- Provides Notice of Release of Second Quarter Financial Results
TORONTO--(BUSINESS WIRE)-- New Gold Inc. (“New Gold” or the “Company”) (TSX and NYSE American: NGD) reports preliminary second quarter results from the Rainy River and New Afton mines. (All amounts are in US dollars unless otherwise indicated.)

During this unprecedented COVID-19 period, the health and safety of our workforce and Indigenous and other communities remains our number one concern. We will support all initiatives that align with that objective and will remain vigilant in providing a safe working environment for our workforce.

Consolidated Second Quarter and Recent Highlights

Total production for the second quarter was 98,079 gold equivalent (gold eq.) ounces (64,294 ounces of gold, 134,282 ounces of silver and 16.9 million pounds of copper).
The Rainy River Mine produced 49,633 gold eq. ounces (48,800 ounces of gold and 70,394 ounces of silver) for the quarter. Following a 12-day voluntary shutdown related to COVID-19 in the first quarter, operations resumed on April 3.
The New Afton Mine produced 48,446 gold eq. ounces (15,494 ounces of gold and 16.9 million pounds of copper) for the quarter.
During the quarter, the Company announced that it entered into a definitive agreement with Artemis Gold Inc. to divest its Blackwater Project for C$190 million in cash, an 8% gold stream and a C$20 million equity stake in Artemis (refer to the Company's June 9, 2020 news release for further information).
During the quarter, the Company completed a $400 million senior notes offering yielding 7.50% due in 2027 that was used, along with cash on hand, to fund the full redemption of its outstanding 6.25% senior notes due in 2022 completed on July 10, 2020 (refer to the Company's June 24, 2020 and July 10, 2020 news releases for further information).
On April 15, 2020 annual guidance was withdrawn until the Company could better understand the impact of COVID-19. Updated annual guidance is expected to be released along with the Company's second quarter financial results on July 30, 2020.
Consolidated Second Quarter Operational Results
Q2 2020 H1 2020
Gold eq. production (ounces)1 98,079 201,514
Gold production (ounces) 64,294 131,084
Copper production (Mlbs) 16.9 35.4
Average realized gold price, per ounce2 1,516 1,485
Average realized copper price, per pound2 2.55 2.56

1. Total gold equivalent ounces include silver and copper produced (excluding production from the Cerro San Pedro Mine) converted to a gold equivalent based on a ratio of $1,500 per gold ounce, $17.75 per silver ounce and $2.85 per copper pound. Throughout the year the Company will report gold equivalent ounces using a constant ratio of those prices. All copper is produced by the New Afton Mine.
2. Refer to the “Non-GAAP Financial Performance Measures" section of this press release.

“Over the past number of quarters, the management team has advanced a disciplined approach aimed at repositioning our operations for profitability and free cash flow generation. As our operational performance improved, we have been able to execute on strategic opportunities to restructure our balance sheet and improve our liquidity position as we enter the next phase of our growth strategy.” said Renaud Adams, CEO. “As our operations return to pre-COVID levels and we complete all non-recurring capital projects at Rainy River, we can now take a longer-term perspective. New Gold's future will be supported by profitable operations, a stronger balance sheet, and as our current hedges expire at year end, we will be fully exposed to the strengthened gold price. We are excited to enter the next stage as we create a Canadian-focused, diversified company that prioritizes profitability and free cash flow generation. We also want to thank the entire New Gold team and our partners for their dedication and hard work during this challenging and unprecedented COVID-19 period as we continue to ensure the safety and well-being of our employees and all our stakeholders.”

Rainy River Mine Highlights
Rainy River Mine
Q2 2020 H1 2020
Gold eq. production (ounces)1 49,633 100,739
Gold eq. sold (ounces) 47,873 101,411
Gold production (ounces) 48,800 99,181
Gold sold (ounces) 47,064 99,846
Average realized gold price, per ounce2 1,514 1,483

1. Gold equivalent ounces for Rainy River in Q2 2020 includes 70,394 ounces of silver converted to a gold equivalent based on a ratio of $1,500 per gold ounce and $17.75 per silver ounce.
2. Refer to the “Non-GAAP Financial Performance Measures" section of this press release.

Rainy River Operating KPI’s

Rainy River Mine FY 2018 Q1 19 Q2 19 Q3 19 Q4 19 Q1 2020 Q2 2020

Tonnes mined per day (ore and waste) 108,392 111,679 114,544 111,078 136,124
127,684 126,512
Ore tonnes mined per day 33,687 15,739 21,368 18,220 19,485 26,012 23,101
Operating waste tonnes per day 47,128 62,955 82,488 75,206 74,020 75,596 72,575
Capitalized waste tonnes per day 25,576 32,986 10,688 17,652 42,619 26,077
30,836
Total waste tonnes per day 74,705 95,941 93,176 92,858 116,639 101,673 103,411
Strip ratio (waste: ore) 2.22 6.10 4.36 5.10 5.99 3.91 4.48
Tonnes milled per calendar day 17,934 19,725 21,117 24,500 22,521 18,441 23,880

Gold grade milled (g/t) 1.25 1.19 1.15 1.14 0.85 1.03 0.78
Gold recovery (%) 86 90 93 91 91 90 89
Mill availability (%) 77 89 88 88 89 91 90
Gold production (oz) 227,284 61,557 66,013 75,080 51,122 50,381 48,800
Gold eq. production1 (oz) 230,349 62,278 66,765 76,092 51,915 51,106 49,633

1. Gold equivalent ounces for Rainy River in Q2 2020 includes 70,394 ounces of silver converted to a gold equivalent based on a ratio of $1,500 per gold ounce and $17.75 per silver ounce.

The Rainy River mine resumed operations on April 3, following a temporary two-week shutdown that allowed the workforce to follow a 14-day period of self-isolation relating to travel outside of Canada related to COVID-19. Following the recent approval by Health Canada, three rapid testing devices were procured and will be rolled out for use in July and August, with the third device exclusively for community use. These devices will initially test for the virus and provide results within three hours of testing, adding another level of protection against the transmission of COVID-19 as we continue to prioritize the safety and well-being of our employees and our local and Indigenous communities.
Early in the second quarter, the mine utilized its local workforce and gradually began to safely reintroduce a portion of the non-local workforce to advance the ramp-up of operations. During the quarter, the open pit averaged approximately 125,000 tonnes per day. Mining productivity increased during the quarter from approximately 100,000 tonnes per day in early April to approximately 140,000 tonnes per day in June, achieving pre-suspension productivity levels. Most of the non-local workforce has now been reintegrated and it is expected that the mine will complete the ramp-up to full capacity early in the third quarter.
For the second quarter, gold eq. production was 49,633 ounces (48,800 ounces of gold and 70,394 ounces of silver), which was lower than plan. Production was impacted by reduced mine productivity as described above, resulting in the processing of a higher than planned proportion of the medium grade ore from stockpile and pit rehandling. The averaged grade processed for the quarter was 0.78 grams per tonne at gold recovery of 89%.
During the quarter, approximately 2.1 million ore tonnes and 9.4 million waste tonnes (including 2.8 million capitalized waste tonnes) were mined from the open pit at an average strip ratio of 4.48:1.
Since the April 3 restart, the mill has ramped up to full capacity, achieving an average run rate of approximately 24,700 tonnes per day, including downtime during the quarter, primarily to complete a liner change as well as other maintenance related to the SAG mill. Mill availability for the quarter averaged 90%, in line with plan.
During the quarter, key capital projects were advanced including a planned tailings dam raise, wick drain installation for stabilization of the east waste dump, final stage construction of the maintenance and warehouse facilities, as well as the commissioning of a bio-chemical reactor (BCR2) to allow clean water discharge. It is expected that all key construction projects will be substantially completed by the end of the third quarter with all planned capital projects expected to be completed by year end. A small portion of the Tailings Management Area (TMA) construction that was originally scheduled for completion in 2021 is now planned for completion in 2020, thereby reducing planned capital requirements for 2021.
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