New Gold Inc. (“New Gold” or the “Company”) (TSX and NYSE
American: NGD) reports fourth quarter and annual results for
the Company as well as its operational outlook for 2020. (All
amounts are in U.S. dollars unless otherwise indicated). An
earnings conference call and webcast will begin at 12:00 pm Eastern
Time to discuss the fourth quarter and year-end financial results
and will be followed by a technical session to discuss the updated
life of mine plans that were released today in a separate news
release. (Details provided at the end of this news release).
(For detailed information, please refer to the Company’s Fourth
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
press release. Please refer to the “Non-GAAP Financial Performance
Measures” section of this press release and the MD&A.)
Fourth Quarter and Annual Highlights
- Total production (excluding production from the Cerro San Pedro
Mine) for the quarter was 101,423 gold equivalent (gold eq.) ounces
(66,856 ounces of gold, 140,475 ounces of silver and 18.3 million
pounds of copper). For the year, production was 486,141 gold eq.
ounces (322,557 ounces of gold, 596,452 ounces of silver and 79.4
million pounds of copper) achieving annual guidance of 465,000 to
520,000 gold eq. ounces.
- Revenues for the quarter were $139 million and $631 million for
the year.
- Operating expense for the quarter was $1,007 per gold eq. ounce
and $762 per gold eq. ounce for the year.
- Total cash costs1,2 for the quarter were $942 per gold eq.
ounce and $792 per gold eq. ounce for the year, achieving guidance
of $740 to $820 per gold eq. ounce.
- All-in sustaining costs (AISC)1,2 for the quarter were $1,862
per gold eq. ounce and $1,310 per gold eq. ounce for the year,
below guidance of $1,330 to $1,430 per gold eq. ounce due to lower
sustaining capital spend.
- Net earnings from continuing operations for the quarter was
$0.3 million ($0.00 per share) with a net loss for the year of $74
million ($0.12 per share).
- Adjusted net loss2 from continuing operations for the quarter
was $28 million ($0.04 per share) and $47 million ($0.08 per share)
for the year.
- Operating cash flow generated from continuing operations for
the quarter was $48 million ($0.07 per share) and $264 million
($0.43 per share) for the year. Operating cash flow generated from
continuing operations for the quarter, before non-cash changes in
working capital2, was $39 million ($0.06 per share) and $238
million ($0.39 per share) for the year.
- As of the end of the quarter, the Company had available
liquidity of approximately $335 million, including $83 million in
cash and cash equivalents.
- On February 13, 2020, the Company released results of the
updated Life of Mine plans for the Rainy River Mine (Rainy River)
and the New Afton Mines (New Afton).
“In 2019 we began a journey to reposition the company for
long-term success and sustainable shareholder value creation and we
are encouraged by the progress we made as we have delivered on all
our key commitments that position the Company for the future.”
stated Renaud Adams, CEO. “With the release of our updated life of
mine plans we now begin a new phase for the Company as we position
Rainy River for profitable operations that drive free cash flow
generation by the end of 2020 that will sustain over the life of
the mine. We will also continue to focus on advancing development
of the New Afton C-zone and expand our exploration program at both
operations. The entire New Gold team is dedicated to executing on
our updated mine plans that create value for our shareholders.”
-
“Operating expense per gold equivalent ounce” and “AISC per gold
equivalent ounce” are calculated using gold equivalent ounces
sold.
-
Refer to the “Non-GAAP Performance Measures” section of this
press release.
Financial Highlights (Continuing Operations1)
Q4 2019
Q4 2018
2019
2018
Revenues from mining operations
139.2
157.4
630.6
604.5
Net earnings (loss), per share
0.00
(1.28)
(0.12)
(1.88)
Adj. net earnings (loss)2 per share
(0.04)
0.01
(0.08)
(0.04)
Operating cash flow, per share
0.07
0.10
0.43
0.33
Adj. operating cash flow2, per share
0.06
0.13
0.39
0.46
- Continuing operations include the Rainy River, New Afton and
Cerro San Pedro Mines.
- Refer to the “Non-GAAP Performance Measures” section of this
press release.
- Revenues for the quarter from continuing operations were $139
million, a decrease over the prior-year quarter due to a decrease
in gold eq. ounces sold and a decrease in the average realized
price of copper partially offset by an increase in average realized
price of gold.
- Operating expenses for the quarter were $105 million, an
increase over the prior-year quarter due to increased throughput at
planned lower grades and an increase in operating waste tonnes
mined at Rainy River. Operating expenses also included a non-cash
charge of $14 million related to an inventory write down at Rainy
River.
- Net earnings for the quarter was $0.3 million ($0.00 per
share), an increase over the prior year quarter due primarily to
the prior year including an impairment charge relating to Rainy
River.
- Adjusted net loss for the quarter was $28.0 million ($0.04 per
share), which is an increase in loss over the prior year quarter
due to the planned lower grade ore mined and processed in the
period.
Operational Highlights
Q4 2019
2019
Guidance3
Gold eq. production (ounces)1,2
101,423
486,141
465,000-520,000
Gold production (ounces)
66,856
322,557
300,000-335,000
Copper production (Mlbs)
18.3
79.4
75-85
Average realized gold price, per
ounce2
1,366
1,337
-
Average realized copper price, per
pound2
2.69
2.71
-
Operating expense, per gold eq. ounce
1,007
762
-
Total cash costs, per gold eq. ounce2
942
792
$740-$820
AISC, per gold eq. ounce2
1,862
1,310
$1,330-$1,430
Sustaining capital and sustaining leases
($M)2,3
89.8
227.6
$220-$245
Growth capital ($M)2
12.3
35.9
$50-$55
- Gold eq. ounces include silver and copper ounces produced
converted to a gold eq. 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 Q4 2019 was calculated based
on average spot market prices of $1,480 per gold ounce, $17.31 per
silver ounce and $2.67 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.
- Refer to the “Non-GAAP Financial Performance Measures” section
of this press release.
- On November 6, 2019 annual sustaining capital estimates for the
Rainy River Mine were reduced to $175-$190 million, decreasing
consolidated sustaining capital estimates to $220-$245
million.
Rainy River Highlights
Rainy River Mine
Q4 19
2019
Guidance
Gold eq. production (ounces)1
51,915
257,051
250,000-275,000
Gold eq. sold (ounces)
57,258
268,718
-
Gold production (ounces)
51,122
253,772
245,000-270,000
Gold sold (ounces)
56,390
265,359
-
Average realized gold price, per ounce
1,366
1,335
-
Operating expense, per gold eq. ounce
1,278
962
-
Total cash costs, per gold eq. ounce
1,032
910
$870-$950
AISC, per gold eq. ounce
2,429
1,630
$1,690-$1,790
Sustaining capital and sustaining leases
($M)2
78.9
188.6
$175-$190
Growth capital ($M)
0.1
6.8
~3
- Gold eq. ounces for Rainy River include silver ounces produced
converted to a gold eq. based on a ratio of the average spot market
prices for the commodities for each period. The ratio for Q4 2019
was calculated based on average spot market prices of $1,480 per
gold ounce and $17.31 per silver ounce and includes 74,236 ounces
of silver. The ratio for annual guidance was calculated at average
spot prices of $1,300 per gold ounce, and $2.75 per pound
copper.
- On November 6, 2019 annual sustaining capital estimates for the
Rainy River Mine were reduced to $175 to $190 million from $210 to
$230 million.
Rainy River Mine
FY 2018
Q1 19
Q2 19
Q3 19
Q4 19
FY 2019
2019 Guidance
Tonnes mined per day (ore and waste)
108,392
111,679
114,544
111,078
136,124
118,404
Ore tonnes mined per day
33,687
15,739
21,368
18,220
19,485
18,712
~31,000
Operating waste tonnes per day
47,128
62,955
82,488
75,206
74,020
73,702
Capitalized waste tonnes per day
25,576
32,986
10,688
17,652
42,619
25,990
Total waste tonnes per day
74,705
95,941
93,176
92,858
116,639
99,692
Strip ratio (waste: ore)
2.22
6.10
4.36
5.10
5.99
5.33
~3.1:1
Tonnes milled per calendar day
17,934
19,725
21,117
24,500
22,521
21,980
22,000-24,000
Gold grade milled (g/t)
1.25
1.19
1.15
1.14
0.85
1.08
~1.10
Gold recovery (%)
86
90
93
91
91
91
90-92
Mill availability (%)
77
89
88
88
89
88
85-88
Gold production (oz)
227,284
61,557
66,013
75,080
51,122
253,772
245,000-270,000
Gold eq. production1 (oz)
230,349
62,278
66,765
76,092
51,915
257,051
250,000-275,000
- The mine reported gold eq. production of 51,915 ounces (51,122
ounces of gold and 67,808 ounces of silver) for the quarter and
257,051 gold eq. ounces (253,772 ounces of gold and 282,053 ounces
of silver) for the year, achieving the lower end of annual guidance
of 250,000 to 275,000 gold eq. ounces. Gold production during the
quarter was impacted by lower throughput at the mill facility and
the expected lower grade ore from Phase 2 as the ore from Phase 1
was mined out as planned.
- Operating expenses were $1,278 per gold eq. ounce for the
quarter and $962 per gold eq. ounce for the year and included a
non-cash inventory write down of $14 million primarily related to
the derecognition of the low-grade stockpile as inventory.
Operating expenses per gold eq. ounce for the three months and year
ended December 31, 2019 increased when compared to the prior-year
periods as lower grade gold ore was mined and processed.
- Total cash costs were $1,032 per gold eq. ounce for the quarter
and $910 per gold eq. ounce for the year, achieving guidance of
$870 to $950 per gold eq. ounce. Total cash costs per gold eq.
ounce for the three months and year ended December 31, 2019
increased when compared to the prior-year periods as lower grade
gold ore was mined and processed.
- Sustaining capital (net of proceeds from disposal of assets)
and sustaining lease payments for the quarter increased to $79
million, which primarily related to the completion of the Stage 2
Tailings Management Area (TMA) dam construction, installation of
wick drains for stabilization of the east waste dump, ongoing
renovations of the camp facility and construction work for the
rescoped maintenance and warehouse facilities, and $12 million of
capitalized mining costs. Sustaining capital (net of proceeds from
disposal of assets) and sustaining lease payments for the year were
$189 million, including $32 million of capitalized mining costs,
in-line with reduced annual sustaining capital estimates of $175 to
$190 million (from $210-$230 million) due to cost reductions of
approximately $15 million related to the TMA and the rescoped
maintenance and warehouse facilities, as well as the deferral of
capital to 2020 of approximately $20 million.
- AISC were $2,429 per gold eq. ounce for the quarter, impacted
by higher sustaining capital spend during the quarter, primarily
related to the completion of substantially all deferred
construction capital projects as noted above, as well as higher
capitalized mining costs. AISC for the year was $1,630 per gold eq.
ounce, below guidance of $1,690 to $1,790 per gold eq. ounce due to
lower than planned sustaining capital for the year.
- Growth capital for the year was $6.8 million, higher than
annual guidance of approximately $3 million, primarily related to
the purchase of underground infrastructure.
- During the quarter, approximately 1.8 million ore tonnes and
10.7 million waste tonnes (including 3.9 million capitalized waste
tonnes) were mined from the open pit at an average strip ratio of
5.99:1 as Phase 2 waste stripping continued to be prioritized
during the quarter. Earlier in the year, the decision was made to
prioritize waste stripping in order to prepare ore faces in
anticipation of the updated life of mine plan. Additionally, 0.8
million tonnes of out-pit material were mined during the quarter
for use in planned dam raises. Total tonnes mined per day for the
quarter averaged 136,124 tonnes per day, an increase of more than
20% over the prior three quarters.
- Mill throughput for the quarter averaged 22,521 tonnes per day.
As previously disclosed, due to an extended period of heavy
rainfall in the area, the mill operated at lower capacity in
October in order to manage water levels in the TMA. Once the Stage
2 TMA dam construction was completed in late October, which
provided approximately 7 to 8 million cubic meters of additional
TMA capacity, mill throughput increased to average 24,858 tonnes
per day for November and December, exceeding the target range of
24,000 tonnes per day (original design was 21,000 tonnes per
day).
- Mill availability for the quarter averaged 89%, achieving
target levels with all major mill upgrades substantially completed.
As the mill has demonstrated consistent operations at target
levels, there remains potential for further increases in mill
throughput in the coming quarters as mill availability improves and
the pebble crusher is commissioned.
- Gold recovery averaged 91% for the quarter, in-line with
plan.
- Subsequent to period end, the Company completed a comprehensive
mine optimization study that includes a review of alternative open
pit and underground mining scenarios which achieved the overall
objective of improving the return on investment over the life of
the mine. The results of the study were released on February 13,
2020.
- As operational performance has improved over the past five
quarters, the focus is now shifting from stabilizing operations to
optimizing operational and cost performance. To support this
initiative, the Company has engaged an external consultant to
support improved overall equipment efficiencies with the objective
of optimizing open pit mining productivity and unit cost
performance.
- Exploration activities continued in the fourth quarter, with
the completion of the soil geochemical survey and the geological
mapping in the northeastern portion of the broader Rainy River land
package. Data interpretation is underway to identify drill-ready
targets for follow-up reconnaissance drilling campaign planned for
the first half of 2020.
New Afton Highlights
New Afton Mine
Q4 19
2019
Guidance
Gold eq. production (ounces) 1
49,507
229,091
215,000 - 245,000
Gold eq. sold (ounces)
47,188
219,447
-
Gold production (ounces)
15,734
68,785
55,000 - 65,000
Gold sold (ounces)
15,301
65,694
-
Copper production (Mlbs)
18.3
79.4
75 - 85
Copper sold (Mlbs)
17.3
76.4
-
Average realized gold price, per ounce
1,364
1,348
-
Average realized copper price, per
pound
2.68
2.71
-
Operating expense, per gold eq. ounce
678
517
-
Total cash costs, per gold eq. ounce
833
647
$600 - $640
AISC, per gold eq. ounce
1,076
829
$810 - $890
Sustaining capital and sustaining leases
($M)
10.7
38.0
$45 - $55
Growth capital ($M)
10.5
24.1
$40 - $45
- Gold eq. ounces for New Afton includes silver ounces and copper
pounds produced converted to a gold eq. based on a ratio of the
average spot market prices for the commodities for each period. The
ratio for Q4 2019 was calculated based on average spot market
prices of $1,480 per gold ounce, $17.31 per silver ounce and $2.67
per copper pound and includes 65,368 ounces of silver. The ratio
for annual guidance was calculated at average spot prices of $1,300
per gold ounce, and $2.75 per pound copper.
New Afton Mine
FY 2018
Q1 19
Q2 19
Q3 19
Q4 19
FY 2019
2019 Guidance
Tonnes mined per day (ore and waste)
16,156
15,824
16,357
15,773
14,539
15,620
16,000 – 17,000
Tonnes milled per calendar day
14,668
14,759
14,992
15,572
15,861
15,300
14,000 – 15,000
Gold grade milled (g/t)
0.53
0.50
0.53
0.43
0.42
0.47
~0.45
Gold recovery (%)
85
83
83
80
79
82
76 - 80%
Gold production (oz)
77,329
17,841
19,203
16,007
15,734
68,785
55,000 – 65,000
Copper grade milled (%)
0.87
0.80
0.86
0.76
0.70
0.78
~0.86
Copper recovery (%)
83
83
83
84
81
83
80 – 85%
Copper production (Mlbs)
85.1
19.5
21.6
20.1
18.3
79.4
75 – 85
Gold eq. production1 (oz)
279,755
60,986
65,791
52,807
49,507
229,091
215,000 – 245,000
- The mine produced 49,507 gold eq. ounces for the quarter
(15,734 ounces of gold, and 18.3 million pounds of copper) and
229,091 ounces (68,785 ounces of gold, and 79.4 million pounds of
copper) for the year, achieving production guidance of 215,000 to
245,000 gold eq. ounces. Production in the quarter was impacted by
unscheduled belt repairs that resulted in mill feed being
supplemented by the intermediate grade stockpile. Gold eq.
production was impacted by the lower realized copper price.
- Operating expenses were $678 per gold eq. ounce for the quarter
and $517 per gold eq. ounce for the year, impacted by costs related
to belt repairs noted above and lower gold eq. ounces due the lower
copper price.
- Total cash costs were $833 per gold eq. ounce for the quarter
and $647 per gold eq. ounce for the year, slightly above guidance
of $600 to $640 per gold eq. ounce primarily due to the lower gold
eq. ounces related to the lower copper price.
- The increase in operating expenses per gold eq. ounce, total
cash costs per gold eq. ounce for the three months and year ended
December 31, 2019 when compared to the prior-year periods was
primarily driven by higher operating expenses associated with the
mining and processing of lower grade gold and copper ore.
- Sustaining capital and sustaining lease payments for the
quarter were $10.7 million, and $38.0 for the year, below annual
guidance of $45 to $55 million due to improved cost efficiencies
realized on development meters, as well as the impact of working
capital as payments for capital projects incurred later in the
fourth quarter are expected in the first quarter of 2020.
Sustaining capital was primarily related to B3 mine development and
a tailings dam raise.
- AISC were $1,076 per gold eq. ounce for the quarter and $829
per gold eq. ounce for the year, achieving guidance of $810 to $890
per gold eq. ounce. The increase in AISC per gold eq. ounce for the
three months and year ended December 31, 2019 when compared to the
prior-year periods was primarily driven by higher total cash costs
and sustaining capital expenditures.
- Growth capital was $10.5 million for the quarter and $24.1
million for the year, primarily related to C-zone development,
below annual guidance of $40 to $45 million. This was due to
realized cost efficiencies in development metres, as well as the
impact on working capital as payments for capital projects incurred
later in the fourth quarter are expected in the first quarter of
2020.
- The supergene recovery circuit is complete and operating at
target recoveries and utilization.
- 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. Sub-level cave (SLC) definition, mining operability and
sequencing will continue to be further defined for potential
incorporation of additional resources from the SLC zone into the
mine plan. During the quarter, exploration-heading development
towards the C-zone advanced by approximately 1,135 metres. The
results of the updated life of mine plan were released on February
13, 2020.
- The New Afton delineation and exploration programs completed in
2019 include three key initiatives: 1) underground drilling to
delineate and expand mineral resources within and beneath the 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). The regional exploration program advanced
during the quarter with the definition of high priority drill
targets within the Cherry Creek trend area; first-pass exploration
drilling program has been finalized and is currently scheduled to
start during the first quarter of 2020 upon permit issuance.
2020 Operational Outlook
The Company announces its operational outlook for 2020 with
company-wide gold eq. production expected to be in-line with the
prior year.
During the year the Company will continue to advance its
strategy of re-positioning itself for long-term success that will
include: implementing the updated Rainy River life of mine plan
with a diligent focus on optimizing operational and cost
performance that improves the return on investment over the life of
the mine; continuing to advancing the internally funded development
program for the New Afton C-zone; and focusing on organic growth
opportunities by advancing strategic exploration programs at both
assets.
In 2020, the Company will report production on a gold equivalent
basis as well as on a per-metal basis. Cash costs and AISC will be
reported on a per gold equivalent ounce basis. Throughout the year
the Company will report gold equivalent ounces using a constant
ratio of $1,500 per gold ounce, $17.75 per silver ounce and $2.85
per pound copper, and a foreign exchange rate of 1.30 Canadian
dollars to the US dollar.
Operational Estimates
Rainy River
New Afton
2020 Consolidated
Guidance
Gold Produced (ounces)
240,000 – 260,000
73,000 – 83,000
313,000 – 343,000
Copper Produced (Mlbs)
-
75 - 85
75 – 85
Gold Eq. Produced (ounces)1
245,000 – 265,000
220,000 – 250,000
465,000 – 515,000
Operating expense per gold eq. ounce1
$875 - $955
$550 - $630
$725 - $805
Cash Costs per gold eq. ounce (on a
co-product basis)1
$875 - $955
$665 - $745
$775 - $855
Corporate G&A per gold eq. ounce1
-
-
$30 - $40
Depreciation and depletion per gold eq.
ounce1
$490 - $570
$275 - $355
$390 - $470
All-in Sustaining Costs per gold eq.
ounce1
$1,470 - $1,550
$940 - $1,020
$1,260 - $1,340
Capital Investment & Exploration
Expense Estimates
Rainy River
New Afton
2020 Consolidated
Guidance1
Sustaining Capital & Sustaining Leases
($M)
$128 - $162
$50 - $70
$178 - $232
Growth Capital ($M)2
$3 - $9
$85 - $105
$100 - $126
Exploration ($M)3
$2 - $6
$5 - $10
$9 - $18
- Gold equivalent ounces includes approximately 420,000 to
445,000 ounces of silver at Rainy River and approximately 330,000
to 340,000 ounces of silver at New Afton.
- Consolidated growth capital includes ~$12 million for
Blackwater
- Exploration expense includes ~$2 million for Blackwater
Fourth Quarter Conference Call and Webcast and Technical
Session Webcast
On February 13, 2020, the Company will release: 1) Fourth
quarter and year-end financial results; 2) 2020 operational
outlook; 3) Updated Mineral Reserves and Resources; and 4) Updated
Life of Mine plans for the Rainy River and New Afton Mines.
An earnings conference call and webcast will begin at 12:00 pm
Eastern Time to discuss the financial results followed by a
technical session webcast to discuss the updated life of mine
plans. Details are provided below:
- Participants may listen to the webcast by registering on our
website at www.newgold.com or via the following link
https://onlinexperiences.com/Launch/QReg/ShowUUID=CEE17A95-4B57-414E-90A0-E7B1596C1592
- Participants may also listen to the conference call by calling
toll free 1-866-211-3198, or 1-647-689-6603 outside of the U.S. and
Canada.
- A recorded playback of the conference call will be available
until by calling toll free 1-800-585-8367, or 1-416-621-4642
outside of the U.S. and Canada, passcode 2441039. An archived
webcast will also be available until March 3, 2020 at
www.newgold.com.
About New Gold Inc.
New Gold is a Canadian-focused intermediate gold mining company
with a portfolio of two core producing assets in Canada, the Rainy
River and New Afton Mines as well as the 100% owned Blackwater
development project. The Company also operates the Cerro San Pedro
Mine in Mexico (in reclamation). New Gold’s vision is to build a
leading diversified intermediate gold company based in Canada that
is committed to 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, operating expenses per gold ounce sold, total cash
costs and all-in sustaining costs and the factors contributing to
those expected results, including throughput and grades expected to
be mined; expected capital expenditures; planned development and
exploration activities for 2020 and beyond at the Company’s
operations; development of the New Afton C-zone; and the expected
timing of a revised life-of-mine plan for New Afton and Rainy
River.
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 Information Form and technical reports to be
filed within 45 days of this release filed 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; (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; (4) the exchange rate between the Canadian
dollar and U.S. dollar, and to a lesser extent, the Mexican Peso,
being approximately consistent with current levels; (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 Rainy River,
New Afton and Blackwater 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 during the applicable regulatory
processes; and (9) metals and other commodity prices and exchange
rates being consistent with those estimated for the purposes of
2020 guidance and the material assumptions identified under the
heading “outlook for 2020” in the MD&A.”
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: significant capital requirements and the availability
and management of capital resources; additional funding
requirements; price volatility in the spot and forward markets for
metals and other commodities; 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;
discrepancies between actual and estimated production, between
actual and estimated mineral reserves and mineral resources and
between actual and estimated metallurgical recoveries; 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; fluctuation in
treatment and refining charges; changes in national and local
government legislation in Canada, the United States and, to a
lesser extent, Mexico or any other country in which New Gold
currently or may in the future carry on business; taxation;
controls, regulations and political or economic developments in the
countries in which New Gold does or may carry on business; 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, the lack of certainty with respect to foreign 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 uncertainties inherent to current and future
legal challenges New Gold is or may become a party to; diminishing
quantities or grades of mineral reserves and mineral resources;
competition; loss of key employees; rising costs of labour,
supplies, fuel and equipment; actual results of current exploration
or reclamation activities; uncertainties inherent to mining
economic studies; changes in project parameters as plans continue
to be refined; accidents; labour disputes; defective title to
mineral claims or property or contests over claims to mineral
properties; unexpected delays and costs inherent to consulting and
accommodating rights of Indigenous groups; risks, uncertainties and
unanticipated delays associated with obtaining and maintaining
necessary licenses, permits and authorizations and complying with
permitting requirements. In addition, there are risks and hazards
associated with the business of mineral exploration, development
and mining, including environmental events and hazards, industrial
accidents, unusual or unexpected formations, pressures, cave-ins,
flooding and gold bullion losses and risks associated with a mine
with relatively limited history of commercial production, such as
Rainy River, (and the risk of inadequate insurance or inability to
obtain insurance to cover these risks), the risks identified in the
“Enterprise Risk Management and Risk Factors” section of the
MD&A as well as "Risk Factors" included in New Gold's Annual
Information Form and other disclosure documents filed on and
available 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 of the
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
All scientific and technical information in this news release
has been reviewed and approved by Mr. Eric Vinet, Vice President
for the Company. Mr. Vinet is a Professional Engineer and member of
the Ordre des ingénieurs du Québec. Mr. Vinet is a "Qualified
Persons" for the purposes of NI 43-101.
Cautionary Note to U.S. Readers Concerning Estimates of
Mineral Reserves and Mineral Resources
This news release was prepared in accordance with Canadian
standards for reporting of mineral resource estimates, which differ
in some respects from United States standards. In particular, and
without limiting the generality of the foregoing, the terms
“inferred mineral resources,” “indicated mineral resources,”
“measured mineral resources” and “mineral resources” used or
referenced in this news release are Canadian mineral disclosure
terms as defined in accordance with National Instrument 43-101 –
Standards of Disclosure for Mineral Projects (“NI 43-101”) under
the guidelines set out in the 2014 Canadian Institute of Mining,
Metallurgy and Petroleum Standards for Mineral Resources and
Mineral Reserves, Definitions and Guidelines, May 2014 (the “CIM
Standards”). Until recently, the CIM Standards differed
significantly from standards in the United States. The U.S.
Securities and Exchange Commission (the “SEC”) has adopted
amendments to its disclosure rules to modernize the mineral
property disclosure requirements for issuers whose securities are
registered with the SEC under the U.S. Securities Exchange Act of
1934, as amended (the “Exchange Act”). These amendments became
effective February 25, 2019 (the “SEC Modernization Rules”) with
compliance required for the first fiscal year beginning on or after
January 1, 2021. The SEC Modernization Rules replace the historical
property disclosure requirements for mining registrants that were
included in SEC Industry Guide 7, which will be rescinded from and
after the required compliance date of the SEC Modernization Rules.
As a result of the adoption of the SEC Modernization Rules, the SEC
now recognizes estimates of “measured mineral resources”,
“indicated mineral resources” and “inferred mineral resources”. In
addition, the SEC has amended its definitions of “proven mineral
reserves” and “probable mineral reserves” to be “substantially
similar” to the corresponding definitions under the CIM Standards,
as required under NI 43-101. Accordingly, during this period
leading up to the compliance date of the SEC Modernization Rules,
information regarding mineral resources or mineral reserves
contained or referenced in this news release may not be comparable
to similar information made public by United States companies.
Readers are cautioned that “inferred mineral resources” have a
great amount of uncertainty as to their existence, and great
uncertainty as to their economic and legal feasibility. It cannot
be assumed that all or any part of an inferred mineral resource
will ever be upgraded to a higher category. Under Canadian rules,
estimates of inferred mineral resources may not form the basis of
feasibility or other economic studies, except in limited
circumstances. The term “resource” does not equate to the term
“reserves”. Readers should not to assume that all or any part of
measured or indicated mineral resources will ever be converted into
mineral reserves. Readers are also cautioned not to assume that all
or any part of an inferred mineral resource exists, or is
economically or legally mineable.
Non-GAAP Financial Performance Measures
All-in sustaining costs (AISC) per gold eq. ounce, total cash
costs per gold ounce and per gold eq. ounce, sustaining capital,
sustaining lease and growth capital, Adjusted net earnings/(loss),
operating cash flows generated from operations, before changes in
non-cash operating working capital and average realized price and
are non-GAAP financial measures that do not have a 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 Company believes that these measures,
together with measures determined in accordance with IFRS, provide
investors with an improved ability to evaluate the underlying
performance of the Company. In addition, certain non-GAAP measures
are utilized, along with other measures, in the Company scorecard
to set incentive compensation goals and assess performance of its
executives.
All-In Sustaining Costs per
Gold eq. Ounce
"All-in sustaining costs per gold eq. ounce” is a non-GAAP
financial measure. Consistent with guidance announced in 2013 by
the World Gold Council, an association of various gold mining
companies from around the world New Gold defines "all-in sustaining
costs" per ounce as the sum of total cash costs, 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 ounces of
gold eq. sold to arrive at a per ounce figure.
In addition to gold the Company produces copper and silver. Gold
eq. ounces of copper and silver produced or sold in a quarter are
computed by calculating the ratio of the average spot market copper
and silver prices to the average spot market gold price in a
quarter and multiplying this ratio by the pounds of copper and
silver ounces produced or sold during that quarter. Gold eq. ounces
produced or sold in a period longer than one quarter are calculated
by adding the number of gold eq. ounces in each quarter of that
period. In 2020 the Company will report gold eq. ounces using a
consistent ratio. Notwithstanding the impact of copper and silver
sales, as a Company 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 non-GAAP financial measure provides
further transparency into costs associated with producing gold and
assists analysts, investors and other stakeholders of the Company
in assessing the Company's operating performance, its ability to
generate free cash flow from current operations and its overall
value. This data is furnished to provide additional information and
is a non-GAAP financial measure. All-in sustaining costs presented
do not have a 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 and is not
necessarily indicative of cash flow from operations under IFRS or
operating costs presented under IFRS.
Sustaining Capital
"Sustaining capital" is a non-GAAP financial measure as well as
“sustaining lease”. New Gold defines sustaining capital as net
capital expenditures that are intended to maintain operation of its
gold producing assets. A sustaining lease is similarly a capital
lease payment that is sustaining in nature. To determine sustaining
capital expenditures, New Gold uses cash flow related to mining
interests from its statement of cash flows and deducts any
expenditures that are non-sustaining or growth capital. Management
uses sustaining capital and other sustaining costs, to understand
the aggregate net result of the drivers of all-in sustaining costs
other than total cash costs. Sustaining capital and sustaining
lease are intended to provide additional information only, 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.
Growth Capital
"Growth capital" is a non-GAAP financial measure. New Gold terms
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 statement of cash flows and deducts any
expenditures that are sustaining capital. Growth capital is
intended to provide additional information only, 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.
Total Cash Costs
"Total cash costs per ounce” and total cash costs per gold eq.
ounce are non-GAAP financial measures which 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. New Gold reports
total cash costs on a sales basis. The Company believes that
certain investors use this information to evaluate the Company's
performance and ability to generate liquidity through operating
cash flow to fund future capital expenditures and working capital
needs. This measure, along with sales, is considered to be a key
indicator of the Company's ability to generate operating earnings
and cash flow from its mining operations. Total cash costs include
mine site operating costs such as mining, processing and
administration costs, royalties, production taxes, but are
exclusive of amortization, reclamation, capital and exploration
costs. Total cash costs per gold ounce are net of by-product sales
and are divided by gold ounces sold to arrive at a per ounce
figure. Total cash costs per gold eq. ounce are divided by gold eq.
ounces sold to arrive at a per ounce figure.
Unless otherwise indicated, all total cash cost information in
this news release is on a gold eq. ounce basis. Gold eq. ounces of
copper and silver produced in a quarter are computed by calculating
the ratio of the average spot market copper and silver prices to
the average spot market gold price in a quarter and multiplying
this ratio by the pounds of copper and silver ounces produced
during that quarter. Gold eq. ounces produced in a period longer
than one quarter are calculated by adding the number of gold eq.
ounces in each quarter of that period. In 2020 the Company will
report gold eq. ounces using a consistent ratio. This data is
furnished to provide additional information and is a non-GAAP
financial measure. Total cash costs presented do not have a
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 and is not necessarily
indicative of cash flow from operations under IFRS or operating
costs presented under GAAP.
Adjusted Net
Earnings/(Loss)
"Adjusted net earnings/(loss)" and "adjusted net earnings/(loss)
per share" are non-GAAP financial measures. Net earnings/(loss)
have been adjusted and tax affected for the group of costs in
"Other gains and losses" on the condensed consolidated income
statement and other non-recurring items. The adjusted entries are
also impacted for tax to the extent that the underlying entries are
impacted for tax in the unadjusted net earnings/(loss) from
continuing operations. The Company uses this measure for its own
internal purposes. Management's internal budgets and forecasts and
public guidance do not reflect items which are included in other
gains and losses. Consequently, the presentation of adjusted net
earnings and adjusted net earnings per share enables investors and
analysts to better understand the underlying operating performance
of our core mining business through the eyes of management.
Management periodically evaluates the components of adjusted net
earnings and adjusted net earnings per share based on an internal
assessment of performance measures that are useful for evaluating
the operating performance of our business and a review of the
non-GAAP measures used by mining industry analysts and other mining
companies. Adjusted net (loss)/earnings and adjusted net
(loss)/earnings per share are intended to provide additional
information only and do not have any standardized meaning under
IFRS and may not be comparable to similar measures presented by
other companies. They should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS. The measures are not necessarily indicative of operating
profit or cash flows from operations as determined under IFRS.
Operating Cash Flows Generated from Operations, before
Changes in Non-Cash Operating Working Capital
“Operating cash flows generated from operations, before changes
in non-cash operating working capital” is a non-GAAP financial
measure with no standard meaning under IFRS, which excludes changes
in non-cash operating working capital. Management uses this measure
to evaluate the Company’s ability to generate cash from its
operations before temporary working capital changes.
Operating cash flows generated from operations, before non-cash
changes in working capital is intended to provide additional
information only and does not have any standardized meaning under
IFRS; it should not be considered in isolation or as a substitute
for measures of performance prepared in accordance with IFRS. Other
companies may calculate this measure differently and this measure
is unlikely to be comparable to similar measures presented by other
companies.
Average Realized
Price
"Average realized price per ounce or pound sold" is a non-GAAP
financial measure with no standard meaning under IFRS.
Management uses this measure to better understand the price
realized in each reporting period for gold, silver, and copper
sales. Average realized price is intended to provide additional
information only and does not have any standardized definition
under IFRS; it should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS. Other companies may calculate this measure differently and
this measure is unlikely to be comparable to similar measures
presented by other companies.
For additional information with respect to the non-GAAP measures
used by the Company, including reconciliation to the nearest IFRS
measures, refer to the detailed Non-GAAP performance measure
disclosure in the Management’s Discussion and Analysis for the year
ended December 31, 2019 filed at www.sedar.com and on EDGAR at
www.sec.gov.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200213005123/en/
Anne Day Vice President, Investor Relations Direct: +1
(416) 324-6003 Email: anne.day@newgold.com
Grafico Azioni New Gold (AMEX:NGD)
Storico
Da Feb 2024 a Mar 2024
Grafico Azioni New Gold (AMEX:NGD)
Storico
Da Mar 2023 a Mar 2024