(All amounts are in U.S. dollars unless otherwise
indicated)
TORONTO, Aug. 4, 2022
/CNW/ - New Gold Inc. ("New Gold" or the "Company") (TSX:
NGD) (NYSE: NGD) reports second quarter results for the
Company as of June 30, 2022. The
Company will host a conference call and webcast today at
8:30 am Eastern Time to discuss the
second quarter consolidated results (details are provided at the
end of this news release). For detailed information, please refer
to the Company's Second Quarter Management's Discussion and
Analysis (MD&A) and Financial Statements that are available on
the Company's website at www.newgold.com and on SEDAR at
www.sedar.com. The Company uses certain non-GAAP financial
performance measures throughout this news release. Please refer to
the "Non-GAAP Financial Performance Measures" section of this news
release and the MD&A for more information. Numbered note
references throughout this news release are to endnotes which can
be found at the end of this news release.
Consolidated Second Quarter Highlights
- Gold equivalent1 ("gold eq.") production for the
quarter of 70,514 ounces (52,431 ounces of gold, 7.4 million pounds
of copper and 117,318 ounces of silver)
- Operating expenses3 of $1,277 per gold eq. ounce
- All-in sustaining costs2 of $2,373 per gold eq. ounce, including total cash
costs2 of $1,296 per gold
eq. ounce
- Average realized gold price2 of $1,879 per ounce and average realized copper
price2 of $4.14 per
pound
- Cash generated from operations of $37
million, or $0.05 per
share
- Cash generated from operations, before changes in non-cash
operating working capital2 of $27
million, or $0.04 per
share
- Net loss of $38 million, or
$0.06 per share
- Adjusted net loss2 of $17
million, or $0.02 per
share
- June 30, 2022 cash and cash
equivalents of $277 million
- During the quarter, the Company provided an update to its 2022
consolidated operational outlook (refer to the Company's
July 11, 2022 news release for
further information)
- During the quarter, the Company successfully completed the
previously announced redemption of its outstanding $100 million aggregate principal amount of its
6.375% Senior Notes due 2025 (refer to the Company's
May 16, 2022 news release for further
information)
"While the operational outlook changes to this year are
unfortunate, our teams remained resilient during a challenging
quarter and I remain confident that we are positioned to have a
stronger second half of the year, and deliver on our updated
guidance," stated Renaud Adams,
President & CEO. "Heavy rainfall and flooding in the quarter
impacted Rainy River's mine plan,
but over the last month, we have made tremendous progress on our
dewatering efforts and mining at the bottom of the pit has resumed.
Our priority for the remainder of the year continues to be on
positioning the open pit operations to their optimal conditions.
Both of our operations also continue to review optimization
opportunities and assess cost reduction initiatives to mitigate
against inflationary challenges experienced across the industry. We
continue to maintain a very healthy balance sheet while also paying
down $100 million of our debt in the
quarter, with no additional debt due until 2027. As we move forward
and look beyond 2022, both of our operations continue to advance
the Company's mid to long-term strategy of increasing production
and decreasing costs, leading to free cash flow generation. I
strongly believe this strategy remains intact. All while we
continue to execute on our drilling programs and assess the
potential of our significant remaining Mineral Resource inventory.
Finally, we have executed on strategic opportunities to secure our
cash position and liquidity profile to enable us to execute on our
short-term capital projects allowing us to unlock the maximum value
at both assets.
At Rainy River, the
objective over the 2022 to 2026 period is to execute a plan that
extracts our remaining open pit Mineral Reserves at the lowest cost
possible, and ramp-up underground operations as incremental ore to
the mill, to maximize free cash flow. Our year-end 2021 open pit
Mineral Reserve estimate at Rainy
River contained approximately 44 million tonnes of ore at
approximately 1 g/t (inclusive of low-grade ore and exclusive of
stockpile material) at an attractive strip ratio of 2.32:1 per the
latest technical report, which has further been reduced at the end
of the second quarter. We are facing the same inflationary
pressures felt by our peers and across the industry, but I remain
positive on several opportunities available to us. The increase in
fuel prices has had the largest impact to Rainy River, and one opportunity to reduce our
fuel consumption is to minimize the amount of rehandling required
to feed the mill by optimizing the in-pit blending strategy to
maximize direct feed which will reduce stockpile movement. Our
current technical report included approximately 22 million tonnes
of ore to be rehandled during the 2022 to 2026 period. Minimizing
this represents a significant opportunity to reduce fuel
consumption, and improve grade at the mill, while reducing our
carbon footprint. Other consumable prices have also increased, and
we continue to evaluate additional opportunities to reduce our
consumption. In the pit, we are improving on pumping, haulage
conditions and other operational delays, all of which will have a
positive impact in the near-term. Sequencing and better timing with
mill operations will be key as we execute our near-term plans.
Recently, we have experienced additional downtime at the mill, and
we are working to address this and reduce our maintenance costs, as
we look to increase our milling capacity moving forward. We
continue to advance the development of the underground Intrepid
zone with mining expected to begin in the fourth quarter. As we
ramp-up Intrepid and incorporate other underground mining zones
located below the pit over the next five years, our production
growth profile at reduced costs remains very attractive with
further potential to convert additional underground Mineral
Resources to Mineral Reserves.
New Afton has historically proven to be a prolific block cave
operation, a low-cost producer, and high free cash flow generator.
We are working to return to these results as we near the completion
of B3 development and continue to advance the C-Zone. With these
new zones in production, we expect to return the asset, from 2024
forward, to years of low sustaining capital and higher grade,
leading to increased production at low costs. Like Rainy River, New Afton has also experienced
inflationary pressures however, mitigation efforts are underway
including the ongoing use of a conveying system and continued
efforts in electrifying the mobile fleet. These efforts should
contribute significantly in reducing fuel consumption and improving
our carbon footprint. Returning the mill to its full capacity
should have a significant impact on reducing processing unit costs
and we continue to assess further optimization opportunities.
Exploration drilling programs continue to advance, with our
priority on adding new higher-grade ore, to improve the mine life.
There remains a meaningful inventory of Mineral Resources outside
of the current mine plan, which could potentially provide further
opportunities to enhance New Afton's mine plan," added Mr.
Adams.
2022 Updated Operational
Outlook
During the quarter, the Company provided an update to its 2022
consolidated operational outlook (refer to the Company's
July 11, 2022 news release for
further information). All other consolidated and mine site capital
investment and exploration estimate guidance, including sustaining
capital and sustaining leases and growth capital, remain
unchanged.
Consolidated
Operational Outlook
|
Revised
Guidance
|
Original
Guidance
|
Gold eq. production
(ounces) 1
|
325,000 -
365,000
|
380,000 -
440,000
|
Gold production
(ounces)
|
260,000 -
290,000
|
295,000 -
335,000
|
Copper production
(Mlbs)
|
25 -
35
|
35 - 45
|
Operating expenses, per
gold eq. ounce3
|
$1,120 -
$1,200
|
$840 - $920
|
All-in sustaining
costs, per gold eq. ounce2
|
$1,875 -
$1,975
|
$1,470 -
$1,570
|
Rainy River
Outlook
|
Revised
Guidance
|
Original
Guidance
|
Gold eq. production
(ounces)1
|
230,000 -
250,000
|
265,000 -
295,000
|
Gold production
(ounces)
|
225,000 -
245,000
|
260,000 -
290,000
|
Operating expenses, per
gold eq. ounce3
|
$960 -
$1,040
|
$730 - $810
|
All-in sustaining
costs, per gold eq. ounce2
|
$1,620 -
$1,720
|
$1,270 -
$1,370
|
New Afton
Outlook
|
Revised
Guidance
|
Original
Guidance
|
Gold eq. production
(ounces)1
|
95,000 -
115,000
|
115,000 -
145,000
|
Gold production
(ounces)
|
35,000 -
45,000
|
35,000 -
45,000
|
Copper production
(Mlbs)
|
25 -
35
|
35 - 45
|
Operating expenses, per
gold eq. ounce3
|
$1,485 -
$1,565
|
$1,100 -
$1,180
|
All-in sustaining
costs, per gold eq. ounce2
|
$2,210 -
$2,310
|
$1,695 -
$1,795
|
Consolidated Financial Highlights
|
Q2
2022
|
Q2
2021
|
H1
2022
|
H1
2021
|
Revenue ($M)
|
115.7
|
198.2
|
290.4
|
363.1
|
Operating expenses
($M)
|
79.8
|
95.2
|
175.0
|
189.1
|
Net (loss) earnings
($M)
|
(37.9)
|
(15.8)
|
(45.7)
|
1.0
|
Net (loss) per share
($)
|
(0.06)
|
(0.02)
|
(0.07)
|
—
|
Adj. net (loss)
earnings ($M)2
|
(16.7)
|
26.7
|
(6.4)
|
34.8
|
Adj. net (loss)
earnings, per share ($)2
|
(0.02)
|
0.04
|
(0.01)
|
0.05
|
Cash generated from
operations ($M)
|
37.4
|
110.3
|
105.2
|
163.7
|
Cash generated from
operations, per share ($)
|
0.05
|
0.16
|
0.15
|
0.24
|
Cash generated from
operations, before changes in non-cash operating working capital
($M)2
|
27.4
|
84.7
|
93.8
|
148.5
|
Cash generated from
operations, before changes in non-cash operating working capital,
per share ($)2
|
0.04
|
0.12
|
0.14
|
0.22
|
- Revenue decreased over the prior-year periods due to lower gold
and copper sales volume, partially offset by higher realized gold
prices. Lower sales in the quarter were impacted by the timing of
concentrate shipments at New Afton of approximately 7,500 gold
eq.1 ounces which have been deferred to the third
quarter, a quarterly impact of approximately $700 and $140 per
gold eq. ounce on New Afton and consolidated all-in sustaining
costs2.
- Operating expenses were lower than the prior-year periods due
to lower gold and copper sales volumes.
- Net loss increased over the prior-year periods primarily due to
lower revenue and a higher loss on revaluation of investments,
partially offset by lower operating expenses and a loss on
revaluation of the New Afton free cash flow interest obligation in
the prior-year periods.
- Adjusted net loss2 increased over the prior-year
periods primarily due to lower revenues.
- Cash generated from operations decreased over the prior-year
periods due to lower revenues.
Consolidated Operational
Highlights
|
Q2
2022
|
Q2
2021
|
H1
2022
|
H1
2021
|
Gold eq. production
(ounces)1
|
70,514
|
105,705
|
158,210
|
201,731
|
Gold eq. sold
(ounces)1
|
62,509
|
104,221
|
155,045
|
196,039
|
Gold production
(ounces)
|
52,431
|
66,989
|
120,532
|
133,639
|
Gold sold
(ounces)
|
51,263
|
68,184
|
121,825
|
131,723
|
Copper production
(Mlbs)
|
7.4
|
18.2
|
15.6
|
32.0
|
Copper sold
(MIbs)
|
4.4
|
16.9
|
13.6
|
30.2
|
Gold revenue, per ounce
($)
|
1,870
|
1,794
|
1,876
|
1,782
|
Copper revenue, per
pound ($)
|
3.97
|
4.14
|
4.17
|
3.91
|
Average realized gold
price, per ounce ($)2
|
1,879
|
1,817
|
1,889
|
1,803
|
Average realized copper
price, per pound ($)2
|
4.14
|
4.43
|
4.41
|
4.17
|
Operating expenses, per
gold eq. ounce ($)3
|
1,277
|
913
|
1,129
|
964
|
Total cash costs, per
gold eq. ounce ($)2
|
1,296
|
977
|
1,161
|
1,019
|
Depreciation and
depletion, per gold eq. ounce ($)3
|
628
|
495
|
569
|
496
|
All-in sustaining
costs, per gold eq. ounce ($)2
|
2,373
|
1,551
|
2,018
|
1,551
|
Sustaining capital and
sustaining leases ($M)2
|
59.9
|
49.2
|
115.4
|
87.1
|
Growth capital
($M)2
|
18.9
|
33.2
|
41.8
|
51.8
|
Total capital and
leases ($M)
|
78.8
|
82.4
|
157.2
|
138.9
|
Rainy River Mine
Operational Highlights
Rainy River
Mine
|
Q2
2022
|
Q2
2021
|
H1
2022
|
H1
2021
|
Gold eq. production
(ounces)1
|
43,759
|
55,163
|
103,654
|
111,676
|
Gold eq. sold
(ounces)1
|
46,781
|
57,304
|
108,464
|
110,881
|
Gold production
(ounces)
|
42,516
|
52,901
|
101,349
|
107,557
|
Gold sold
(ounces)
|
45,517
|
55,062
|
106,152
|
106,857
|
Gold revenue, per ounce
($)
|
1,879
|
1,817
|
1,886
|
1,802
|
Average realized gold
price, per ounce ($)2
|
1,879
|
1,817
|
1,886
|
1,802
|
Operating expenses, per
gold eq. ounce ($)3
|
1,029
|
974
|
983
|
989
|
Total cash costs, per
gold eq. ounce ($)2
|
1,029
|
974
|
983
|
989
|
Depreciation and
depletion, per gold eq. ounce ($)3
|
687
|
670
|
653
|
653
|
All-in sustaining
costs, per gold eq. ounce ($)2
|
1,972
|
1,524
|
1,756
|
1,554
|
Sustaining capital and
sustaining leases ($M)2
|
42.4
|
29.8
|
79.6
|
59.1
|
Growth capital
($M)2
|
2.6
|
3.7
|
7.5
|
5.0
|
Total capital and
leases ($M)
|
45.0
|
33.6
|
87.1
|
64.1
|
Operating Key Performance
Indicators
Rainy River Mine (Open
Pit Mine only)
|
Q2
2022
|
Q2
2021
|
H1
2022
|
H1
2021
|
Tonnes mined per day
(ore and waste)
|
110,153
|
158,556
|
114,381
|
154,683
|
Ore tonnes mined per
day
|
12,295
|
36,256
|
16,136
|
35,970
|
Operating waste tonnes
per day
|
19,560
|
71,124
|
27,337
|
68,399
|
Capitalized waste
tonnes per day
|
78,298
|
51,176
|
70,909
|
50,314
|
Total waste tonnes per
day
|
97,858
|
122,300
|
98,246
|
118,712
|
Strip ratio
(waste:ore)
|
7.96
|
3.37
|
6.09
|
3.30
|
Tonnes milled per
calendar day
|
23,302
|
25,349
|
23,807
|
25,822
|
Gold grade milled
(g/t)
|
0.69
|
0.82
|
0.80
|
0.81
|
Gold recovery
(%)
|
90
|
87
|
92
|
89
|
- Rainy River's priority for the
remainder of the year continues to be on positioning the open pit
operations to its optimal conditions with the team focusing on
operational efficiencies including optimizing the fleet and
advancing our mining at an appropriate rate as the pit gets deeper
and narrower. Significant progress has been made on dewatering the
open pit and mining at the bottom of the pit has resumed and will
continue to ramp-up throughout the year. Concurrently, the
operation continues to make meaningful progress advancing the
underground plan. The Intrepid zone continues to advance on time
and on budget, with initial production expected to begin later this
year. Advancing the underground plan is expected to lead to
increasing production at attractive all-in sustaining costs, and at
current commodity prices should generate strong margins and free
cash flow over the next decade.
- Open pit tonnes mined per day decreased over the prior-year
periods due to the adverse impact from heavy rainfall around the
Fort Frances area in northwestern
Ontario, resulting in flooding in
the Rainy River open pit and impacting the mine plan. Approximately
1.1 million ore tonnes and 8.9 million waste tonnes (including 7.1
million capitalized waste tonnes) were mined from the open pit at
an average strip ratio of 7.96:1. The higher-than-average strip
ratio was a result of limited access to ore zones due to the in-pit
flooding during the quarter, as such, equipment was re-allocated to
advance waste and overburden stripping. The strip ratio is expected
to average approximately 2.1:1 for the remainder of the open pit
life.
- Tonnes milled per calendar day decreased over the prior-year
periods due to extra mechanical maintenance and the processing of
harder ore from the North Lobe. Mining from the North Lobe open pit
is expected to be completed in the first half of 2023.
- Gold eq.1 production was 43,759 ounces (42,516
ounces of gold and 93,210 ounces of silver), a decrease over the
prior-year period primarily due to lower gold grade because of the
use of stockpiled low-grade ore during the quarter. Quarterly gold
grade milled positively reconciled with the reserve model and
approximately 50% of the tonnes milled during the quarter was
low-grade material. For the six-month period ended June 30, 2022, gold eq.1 production
was 103,654 ounces (101,349 ounces of gold and 172,831 ounces of
silver), a decrease over the prior-year period primarily due to
lower tonnes processed.
- Operating expense3 per gold eq. ounce increased over
the prior-year period primarily due to lower sales volume and
inflation-driven price increases of diesel, electricity, grinding
media, and other inputs attributing to the higher unit costs. For
the six-month period ended June 30,
2022, operating expense3 per gold eq. ounce was
in-line with the prior-year period.
- All-in sustaining costs2 per gold eq. ounce
increased over the prior-year periods due to higher sustaining
capital spend and lower sales volume.
- Total capital and leases for the quarter were $45 million, and $87
million for the six-month period ended June 30, 2022, an increase over the prior-year
periods due to higher sustaining capitalized waste mining costs as
a result of the higher strip ratio. Sustaining capital2
during the quarter primarily related to $29
million of capitalized waste, as well as capital
maintenance, and the advancement of the annual tailings dam raise.
Growth capital2 primarily related to the development of
the Intrepid underground zone, which advanced an additional 774
metres during the quarter.
- Free cash flow2 for the quarter ended June 30, 2022, was $0.2
million (net of a $7 million
stream payment), a decrease over the prior-year period due to a
decrease in revenue. Free cash flow2 for the six months
ended June 30, 2022, was $15 million (net of a $13
million stream payment), consistent with the prior-year
period due to an increase in cash generated from operations offset
by an increase in capital expenditures.
New Afton Mine
Operational Highlights
New Afton
Mine
|
Q2
2022
|
Q2
2021
|
H1
2022
|
H1
2021
|
Gold eq. production
(ounces)1
|
26,755
|
50,542
|
54,556
|
90,055
|
Gold eq. sold
(ounces)1
|
15,729
|
46,917
|
46,580
|
85,157
|
Gold production
(ounces)
|
9,916
|
14,088
|
19,183
|
26,082
|
Gold sold
(ounces)
|
5,746
|
13,122
|
15,673
|
24,866
|
Copper production
(Mlbs)
|
7.4
|
18.2
|
15.6
|
32.0
|
Copper sold
(Mlbs)
|
4.4
|
16.9
|
13.6
|
30.2
|
Gold revenue, per ounce
($)
|
1,800
|
1,697
|
1,810
|
1,697
|
Copper revenue, per
ounce ($)
|
3.97
|
4.14
|
4.17
|
3.91
|
Average realized gold
price, per ounce ($)2
|
1,879
|
1,817
|
1,914
|
1,809
|
Average realized copper
price, per pound ($)2
|
4.14
|
4.43
|
4.41
|
4.17
|
Operating expenses, per
gold eq. ounce ($)3
|
2,012
|
840
|
1,469
|
932
|
Total cash costs, per
gold eq. ounce ($)2
|
2,090
|
981
|
1,575
|
1,058
|
Depreciation and
depletion, per gold eq. ounce ($)3
|
441
|
274
|
364
|
284
|
All-in sustaining
costs, per gold eq. ounce ($)2
|
3,222
|
1,402
|
2,355
|
1,396
|
Sustaining capital and
sustaining leases ($M)2
|
17.2
|
19.1
|
35.1
|
27.6
|
Growth capital
($M)2
|
16.3
|
29.5
|
34.3
|
46.7
|
Total capital and
leases ($M)
|
33.5
|
48.7
|
69.4
|
74.3
|
Operating Key Performance
Indicators
New Afton
Mine
|
Q2
2022
|
Q2
2021
|
H1
2022
|
H1
2021
|
Tonnes mined per day
(ore and waste)
|
6,477
|
15,104
|
6,751
|
13,259
|
Tonnes milled per
calendar day
|
11,472
|
13,795
|
10,889
|
13,680
|
Gold grade milled
(g/t)
|
0.37
|
0.43
|
0.37
|
0.41
|
Gold recovery
(%)
|
80
|
80
|
81
|
80
|
Copper grade milled
(%)
|
0.42
|
0.79
|
0.45
|
0.72
|
Copper recovery
(%)
|
78
|
83
|
79
|
82
|
- At New Afton, with the Lift 1 zone and recovery level now
closed, the priority for the remainder of the year is to complete
B3 development and ramp-up production in the fourth quarter.
Additionally, C-Zone development continues to advance with first
production expected to commence in the latter part of 2023. Gold
and copper production are expected to significantly increase during
the C-Zone period, with all-in sustaining costs to significantly
decrease, leading to robust free cash flow during that time.
- Underground tonnes mined per day decreased over the prior-year
periods due to the planned completion of Lift 1 mining activities,
as well as the closure of the low grade-higher cost recovery level
zone in June, earlier than planned. Production ramp-up of the B3
zone continued on schedule during the quarter, with development
expected to be completed by September.
- Tonnes milled per calendar day decreased over the prior-year
periods as planned and is currently incorporating lower grade
surface stockpiles to supplement the overall lower tonnes
mined.
- Gold eq.1 production was 26,755 ounces (9,916 ounces
of gold and 7.4 million pounds of copper), and for the six-month
period ended June 30, 2021, gold
eq.1 production was 54,556 ounces (19,183 ounces of gold
and 15.6 million pounds of copper), a decrease over the prior-year
periods due to lower tonnes processed and lower gold and copper
grades.
- Operating expense3 per gold eq. ounce increased over
the prior-year periods, primarily due to lower sales volume,
inflation-driven price increases, and a $4
million ($250 per gold eq.
ounce in the quarter) non-cash provision related to the write down
of inventory to net realizable value.
- All-in sustaining costs2 per gold eq. ounce
increased over the prior-year periods, primarily due to lower sales
volume, and higher sustaining capital spend for the six-month
period. Sales in the quarter were impacted by timing of concentrate
shipments with approximately 7,500 gold eq.1 ounces
deferred to the third quarter, an impact of approximately
$700 per gold eq. ounce for the
quarter.
- Total capital and leases for the quarter were $34 million, and $69
million for the six-month period ended June 30, 2022, a decrease over the prior-year
periods, primarily due to timing of growth capital spend.
Sustaining capital2 in the quarter primarily related to
B3 mine development and tailings management and stabilization
activities. Growth capital2 in the quarter primarily
related to C-Zone development, which advanced 1,009 metres during
the quarter.
- Free cash flow2 for the quarter and six-month period
ended June 30, 2022 was a net outflow
of $43 million and $76 million, a decrease over the prior-year
periods due to lower revenue.
Second Quarter 2022 Conference
Call and Webcast
- The Company will host a webcast and conference call today at
8:30 am Eastern Time to discuss the
Company's second quarter consolidated results.
- Participants may listen to the webcast by registering on our
website at www.newgold.com or via the following link
https://produceredition.webcasts.com/starthere.jsp?ei=1556145&tp_key=026884e3d6
- Participants may also listen to the conference call by calling
North American toll free 1-888-664-6383, or 1-416-764-8650 outside
of the U.S. and Canada, passcode
67678068
- A recorded playback of the conference call will be available
until September 4, 2022 by calling
North American toll free 1-888-390-0541, or 1-416-764-8677 outside
of the U.S. and Canada, passcode
678068. An archived webcast will also be available at
www.newgold.com.
About New Gold
New Gold is a Canadian-focused intermediate mining company with
a portfolio of two core producing assets in Canada, the Rainy River gold mine and the New
Afton copper-gold mine. The Company also holds approximately 5%
equity stake in Artemis Gold Inc., and other Canadian-focused
investments. New Gold's vision is to build a leading diversified
intermediate gold company based in Canada that is committed to the environment
and social responsibility. For further information on the Company,
visit www.newgold.com.
Endnotes
|
1.
|
Total gold eq. ounces
include silver and copper produced/sold converted to a gold
equivalent. All copper is produced/sold by the New Afton Mine. Gold
eq. ounces for Rainy River in Q2 2022 includes production of 93,210
ounces of silver (94,804 ounces sold) converted to a gold eq. based
on a ratio of $1,800 per gold ounce and $24.00 per silver ounce
used for 2022 guidance estimates. Gold eq. ounces for New Afton in
Q2 2022 includes 7.4 million pounds of copper produced (4.4 million
pounds sold) and 24,108 ounces of silver produced (14,142 ounces of
silver sold) converted to a gold eq. based on a ratio of $1,800 per
gold ounce, $4.00 per copper pound and $24.00 per silver ounce used
for 2022 guidance estimates.
|
|
|
2.
|
"Total cash costs",
"all-in sustaining costs", "adjusted net earnings/(loss)",
"adjusted tax expense", "sustaining capital and sustaining leases",
"growth capital", "cash generated from operations", "free cash
flow", and "average realized gold/copper price per ounce/pound" are
all non-GAAP financial performance measures that are used in this
news release. These measures do not have any standardized meaning
under IFRS and therefore may not be comparable to similar measures
presented by other issuers. For more information about these
measures, why they are used by the Company, and a reconciliation to
the most directly comparable measure under IFRS, see the "Non-GAAP
Financial Performance Measures" section of this news
release.
|
|
|
3.
|
These are supplementary
financial measures which are calculated as follows: "Operating
expenses per gold eq. ounce sold" is total operating expenses
divided by total gold equivalent ounces sold and "depreciation and
depletion per gold eq. ounce sold" is total depreciation and
depletion divided by total gold equivalent ounces sold.
|
Non-GAAP Financial Performance
Measures
Total Cash Costs per Gold eq. Ounce
"Total cash costs per gold equivalent ounce" is a non-GAAP
financial performance measure that is a common financial
performance measure in the gold mining industry but does not have
any standardized meaning under IFRS and therefore may not be
comparable to similar measures presented by other issuers. New Gold
reports total cash costs on a sales basis and not on a production
basis. The Company believes that, in addition to conventional
measures prepared in accordance with IFRS, this measure, along with
sales, is a key indicator of the Company's ability to generate
operating earnings and cash flow from its mining operations. This
measure allows investors to better evaluate corporate performance
and the Company's ability to generate liquidity through operating
cash flow to fund future capital exploration and working capital
needs.
This measure is intended to provide additional information only
and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS. This
measure is not necessarily indicative of cash generated from
operations under IFRS or operating costs presented under IFRS.
Total cash cost figures are 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 to other similarly titled measures
of other companies. Total cash costs include mine site operating
costs such as mining, processing and administration costs,
royalties, and production taxes, but are exclusive of amortization,
reclamation, capital and exploration costs. Total cash costs are
then divided by gold equivalent ounces sold to arrive at the total
cash costs per equivalent ounce sold.
In addition to gold, the Company produces copper and silver.
Gold equivalent ounces of copper and silver produced or sold in a
quarter are computed using a consistent ratio of copper and silver
prices to the gold price and multiplying this ratio by the pounds
of copper and silver ounces produced or sold during that
quarter.
Notwithstanding the impact of copper and silver sales, as the
Company is focused on gold production, New Gold aims to assess the
economic results of its operations in relation to gold, which is
the primary driver of New Gold's business. New Gold believes this
metric is of interest to its investors, who invest in the Company
primarily as a gold mining business. To determine the relevant
costs associated with gold equivalent ounces, New Gold believes it
is appropriate to reflect all operating costs incurred in its
operations.
All-In Sustaining Costs per Gold eq. Ounce
"All-in sustaining costs per gold equivalent ounce" is a
non-GAAP financial performance measure that does not have any
standardized meaning under IFRS and therefore may not be comparable
to similar measures presented by other issuers. New Gold calculates
"all-in sustaining costs per gold equivalent ounce" based on
guidance announced by the World Gold Council ("WGC") in
September 2013. The WGC is a
non-profit association of the world's leading gold mining companies
established in 1987 to promote the use of gold to industry,
consumers and investors. The WGC is not a regulatory body and does
not have the authority to develop accounting standards or
disclosure requirements. The WGC has worked with its member
companies to develop a measure that expands on IFRS measures to
provide visibility into the economics of a gold mining company.
Current IFRS measures used in the gold industry, such as operating
expenses, do not capture all of the expenditures incurred to
discover, develop and sustain gold production. New Gold believes
that "all-in sustaining costs per gold equivalent ounce" provides
further transparency into costs associated with producing gold and
will assist analysts, investors, and other stakeholders of the
Company in assessing its operating performance, its ability to
generate free cash flow from current operations and its overall
value. In addition, the Human Resources and Compensation Committee
of the Board of Directors uses "all-in sustaining costs", together
with other measures, in its Company scorecard to set incentive
compensation goals and assess performance.
"All-in sustaining costs per gold equivalent ounce" is intended
to provide additional information only and does not have any
standardized meaning under IFRS and may not be comparable to
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. The measure is not
necessarily indicative of cash flow from operations under IFRS or
operating costs presented under IFRS.
New Gold defines "all-in sustaining costs per gold equivalent
ounce" as the sum of total cash costs, net of capital expenditures
that are sustaining in nature, corporate general and administrative
costs, capitalized and expensed exploration that is sustaining in
nature, lease payments that are sustaining in nature, and
environmental reclamation costs, all divided by the total gold
equivalent ounces sold to arrive at a per ounce figure. The
"Sustaining Capital Expenditure Reconciliation" table below
reconciles New Gold's sustaining capital to its cash flow
statement. The definition of sustaining versus non-sustaining
is similarly applied to capitalized and expensed exploration costs
and lease payments. Exploration costs and lease payments to develop
new operations or that relate to major projects at existing
operations where these projects are expected to materially increase
production are classified as non-sustaining and are excluded. Gold
equivalent ounces of copper and silver produced or sold in a
quarter are computed using a consistent ratio of copper and silver
prices to the gold price and multiplying this ratio by the pounds
of copper and silver ounces produced or sold during that
quarter.
Costs excluded from all-in sustaining costs are non-sustaining
capital expenditures, non-sustaining lease payments and exploration
costs, financing costs, tax expense, and transaction costs
associated with mergers, acquisitions and divestitures, and any
items that are deducted for the purposes of adjusted earnings.
Sustaining Capital and Sustaining Leases
"Sustaining capital" and "sustaining lease" are non-GAAP
financial performance measures that do not have any standardized
meaning under IFRS and therefore may not be comparable to similar
measures presented by other issuers. New Gold defines "sustaining
capital" as net capital expenditures that are intended to maintain
operation of its gold producing assets. Similarly, a "sustaining
lease" is a lease payment that is sustaining in nature. To
determine "sustaining capital" expenditures, New Gold uses cash
flow related to mining interests from its consolidated statement of
cash flows and deducts any expenditures that are capital
expenditures to develop new operations or capital expenditures
related to major projects at existing operations where these
projects will materially increase production. Management uses
"sustaining capital" and "sustaining lease" to understand the
aggregate net result of the drivers of all-in sustaining costs
other than total cash costs. These measures are intended to provide
additional information only and should not be considered in
isolation or as substitutes for measures of performance prepared in
accordance with IFRS.
Growth Capital
"Growth capital" is a non-GAAP financial performance measure
that does not have any standardized meaning under IFRS and
therefore may not be comparable to similar measures presented by
other issuers. New Gold considers non-sustaining capital costs to
be "growth capital", which are capital expenditures to develop new
operations or capital expenditures related to major projects at
existing operations where these projects will materially increase
production. To determine "growth capital" expenditures, New Gold
uses cash flow related to mining interests from its consolidated
statement of cash flows and deducts any expenditures that are
capital expenditures that are intended to maintain operation of its
gold producing assets. Management uses "growth capital" to
understand the cost to develop new operations or related to major
projects at existing operations where these projects will
materially increase production. This measure is intended to provide
additional information only and should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with IFRS.
The following tables reconcile the above non-GAAP measures to
the most directly comparable IFRS measure on an aggregate
basis.
Consolidated OPEX, Cash Cost and All-in Sustaining Costs
Reconciliation
|
Three months ended
June 30
|
Six months ended
June 30
|
(in millions of U.S.
dollars, except where noted)
|
2022
|
2021
|
2022
|
2021
|
CONSOLIDATED OPEX,
CASH COST AND ALL-IN SUSTAINING COSTS RECONCILIATION
|
|
|
|
|
Operating expenses
|
79.8
|
95.2
|
175.0
|
189.1
|
Gold equivalent ounces
sold1
|
62,509
|
104,221
|
155,045
|
196,039
|
Operating expenses per gold equivalent ounce sold
($/ounce)
|
1,277
|
913
|
1,129
|
964
|
Operating
expenses
|
79.8
|
95.2
|
175.0
|
189.1
|
Treatment and refining
charges on concentrate sales
|
1.2
|
6.7
|
5.0
|
10.8
|
Total cash
costs
|
81.0
|
101.9
|
180.0
|
199.8
|
Gold equivalent ounces
sold1
|
62,509
|
104,221
|
155,045
|
196,039
|
Total cash costs per
gold equivalent ounce sold ($/ounce)2
|
1,296
|
977
|
1,161
|
1,019
|
Sustaining capital
expenditures2
|
56.9
|
46.5
|
109.5
|
81.7
|
Sustaining exploration
- expensed
|
0.2
|
0.1
|
0.4
|
0.3
|
Sustaining
leases2
|
2.6
|
2.7
|
5.2
|
5.4
|
Corporate G&A
including share-based compensation
|
5.2
|
8.2
|
12.1
|
12.0
|
Reclamation
expenses
|
2.4
|
2.4
|
5.7
|
4.7
|
Total all-in
sustaining costs
|
148.3
|
161.7
|
312.9
|
304.0
|
Gold equivalent ounces
sold1
|
62,509
|
104,221
|
155,045
|
196,039
|
All-in sustaining costs per gold equivalent ounce
sold ($/ounce)2
|
2,373
|
1,551
|
2,018
|
1,551
|
|
Three months ended
June 30
|
Six months ended
June 30
|
(in millions of U.S.
dollars, except where noted)
|
2022
|
2021
|
2022
|
2021
|
RAINY RIVER OPEX,
CASH COSTS AND AISC RECONCILIATION
|
|
|
|
|
Operating expenses
|
48.2
|
55.8
|
106.6
|
109.7
|
Gold equivalent ounces
sold1
|
46,781
|
57,304
|
108,464
|
110,881
|
Operating expenses per unit of gold sold
($/ounce)
|
1,029
|
974
|
983
|
989
|
Operating
expenses
|
48.2
|
55.8
|
106.6
|
109.7
|
Total cash costs
|
48.2
|
55.8
|
106.6
|
109.7
|
Gold equivalent ounces
sold1
|
46,781
|
57,304
|
108,464
|
110,881
|
Total cash costs per gold equivalent ounce sold
($/ounce)2
|
1,029
|
974
|
983
|
989
|
Sustaining capital
expenditures2
|
39.9
|
27.4
|
74.8
|
54.2
|
Sustaining
leases2
|
2.3
|
2.4
|
4.6
|
4.9
|
Reclamation
expenses
|
1.9
|
1.8
|
4.5
|
3.5
|
Total all-in sustaining costs
|
92.4
|
87.4
|
190.4
|
172.3
|
Gold equivalent ounces
sold1
|
46,781
|
57,304
|
108,464
|
110,881
|
All-in sustaining costs per gold equivalent ounce
sold ($/ounce)2
|
1,972
|
1,524
|
1,756
|
1,554
|
|
Three months ended
June 30
|
Six months ended
June 30
|
(in millions of U.S.
dollars, except where noted)
|
2022
|
2021
|
2022
|
2021
|
NEW AFTON OPEX, CASH
COSTS AND AISC RECONCILIATION
|
|
|
|
|
Operating expenses
|
31.6
|
39.4
|
68.4
|
79.4
|
Gold equivalent ounces
sold1
|
15,729
|
46,917
|
46,580
|
85,157
|
Operating expenses per unit of gold sold
($/ounce)
|
2,012
|
840
|
1,469
|
932
|
Operating
expenses
|
31.6
|
39.4
|
68.4
|
79.4
|
Treatment and refining
charges on concentrate sales
|
1.2
|
6.7
|
5.0
|
10.8
|
Total cash costs
|
32.8
|
46.1
|
73.4
|
90.2
|
Gold equivalent ounces
sold1
|
15,729
|
46,917
|
46,580
|
85,157
|
Total cash costs per gold equivalent ounce sold
($/ounce)2
|
2,090
|
981
|
1,575
|
1,058
|
Sustaining capital
expenditures2
|
17.1
|
19.0
|
34.8
|
27.3
|
Sustaining
leases2
|
0.1
|
0.1
|
0.3
|
0.3
|
Reclamation
expenses
|
0.6
|
0.6
|
1.3
|
1.2
|
Total all-in sustaining costs
|
50.6
|
65.8
|
109.7
|
119.0
|
Gold equivalent ounces
sold1
|
15,729
|
46,917
|
46,580
|
85,157
|
All-in sustaining costs per gold equivalent ounce
sold ($/ounce)
|
3,222
|
1,402
|
2,355
|
1,396
|
Sustaining Capital Expenditures Reconciliation Table
|
Three months ended
June 30
|
Six months ended
June 30
|
(in millions of U.S.
dollars, except where noted)
|
2022
|
2021
|
2022
|
2021
|
TOTAL SUSTAINING
CAPITAL EXPENDITURES
|
|
|
|
|
Mining interests per
consolidated statement of cash flows
|
76.1
|
79.9
|
151.7
|
133.8
|
New Afton growth
capital expenditures2
|
(16.3)
|
(29.5)
|
(34.3)
|
(46.7)
|
Rainy River growth
capital expenditures2
|
(2.6)
|
(3.7)
|
(7.5)
|
(5.0)
|
Sustaining capital
expenditures2
|
57.2
|
46.7
|
109.9
|
82.1
|
Adjusted Net Earnings/(Loss) and Adjusted Net Earnings per
Share
"Adjusted net earnings" and "adjusted net earnings per share"
are non-GAAP financial performance measures that do not have any
standardized meaning under IFRS and therefore may not be comparable
to similar measures presented by other issuers. "Adjusted net
earnings" and "adjusted net earnings per share" excludes "loss on
repayment of long term debt" and "other gains and losses" as per
Note 3 of the Company's condensed consolidated financial
statements. Net earnings have been adjusted, including the
associated tax impact, for loss on repayment of long term debt and
the group of costs in "Other gains and losses" on the condensed
consolidated income statements. Key entries in this grouping are:
the fair value changes for the gold stream obligation, fair value
changes for the free cash flow interest obligation, fair value
changes for copper price option contracts, foreign exchange
gains/loss and fair value changes in investments. The income tax
adjustments reflect the tax impact of the above adjustments and is
referred to as "adjusted tax expense".
The Company uses "adjusted net earnings" for its own internal
purposes. Management's internal budgets and forecasts and public
guidance do not reflect the items which have been excluded from the
determination of "adjusted net earnings". Consequently, the
presentation of "adjusted net earnings" enables investors 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"
based on an internal assessment of performance measures that are
useful for evaluating the operating performance of New Gold's
business and a review of the non-GAAP financial performance
measures used by mining industry analysts and other mining
companies. "Adjusted net earnings" and "adjusted net earnings per
share" are intended to provide additional information only and
should not be considered in isolation or as substitutes for
measures of performance prepared in accordance with IFRS. These
measures are not necessarily indicative of operating profit or cash
flows from operations as determined under IFRS. The following table
reconciles these non-GAAP financial performance measures to the
most directly comparable IFRS measure.
|
Three months ended
June 30
|
Six months ended
June 30
|
(in millions of U.S.
dollars, except where noted)
|
2022
|
2021
|
2022
|
2021
|
ADJUSTED NET (LOSS)
EARNINGS RECONCILIATION
|
|
|
|
|
(Loss) earnings before
taxes
|
(36.5)
|
(10.6)
|
(43.8)
|
8.4
|
Other losses
|
13.7
|
42.8
|
32.0
|
34.1
|
Loss on repayment of
long-term debt
|
4.3
|
—
|
4.3
|
—
|
Adjusted net (loss) earnings before
taxes
|
(18.5)
|
32.2
|
(7.5)
|
42.5
|
Income tax
expense
|
(1.4)
|
(5.2)
|
(1.9)
|
(7.4)
|
Income tax adjustments
|
3.2
|
(0.3)
|
3.0
|
(0.3)
|
Adjusted income tax
recovery (expense)2
|
1.8
|
(5.5)
|
1.1
|
(7.7)
|
Adjusted net (loss)
earnings2
|
(16.7)
|
26.7
|
(6.4)
|
34.8
|
Adjusted (loss) earnings per share (basic and
diluted)2
|
(0.02)
|
0.04
|
(0.01)
|
0.05
|
Cash Generated from Operations, before Changes in Non-Cash
Operating Working Capital
"Cash generated from operations, before changes in non-cash
operating working capital" is a non-GAAP financial performance
measure that does not have any standardized meaning under IFRS and
therefore may not be comparable to similar measures presented by
other issuers. Other companies may calculate this measure
differently and this measure is unlikely to be comparable to
similar measures presented by other companies. "Cash generated from
operations, before changes in non-cash operating working capital"
excludes changes in non-cash operating working capital. New Gold
believes this non-GAAP financial measure provides further
transparency and assists analysts, investors and other stakeholders
of the Company in assessing the Company's ability to generate cash
from its operations before temporary working capital changes.
Cash generated from operations, before non-cash changes in
working capital is intended to provide additional information only
and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS. This
measure is not necessarily indicative of operating profit or cash
flows from operations as determined under IFRS. The following table
reconciles this non-GAAP financial performance measure to the most
directly comparable IFRS measure.
|
Three months ended
June 30
|
Six months ended
June 30
|
(in millions of U.S.
dollars)
|
2022
|
2021
|
2022
|
2021
|
CASH
RECONCILIATION
|
|
|
|
|
Cash generated from
operations
|
37.4
|
110.3
|
105.2
|
163.7
|
Change in non-cash
operating working capital
|
(10.0)
|
(25.6)
|
(11.4)
|
(15.2)
|
Cash generated from operations, before changes in
non-cash operating working
capital2
|
27.4
|
84.7
|
93.8
|
148.5
|
Free Cash Flow
"Free cash flow" is a non-GAAP financial performance measure
that does not have any standardized meaning under IFRS and
therefore may not be comparable to similar measures presented by
other issuers. New Gold defines "free cash flow" as cash generated
from operations and proceeds of sale of other assets less capital
expenditures on mining interests, lease payments, settlement of
non-current derivative financial liabilities which include the gold
stream obligation and the Ontario Teachers' Pension Plan free cash
flow interest. New Gold believes this non-GAAP financial
performance measure provides further transparency and assists
analysts, investors and other stakeholders of the Company in
assessing the Company's ability to generate cash flow from current
operations. "Free cash flow" is intended to provide additional
information only and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS. This measure is not necessarily indicative of operating
profit or cash flows from operations as determined under IFRS. The
following tables reconcile this non-GAAP financial performance
measure to the most directly comparable IFRS measure on an
aggregate and mine-by-mine basis.
|
Three months ended
June 30, 2022
|
(in millions of U.S.
dollars)
|
Rainy
River
|
New
Afton
|
Other
|
Total
|
FREE CASH FLOW
RECONCILIATION
|
|
|
|
|
Cash generated from
operations
|
51.8
|
(9.6)
|
(4.8)
|
37.4
|
Less Mining interest
capital expenditures
|
(42.7)
|
(33.4)
|
—
|
(76.1)
|
Add Proceeds of sale
from other assets
|
0.1
|
—
|
0.2
|
0.3
|
Less Lease
payments
|
(2.3)
|
(0.1)
|
(0.2)
|
(2.6)
|
Less Cash settlement of
non-current derivative financial liabilities
|
(6.7)
|
—
|
—
|
(6.7)
|
Free Cash Flow2
|
0.2
|
(43.1)
|
(4.8)
|
(47.7)
|
|
Three months ended
June 30, 2021
|
(in millions of U.S.
dollars)
|
Rainy
River
|
New
Afton
|
Other
|
Total
|
FREE CASH FLOW
RECONCILIATION
|
|
|
|
|
Cash generated from
operations
|
63.3
|
55.4
|
(8.4)
|
110.3
|
Less Mining interest
capital expenditures
|
(31.4)
|
(48.5)
|
(0.1)
|
(80.0)
|
Add Proceeds of sale
from other assets
|
0.3
|
—
|
—
|
0.3
|
Less Lease
payments
|
(2.4)
|
(0.1)
|
(0.2)
|
(2.7)
|
Less Cash settlement of
non-current derivative financial liabilities
|
(6.5)
|
—
|
—
|
(6.5)
|
Free Cash Flow2
|
23.3
|
6.8
|
(8.7)
|
21.4
|
|
Six months ended
June 30, 2022
|
(in millions of U.S.
dollars)
|
Rainy
River
|
New
Afton
|
Other
|
Total
|
FREE CASH FLOW
RECONCILIATION
|
|
|
|
|
Cash generated from
operations
|
114.7
|
5.6
|
(15.1)
|
105.2
|
Less Mining interest
capital expenditures
|
(82.5)
|
(69.1)
|
(0.1)
|
(151.7)
|
Add Proceeds of sale
from other assets
|
0.2
|
—
|
0.2
|
0.4
|
Less Lease
payments
|
(4.6)
|
(0.3)
|
(0.2)
|
(5.1)
|
Less Cash settlement of
non-current derivative financial liabilities
|
(13.0)
|
(12.4)
|
—
|
(25.3)
|
Free Cash Flow2
|
14.7
|
(76.2)
|
(15.2)
|
(76.5)
|
|
Six months ended
June 30, 2021
|
(in millions of U.S.
dollars)
|
Rainy
River
|
New
Afton
|
Other
|
Total
|
FREE CASH FLOW
RECONCILIATION
|
|
|
|
|
Cash generated from
operations
|
93.2
|
84.6
|
(14.1)
|
163.7
|
Less Mining interest
capital expenditures
|
(59.5)
|
(74.2)
|
(0.3)
|
(133.8)
|
Add Proceeds of sale
from other assets
|
0.3
|
0.1
|
—
|
0.4
|
Less Lease
payments
|
(4.9)
|
(0.3)
|
(0.3)
|
(5.4)
|
Less Cash settlement of
non-current derivative financial liabilities
|
(13.5)
|
(4.9)
|
—
|
(18.5)
|
Free Cash Flow2
|
15.5
|
5.4
|
(14.6)
|
6.4
|
Average Realized Price
"Average realized price per ounce of gold sold" is a non-GAAP
financial performance measure that does not have any standardized
meaning under IFRS and therefore may not be comparable to similar
measures presented by other issuers. Other companies may calculate
this measure differently and this measure is unlikely to be
comparable to similar measures presented by other companies.
Management uses this measure to better understand the price
realized in each reporting period for gold sales. "Average realized
price per ounce of gold sold" is intended to provide additional
information only and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS. The following tables reconcile this non-GAAP financial
performance measure to the most directly comparable IFRS measure on
an aggregate and mine-by-mine basis.
|
Three months ended
June 30
|
Six months ended
June 30
|
(in millions of U.S.
dollars, except where noted)
|
2022
|
2021
|
2022
|
2021
|
TOTAL AVERAGE
REALIZED PRICE
|
|
|
|
|
Revenue from gold
sales
|
95.8
|
121.9
|
228.6
|
234.3
|
Treatment and refining
charges on gold concentrate sales
|
0.5
|
1.6
|
1.6
|
2.8
|
Gross revenue from gold sales
|
96.3
|
123.5
|
230.2
|
237.1
|
Gold ounces
sold
|
51,263
|
68,184
|
121,825
|
131,723
|
Total average realized price per gold ounce sold
($/ounce)2
|
1,879
|
1,817
|
1,889
|
1,803
|
|
Three months ended
June 30
|
Six months ended
June 30
|
(in millions of U.S.
dollars, except where noted)
|
2022
|
2021
|
2022
|
2021
|
RAINY RIVER AVERAGE
REALIZED PRICE
|
|
|
|
|
Revenue from gold
sales
|
85.5
|
100.0
|
200.2
|
192.5
|
Gold ounces
sold
|
45,517
|
55,062
|
106,152
|
106,857
|
Rainy River average realized price per gold ounce
sold ($/ounce)2
|
1,879
|
1,817
|
1,886
|
1,802
|
|
Three months ended
June 30
|
Six months ended
June 30
|
(in millions of U.S.
dollars, except where noted)
|
2022
|
2021
|
2022
|
2021
|
NEW AFTON AVERAGE
REALIZED PRICE
|
|
|
|
|
Revenue from gold
sales
|
10.3
|
21.9
|
28.4
|
41.8
|
Treatment and refining
charges on gold concentrate sales
|
0.5
|
1.6
|
1.6
|
2.8
|
Gross revenue from gold sales
|
10.8
|
23.5
|
30.0
|
44.6
|
Gold ounces
sold
|
5,746
|
13,122
|
15,673
|
24,866
|
New Afton average realized price per gold ounce sold
($/ounce)2
|
1,879
|
1,817
|
1,914
|
1,809
|
For additional information with respect to the non-GAAP measures
used by the Company, refer to the detailed "Non-GAAP Financial
Performance Measure" section disclosure starting on page 27 in the
MD&A for the three and six months ended June 30, 2022 filed on SEDAR at www.sedar.com and
on EDGAR at www.sec.gov.
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: the Company's expectations and guidance regarding production,
costs, capital investments and expenses on a consolidated and
mine-by-mine basis, and the factors and timing contributing to
those expected results; an anticipated stronger second half of the
year and delivering on updated guidance; the Company's planned
priorities, activities and focus areas for the mine sites for the
remainder of the year; the continued review of optimization
opportunities and assessment of cost reduction initiatives; the
Company's mid to long-term strategy of increasing production and
decreasing costs at both sites, and the expected free cash flow to
be generated therefrom; the Company's planned objectives for the
2022-2026 period, and the anticipated results; the continued
evaluation of and potential opportunities relating to reducing
consumption; the projected reduction in fuel consumption and
improvement of the Company's carbon footprint;; development of the
Intrepid zone and anticipated production timing; the ramp-up of
production at B3 and expectations regarding timing for development
completion and reaching nameplate mining rates in the fourth
quarter; C-Zone development and projected timing for production;
advancing exploration activities at both sites and expected
delivery of an exploration update during the third quarter; the
potential for additional conversion of Mineral Resources to Mineral
Reserves over time and an associated extension of mine life;
expectations regarding the strip ratio at Rainy River for the remainder of the open pit;
projected fourth quarter access to higher grade ore material at
Rainy River; anticipated short and
long term benefits from advancing the underground plan at
Rainy River; expected timing for
completion of the North Lobe open pit mining; and the Company's
projections regarding free cash flow and the factors contributing
thereto.
All forward-looking statements in this news release are based on
the opinions and estimates of management that, while considered
reasonable as at the date of this press release in light of
management's experience and perception of current conditions and
expected developments, are inherently 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 MD&A, its most recent
annual information form and technical reports on the Rainy River
Mine and New Afton Mine filed on SEDAR at www.sedar.com and on
EDGAR at www.sec.gov. In addition to, and subject to, such
assumptions discussed in more detail elsewhere, the forward-looking
statements in this news release are also subject to the following
assumptions: (1) there being no significant disruptions affecting
New Gold's operations other than as set out herein; (2) political
and legal developments in jurisdictions where New Gold operates, or
may in the future operate, being consistent with New Gold's current
expectations; (3) the accuracy of New Gold's current mineral
reserve and mineral resource estimates and the grade of gold,
silver and copper expected to be mined and the grade of gold,
copper and silver expected to be mined; (4) the exchange rate
between the Canadian dollar and U.S. dollar, and to a lesser
extent, the Mexican Peso, and commodity prices being approximately
consistent with current levels and expectations for the purposes of
2022 guidance and otherwise; (5) prices for diesel, natural gas,
fuel oil, electricity and other key supplies being approximately
consistent with current levels; (6) equipment, labour and materials
costs increasing on a basis consistent with New Gold's current
expectations; (7) arrangements with First Nations and other
Aboriginal groups in respect of the New Afton Mine and Rainy River
Mine being consistent with New Gold's current expectations; (8) all
required permits, licenses and authorizations being obtained from
the relevant governments and other relevant stakeholders within the
expected timelines and the absence of material negative comments or
obstacles during any applicable regulatory processes; (9) there
being no significant disruptions to the Company's workforce at
either the Rainy River Mine or New Afton Mine due to cases of
COVID-19 (including any required self-isolation requirements due to
cross-border travel to the United
States or any other country or any other reason) or
otherwise; (10) the responses of the relevant governments to the
COVID-19 outbreak being sufficient to contain the impact of the
COVID-19 outbreak; (11) there being no material disruption to the
Company's supply chains and workforce that would interfere with the
Company's anticipated course of action at the Rainy River Mine and
the New Afton Mine; and (12) the long-term economic effects of the
COVID-19 outbreak not having a material adverse impact on the
Company's operations or liquidity position.
Forward-looking statements are necessarily based on estimates
and assumptions that are inherently subject to known and unknown
risks, uncertainties and other factors that may cause actual
results, level of activity, performance or achievements to be
materially different from those expressed or implied by such
forward-looking statements. Such factors include, without
limitation: price volatility in the spot and forward markets for
metals and other commodities; discrepancies between actual and
estimated production, between actual and estimated costs, between
actual and estimated Mineral Reserves and Mineral Resources and
between actual and estimated metallurgical recoveries; equipment
malfunction, failure or unavailability; accidents; risks related to
early production at the Rainy River Mine, including failure of
equipment, machinery, the process circuit or other processes to
perform as designed or intended; the speculative nature of mineral
exploration and development, including the risks of obtaining and
maintaining the validity and enforceability of the necessary
licenses and permits and complying with the permitting requirements
of each jurisdiction in which New Gold operates, including, but not
limited to: obtaining the necessary permits for the New Afton
C-Zone; uncertainties and unanticipated delays associated with
obtaining and maintaining necessary licenses, permits and
authorizations and complying with permitting requirements,
including those associated with the C-Zone permitting process;
changes in project parameters as plans continue to be refined;
changing costs, timelines and development schedules as it relates
to construction; the Company not being able to complete its
construction projects at the Rainy River Mine or the New Afton Mine
on the anticipated timeline or at all; volatility in the market
price of the Company's securities; changes in national and local
government legislation in the countries in which New Gold does or
may in the future carry on business; controls, regulations and
political or economic developments in the countries in which New
Gold does or may in the future carry on business; the Company's
dependence on the Rainy River Mine and New Afton Mine; the Company
not being able to complete its exploration drilling programs on the
anticipated timeline or at all; disruptions to the Company's
workforce at either the Rainy River Mine or the New Afton Mine, or
both, due to cases of COVID-19 or any required self-isolation (due
to cross-border travel, exposure to a case of COVID-19 or
otherwise); the responses of the relevant governments to the
COVID-19 outbreak not being sufficient to contain the impact of the
COVID-19 outbreak; disruptions to the Company's supply chain and
workforce due to the COVID-19 outbreak; an economic recession or
downturn as a result of the COVID-19 outbreak that materially
adversely affects the Company's operations or liquidity position;
there being further shutdowns at the Rainy River Mine or New Afton
Mine; significant capital requirements and the availability and
management of capital resources; additional funding requirements;
diminishing quantities or grades of Mineral Reserves and Mineral
Resources; actual results of current exploration or reclamation
activities; uncertainties inherent to mining economic studies
including the Technical Reports for the Rainy River Mine and New
Afton Mine; impairment; unexpected delays and costs inherent to
consulting and accommodating rights of First Nations and other
indigenous groups; climate change, environmental risks and hazards
and the Company's response thereto; tailings dam and structure
failures; actual results of current exploration or reclamation
activities; fluctuations in the international currency markets and
in the rates of exchange of the currencies of Canada, the United
States and, to a lesser extent, Mexico; global economic and financial
conditions and any global or local natural events that may impede
the economy or New Gold's ability to carry on business in the
normal course; compliance with debt obligations and maintaining
sufficient liquidity; taxation; fluctuation in treatment and
refining charges; transportation and processing of unrefined
products; rising costs or availability of labour, supplies, fuel
and equipment; adequate infrastructure; relationships with
communities, governments and other stakeholders; geotechnical
instability and conditions; labour disputes; the uncertainties
inherent in current and future legal challenges to which New Gold
is or may become a party; defective title to mineral claims or
property or contests over claims to mineral properties;
competition; loss of, or inability to attract, key employees; use
of derivative products and hedging transactions; counterparty risk
and the performance of third party service providers; investment
risks and uncertainty relating to the value of equity investments
in public companies held by the Company from time to time; the
adequacy of internal and disclosure controls; conflicts of
interest; the lack of certainty with respect to foreign operations
and legal systems, which may not be immune from the influence of
political pressure, corruption or other factors that are
inconsistent with the rule of law; the successful acquisitions and
integration of business arrangements and realizing the intended
benefits therefrom; and information systems security threats. In
addition, there are risks and hazards associated with the business
of mineral exploration, development, construction, operation and
mining, including environmental events and hazards, industrial
accidents, unusual or unexpected formations, pressures, cave-ins,
flooding and gold bullion losses (and the risk of inadequate
insurance or inability to obtain insurance to cover these risks) as
well as "Risk Factors" included in New Gold's most recent annual
information form, MD&A and other disclosure documents filed on
and available on SEDAR at www.sedar.com and on EDGAR at
www.sec.gov. Forward looking statements are not guarantees of
future performance, and actual results and future events could
materially differ from those anticipated in such statements. All
forward-looking statements contained in this news release are
qualified by these cautionary statements. New Gold expressly
disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information,
events or otherwise, except in accordance with applicable
securities laws.
Technical Information
The scientific and technical
information relating to the Mineral Resources and Reserves
contained herein has been reviewed and approved by Michele Della Libera, Director, Exploration for
the Company. All other scientific and technical information
contained in this news release has been reviewed and approved by
Patrick Godin, Executive Vice
President and Chief Operating Officer of New Gold. Mr.
Della Libera is a Professional
Geologist and a member of the Association of Professional
Geoscientists of Ontario and the
Engineers and Geoscientists British Columbia. Mr. Godin is a
Professional Engineer and member of the Ordre des ingénieurs du
Québec. Mr. Della Libera and Mr.
Godin are each a "Qualified Person" for the purposes of National
Instrument 43-101 – Standards of Disclosure for Mineral
Projects.
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SOURCE New Gold Inc.