New Gold Inc.
New Gold Provides New Afton Mine and Consolidated Annual Operational Outlook
TORONTO--(BUSINESS WIRE)-- February 18, 2021- New Gold Inc. (“New Gold” or the “Company”) (TSX and NYSE American: NGD) provides its annual operational outlook for the New Afton Mine, which had been delayed due to the mud-rush incident that occurred on February 2, 2021. The Company is also providing its annual consolidated operational outlook. The operational outlook for the Rainy River Mine was previously issued on February 10, 2021. All amounts are in U.S. dollars unless otherwise indicated.
On February 2, 2021, a tragic mud-rush incident occurred at the New Afton Mine with a contract driller fatally injured. The mud-rush was localized underneath the Lift 1 cave in the isolated recovery zone area, which does not interact with other areas of the mine, including the B3 and C-Zone areas. Underground operations, as well as B3 and C-Zone development, have resumed. Underground mining activities will continue to be safely and sequentially ramped-up as we maintain our focus on the health, safety and wellbeing of our people. Surface operations were not impacted, and the mill facility is currently processing ore from the mine as well as from the surface stockpiles.
“As we continue to ramp-up underground operations at the New Afton Mine, our primary focus will remain on the health, safety and wellbeing of our people. Production will ramp-up throughout the year with first ore extraction from B3 expected in the second quarter. We expect production will be higher in the second half of the year as B3 comes online and contributes an increasing proportion of mill feed,” stated Renaud Adams, President and CEO. “Over the past number of months, the New Afton Mine has been introducing new technologies and expanding its autonomous mining fleet and will continue to leverage technology to further optimize mine and mill performance over the coming years.”
New Afton 2021 Guidance Estimates
The operational outlook for the New Afton Mine assumes that our operations will continue without any significant COVID-19-related interruptions. New Gold continues to maintain preventative measures at all our sites to protect our workforce and communities, and to mitigate the effects of COVID-19 on our operations. Any reduction or suspension of our operations due to COVID-19, could impact our ability to achieve the New Afton 2021 outlook. Please see the Cautionary Notes Regarding Forward-Looking Statements at the end of this news release.
In 2021, the Company will continue to report production on a gold equivalent (“gold eq.”) basis as well as on a per-metal basis. Cash costsand All-in Sustaining Costs (“AISC”) will be reported on a per gold eq. ounce basis. Guidance has been prepared assuming $1,800 per gold ounce, $3.50 per pound of copper and $25 per silver ounce and a foreign exchange rate of 1.28 Canadian dollars to the US dollar.
New Afton Sustainability and ESG
Our key focus areas for New Afton include tailings management, energy reduction plans and Indigenous relations. In 2020, we began construction of our Thickened and Amended Tailings facility ("TAT"), which will support more efficient water management and improve long-term environmental impacts. As part of the Company's climate action plan, New Afton continues to explore options to reduce energy use on site. In 2020, New Afton was able to achieve a reduction in fossil fuel consumption and recently purchased an electric boom truck, two electric haul trucks and one electric scoop. The introduction of these vehicles is an important step in our C-Zone development and greenhouse gas reduction targets. Our relationships with surrounding Indigenous partners remain strong as we actively collaborate to improve the benefits to the surrounding areas based on mine expansion.
New Afton Operational Outlook
The mine plan for the year was adjusted following the tragic mud-rush event that occurred on February 2, 2021. Underground mining activities are safely and sequentially ramping-up as we continue to maintain our focus on the health, safety and wellbeing of our people. The adjusted plan contemplates lower tonnes mined from the recovery level, as mining operations will be limited to remote mucking activities. It is expected that mining on Lift 1, which includes the West cave, East cave and pillar recovery (“Lift 1”), will ramp-up during the first quarter and return to pre-incident mining rates in the second quarter, which is expected to be maintained over the balance of the year. It is expected that the B3 permit will be received in the latter part of the first quarter and ore extraction from the B3 zone will begin during the second quarter and ramp up over the year as more draw points are accessible. As a result of lower tonnes mined during the year, a portion of current surface stockpiles will be processed to supplement mill feed. C-Zone development will continue to be advanced as planned and the project remains on schedule.
- Gold eq. production is expected to be slightly lower than the prior year, primarily due to lower tonnes processed and lower grades as stockpiles supplement mill feed during the year, as a result of lower tonnes mined during the year.
- Cash costs1 per gold eq. ounce are expected to increase over the prior year as a result of lower production. Operating expense is expected to be between $820 and $900 per gold eq. ounce.
- During the year, depreciation and depletion is expected to average between $300 and $380 per gold eq. ounce for the New Afton Mine.
- Sustaining capital1 is expected to remain in-line with the prior year, primarily related to B3 mine development and includes approximately $10 million related to delays in capital projects experienced in 2020 and the reclassification of $10 million of deferred growth capital to sustaining capital.
- AISC1 are expected to increase as compared to the prior year, primarily due to higher cash costs expected for the year and lower production.
- Growth capital1 is expected to be higher than the prior year, in-line with plan, as C-Zone development activities increase and includes approximately $10 million due to delays in capital projects experienced in 2020.
- The initial phase of a 10,000-metre exploration drilling program was launched in late 2020 to test the 12-kilometre potential for near surface epithermal and porphyry style mineralization on the Cherry Creek trend, located within three kilometres of the New Afton Mill. The drilling program will continue to be advanced during the year and could be expanded based on results.
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. The Company also holds an 8% gold stream on the Artemis Gold Blackwater Project located in British Columbia and a 6% equity stake in Artemis. 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.
Source: https://www.newgold.com/investors/news-releases/news-details/2021/New-Gold-Provides-New-Afton-Mine-and-Consolidated-Annual-Operational-Outlook/default.aspx
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