) for the second quarter was 132,556 gold equivalent ounces (85,216 ounces of gold, 151,305 ounces of silver and 21.6 million pounds of copper). For the six-month period, production was 255,820 gold equivalent ounces (164,614 ounces of gold, 287,818 ounces of silver and 41.1 million pounds of copper). Production is on track to meet annual guidance of 465,000 to 520,000 gold equivalent ounces.
The Rainy River Mine reported gold equivalent production of 66,765 ounces (66,013 ounces of gold and 66,157 ounces of silver) for the quarter. For the six-month period, production was 129,043 gold equivalent ounces (127,570 ounces of gold and 126,540 ounces of silver). Production is on track to meet annual guidance of between 250,000 and 275,000 gold equivalent ounces.
The New Afton Mine delivered gold equivalent production of 65,791 ounces (19,203 ounces of gold and 21.6 million pounds of copper). For the six-month period, production was 126,777 gold equivalent ounces (37,044 ounces of gold and 41.1 million pounds of copper). Production is on track to meet annual guidance of between 215,000 to 245,000 gold equivalent ounces.
As of the end of the quarter, the Company maintained its available liquidity of approximately $400 million, including $110 million in cash and cash equivalents, which supports the implementation of the short-term operational plan.
“I am very pleased with the results achieved in the quarter, which is the third consecutive quarter of in-line results. Significant advancements have been made at Rainy River with the mill achieving its throughput, recovery and availability targets. We are excited to enter the next phase of optimization that will focus on controlling and reducing costs while we complete capital projects, positioning the operation for efficient and sustainable mining.” stated Renaud Adams, CEO, “The New Afton Mine reported another strong quarter of operating results and the team continued to advance the development of the C-Zone. Our liquidity position remains consistent with the prior quarter, which is particularly impressive considering the construction capital spend and the operational repositioning at the Rainy River Mine.”
Second Quarter Production Highlights
Gold Equivalent Produced1 (oz) Q2 2019 H1 2019 2019 Guidance
Rainy River 66,765 129,043 250,000 – 275,000
New Afton 65,791 126,777 215,000 – 245,000
Total Production 132,556 255,820 465,000 - 520,000
Gold Produced (oz) Q2 2019 H1 2019
Rainy River 66,013 127,570 245,000 – 270,000
New Afton 19,203 37,044 55,000 - 65,000
Total Production 85,216 164,614 300,000 – 335,000
Copper Produced (Mlbs) Q2 2019 H1 2019
New Afton Copper Produced (Mlbs) 21.6 41.1 75 – 85
1. Gold equivalent ounces include silver and copper ounces produced converted to a gold equivalent based on a ratio of the average spot market prices for the commodities for each period. All copper is produced by the New Afton Mine. The ratio for Q2 2019 was calculated based on average spot market prices of $1,310 per gold ounce, $14.89 per silver ounce and $2.77 per copper pound. The ratio for 2019 Guidance was calculated based on spot price assumptions of $1,300 per gold ounce, $16.00 per silver ounce and $2.75 per copper pound.
Rainy River Mine Operational Highlights
Rainy River Mine Q1 18 Q2 18 Q3 18 Q4 18 Q1 2019 Q2 2019
Tonnes mined per day (ore and waste) 112,432 107,416 102,290 111,507 111,679
Ore tonnes mined per day 36,296 36,043 30,439 32,054 15,739 21,368
Operating waste tonnes per day 54,321 43,570 23,333 67,406 62,955 82,488
Capitalized waste tonnes per day 21,816 27,802 48,518 12,047 32,986 10,688
Total waste tonnes per day 76,137 71,372 71,851 79,453 95,941 93,176
Strip ratio (waste:ore) 2.1 1.98 2.36 2.48 6.10 4.36
Tonnes milled per calendar day 17,534 16,549 16,962 20,668 19,725 21,117
Gold grade milled (g/t) 1.08 1.24 1.21 1.42 1.19 1.15
Gold recovery (%) 81 87 87 89 90 93
Mill availability (%) 77 74 76 80 89 88
Gold production (oz) 39,325 55,219 55,538 77,202 61,557 66,013
Gold eq. production1 (oz) 40,016 55,984 56,275 78,074 62,278 66,765
1. Gold equivalent ounces for Rainy River include silver ounces produced converted to a gold equivalent based on a ratio of the average spot market prices for the commodities for each period. The ratio for Q2 2019 was calculated based on average spot market prices of $1310 per gold ounce and $14.89 per silver ounce and includes 66,157 ounces of silver.
The mine reported gold equivalent production of 66,765 ounces (66,013 ounces of gold and 66,157 ounces of silver) for the quarter, despite the previously disclosed 10-day mill shutdown due to the buildup of water in the Tailings Management Area (TMA) (see May 1, 2019 press release). Ore production during the quarter included planned lower grades as mining operations continued the transition from Phase 1 to Phase 2 of the mine plan. The mine is on track to achieve annual production guidance of between 250,000 to 275,000 gold equivalent ounces.
During the quarter, approximately 1.9 million ore tonnes and 8.5 million waste tonnes (including 1.0 million capitalized waste tonnes) were mined from the open pit at an average strip ratio of 4.36:1. Phase 2 waste stripping was prioritized in the quarter as mining operations were diverted from the phase 1 pit due to low drill availability, excess water at the bottom of the pit early in the quarter, and the planned 27-day outage of the PC8000 shovel for a partial overhaul. Additionally, 2.0 million tonnes of out-pit material were mined during the quarter in preparation for planned dam raises over the balance of the year.
Mill throughput for the quarter averaged 21,117 tonnes per day and achieved a record 24,230 tonnes per day in June, surpassing the target of 24,000 tonnes per day. Milled grades are expected to be lower in the second half of the year as mining operations shift from Phase 1 to Phase 2 due to the depletion of Phase 1 ore.
Mill availability for the quarter averaged 88% (93% in June). Downtime was related to mill upgrades and repairs, including brakes systems on both mills, as well as grid power interruptions due to weather conditions in early June.
Gold recovery significantly improved to average 93% for the quarter as efforts continued to focus on ongoing circuit optimizations.
Construction activities increased during the quarter with the initiation of the Stage 2 dam raises at the TMA. The water treatment plant is near completion, with full commissioning expected in the third quarter. Construction of the maintenance and warehouse facilities will be launched in the third quarter.
During the quarter the Company advanced a comprehensive mine optimization study that includes the review of alternative open pit and underground mining scenarios with the overall objective of improving the return on investment over the life of mine by reducing open pit waste, overall underground development, and sustaining capital. An updated life of mine plan is anticipated to be completed in the fourth quarter.
A strategic exploration drilling program was launched in the second quarter which will test near-mine targets in the Intrepid North area. To date, 2,500 metres (5 holes) of the planned 7,500 metres (15 holes) have been completed. The drilling program is expected to conclude in the third quarter.
New Afton Mine Operational Highlights
New Afton Mine Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19
Tonnes mined per day (ore and waste) 16,751 13,654 17,105 17,099 15,824 16,357
Tonnes milled per calendar day 14,333 14,804 14,518 15,012 14,759 14,992
Gold grade milled (g/t) 0.57 0.50 0.55 0.51 0.50 0.53
Gold recovery (%) 84 86 85 84 83 83
Gold production (oz)19,998 18,637 19,916 18,778 17,841 19,203
Copper grade milled (%) 0.94 0.82 0.89 0.82 0.80 0.86
Copper recovery (%) 83 84 83 83 83 83
Copper production (Mlbs) 22.2 20.4 21.7 20.8 19.5 21.6
Gold equivalent production1 (oz) 73,717 68,340 70,416 67,191 60,986 65,791
1. Gold equivalent ounces for New Afton includes silver ounces and copper pounds produced converted to a gold equivalent based on a ratio of the average spot market prices for the commodities for each period. The ratio for Q2 2019 was calculated based on average spot market prices of $1,310 per gold ounce, $14.89 per silver ounce and $2.77 per copper pound and includes 85,148 ounces of silver.
The mine produced 65,791 gold equivalent ounces for the quarter, including 19,203 ounces of gold, and 21.6 million pounds of copper. The mine is on track to achieve annual production guidance of between 215,000 to 245,000 gold equivalent ounces.
Mining and milling performance were in-line with planned levels for the quarter, achieving 16,357 tonnes mined per day and 14,992 tonnes milled per day, respectively, at gold and copper recoveries of 83%.
The second phase of a planned mill upgrade to address supergene ore recovery advanced during the quarter and is expected to be commissioned in the third quarter.
Development of the B3 and C zones continued to advance in the quarter.
Efforts during the quarter continued to focus on de-risking the execution of the C-Zone project, primarily focusing on the finalization of the tailings disposal plan and advancing permitting efforts with the objective of updating the life of mine plan in the latter part of the year. During the quarter, exploration-heading development towards the C-Zone commenced and advanced by approximately 200 metres.
The New Afton delineation and exploration programs are currently underway and include three key initiatives: 1) underground drilling to delineate and expand mineral resources within the Sub-level cave (“SLC”) Zone located to the east of the planned B3 block cave; 2) underground exploration drilling of the D-Zone target to test the potential for additional mineral resources down plunge of the C-Zone block cave mineral reserve; and 3) surface geophysical and geochemical surveys along the prospective Cherry Creek trend located within three kilometres of the New Afton mill. (see May 29, 2019 press release).
Upcoming News and Events
Q2 Financial Results (before-market August 1)
New Afton and Rainy River Exploration Updates (Q3 2019)
Updated Life of Mine plans for New Afton and Rainy River (Q4 2019)
About New Gold Inc.
New Gold is a Canadian-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% of the Blackwater project located in Canada. New Gold’s objective is to be a leading intermediate gold producer, focused on 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: guidance for production and the factors contributing to those expected results, including throughput and recoveries; planned development and exploration activities and timing for 2019 and future years.
All forward-looking statements in this news release are based on the opinions and estimates of management as of the date such statements are made and are subject to important risk factors and uncertainties, many of which are beyond New Gold’s ability to control or predict. Certain material assumptions regarding such forward-looking statements are discussed in this news release, New Gold’s latest annual management’s discussion and analysis (“MD&A”), Annual etc. etc..
The scientific and technical information contained herein has been reviewed and approved by Eric Vinet, Vice President, Technical Services of New Gold. Mr. Vinet is a Professional Engineer and member of the Ordre des ingénieurs du Québec. He is a "Qualified Person" for the purposes of NI 43-101.
Cautionary Note to U.S. Readers Concerning Estimates of Mineral Reserves and Mineral Resources
Information concerning the properties and operations of New Gold has been prepared in accordance with Canadian standards under applicable Canadian securities laws and may not be comparable to similar information for United States companies. The terms "Mineral Resource", "Measured Mineral Resource", "Indicated Mineral Resource" and "Inferred Mineral Resource" used in this news release are Canadian mining terms as defined in the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") Definition Standards for Mineral Resources and Mineral Reserves adopted by CIM Council on May 10, 2014 and incorporated by reference in National Instrument 43-101. While the terms "Mineral Resource", "Measured Mineral Resource", "Indicated Mineral Resource" and "Inferred Mineral Resource" are recognized and required by Canadian securities regulations, they are not defined terms under standards of the United States Securities and Exchange Commission. As such, certain information contained in this news release concerning descriptions of mineralization and mineral resources under Canadian standards is not comparable to similar information made public by United States companies subject to the reporting and disclosure requirements of the United States Securities and Exchange Commission.
An "Inferred Mineral Resource" has a great amount of uncertainty as to its existence and as to its economic and legal feasibility. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies. It cannot be assumed that all or any part of an "Inferred Mineral Resource" will ever be upgraded to a higher confidence category. Readers are cautioned not to assume that all or any part of an "Inferred Mineral Resource" exists or is economically or legally mineable.
Under United States standards, mineralization may not be classified as a "Reserve" unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve estimation is made. Readers are cautioned not to assume that all or any part of the measured or indicated mineral resources will ever be converted into mineral reserves. In addition, the definitions of "Proven Mineral Reserves" and "Probable Mineral Reserves" under CIM standards differ in certain respects from the standards of the United States Securities and Exchange Commission.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190711005189/en/