Provides Notice of Release of Fourth Quarter
Financial Results and Updated Mine Plans
New Gold Inc. (“New Gold” or the “Company”) (TSX and NYSE
American: NGD) reports preliminary fourth quarter and annual
results from the Rainy River and New Afton Mines, achieving annual
production guidance. (All amounts are in US dollars unless
otherwise indicated).
Consolidated Fourth Quarter and Annual Highlights
- Total production (excluding production from the Cerro San Pedro
Mine) for the fourth 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.
- Total cash costs1,2 are expected to increase in the quarter and
achieve the higher end of guidance of $740 to $820 per gold eq.
ounce for the year.
- Sustaining capital increased significantly in the quarter,
primarily related to accelerated capital spend at the Rainy River
Mine and is expected to achieve the mid-range of guidance of $220
to $245 for the year.
- All-in-sustaining costs (“AISC”) are expected to be higher in
the quarter due to increased sustaining capital spend at the Rainy
River Mine and be slightly below annual guidance of $1,330 to
$1,430 per gold eq. ounce 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 will release: 1) fourth
quarter and year-end financial results; 2) 2020 operational
outlook; 3) updated Mineral Reserves and Resources; and 4) results
of the 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 that will be
followed by a technical session to discuss the updated Life of Mine
plans. (Details provided at the end of this news release).
- “Total cash costs” and “AISC per gold equivalent ounce” are
calculated using gold equivalent ounces sold.
- Refer to the “Non-GAAP Financial Performance Measures section
of this press release.
Consolidated Fourth Quarter and Annual Highlights
Q4 19
FY 2019
2019 Guidance
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
-
- 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
“2019 was a pivotal year for New Gold as we began the journey to
reposition the company for long-term success and sustainable
shareholder value creation. We are encouraged by the progress we
have made in 2019 as we delivered on all our key commitments,
including stabilizing operations and completing substantially all
deferred construction capital at the Rainy River Mine, advancing
the development of the New Afton C-zone, improving our balance
sheet and achieving annual production guidance,” stated Renaud
Adams, CEO. “As we begin a new year, the management team remains
committed to building on the successes achieved in 2019 while
maintaining our focus on creating sustainable shareholder value. In
the near term we will release updated life of mine plans for both
Rainy River and New Afton, we will shift our efforts at Rainy River
from stabilizing the operation to optimizing open pit mining
productivity and unit cost performance, continue to advance C-zone
development at New Afton, launch strategic drilling programs at
both assets to extend mine life and continue to focus on improving
our balance sheet.”
Rainy River Mine Highlights
Rainy River Mine
Q4 19
FY 2019
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
-
- 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.
Rainy River Operating
KPI’s
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. production (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.
- Total cash costs are expected to increase for the quarter and
achieve the mid-range of annual guidance of $870 to $950 per gold
eq. ounce for the year.
- As planned, sustaining capital and sustaining lease payments
increased significantly in the quarter, primarily related to the
completion of deferred capital construction projects, including 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
works for the rescoped maintenance and warehouse facilities.
Sustaining capital is expected to achieve the higher end of reduced
annual sustaining capital estimates of $175 to $190 million (from
$210-$230 million).
- As a result of increased sustaining capital spend in the
quarter to complete substantially all deferred construction costs,
AISC are expected to increase significantly for the quarter, but be
slightly below annual guidance estimates of $1,690 and $1,790 per
gold eq. ounce for the year due to lower than planned capital
spend.
- Growth capital for the year is expected to be 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.
During the quarter, the Company continued to advance a
comprehensive mine optimization study that includes a review of
alternative open pit and underground mining scenarios with the
overall objective of improving the return on investment over the
life of the mine. The results of the study are scheduled for
release 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 Mine Operational
Highlights
New Afton Mine
Q4 19
FY 2019
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.
79.4
75 - 85
Copper sold (Mlbs)
17.3
76.4
-
Average realized gold price, per
ounce
1,365
1,348
-
Average realized copper price,
per pound
2.68
2.71
-
- 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 Operating
KPI’s
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. production (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.
- Total cash costs are expected to increase for the quarter and
be slightly above guidance of $600 to $640 per gold eq. ounce for
the year, primarily due to the lower gold eq. ounces related to the
lower copper price.
- Sustaining capital and sustaining lease payments remained
consistent in the quarter and is expected to be below annual
guidance of $45 to $55 million for the year, primarily 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 are expected to increase for the quarter and achieve the
low end of annual guidance of $810 to $890 per gold eq. ounce.
- Growth capital increased for the quarter, primarily related to
C-zone development but is expected to be below annual guidance of
$40 to $45 million for the year 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 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 are scheduled for release 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 2020 upon permit issuance.
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 13, 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: the timing of
the Company’s release of fourth quarter and year-end financial
results, 2020 operational outlook, updated mineral resources and
reserves and results of the updated Life of Mine plans for the
Rainy River and New Afton Mines, the Company shifting focus from
stabilizing the operation to optimizing open pit mining
productivity and unit cost performance, and the Company continuing
to advance C-zone development and launching strategic drilling
programs at both mines to extend mine life.
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 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 New Afton Mine, Rainy River
Mine and Blackwater project being consistent with New Gold’s
current expectations; and (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.
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 the
start of production of a mine, such as Rainy River, (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
Annual Information Form, MD&A 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.
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, 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. The MD&A for the period covered by this press
release will contain a clear quantitative reconciliation from the
non-GAAP measure to the most directly comparable measure in IFRS.
For reference, please see the quantitative reconciliations of
non-GAAP measures to the most directly comparable measures in IFRS
contained in the Company’s MD&A for the three and nine months
ended September 30, 2019 available on the Company’s profile on
SEDAR at www.sedar.com.
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.
Unless otherwise indicated, all AISC information in this news
release is on a gold eq. ounce basis. 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. 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 and Growth Capital
"Sustaining capital" is a non-GAAP financial measure as well as
“sustaining lease” and “growth capital”. 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.
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
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, sustaining lease
and growth capital 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.
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. 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.
Technical Information
The scientific and technical information contained herein has
been reviewed and approved by Eric Vinet, Vice President of New
Gold. Mr. Vinet is a Professional Engineer and member of the Ordre
des ingénieurs du Québec. He is a "Qualified Person" for the
purposes of NI 43-101.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200117005068/en/
Anne Day Vice President, Investor Relations Direct: +1
(416) 324-6003 Email: anne.day@newgold.com
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