(All amounts are in U.S. dollars unless otherwise
indicated)
TORONTO, May 2, 2022 /PRNewswire/ - New Gold Inc.
("New Gold" or the "Company") (TSX: NGD) (NYSE:
NGD) reports first quarter results for the Company as of
March 31, 2022. The Company will host
a conference call and webcast today at 8:30
am Eastern Time to discuss the first quarter consolidated
results (details are provided at the end of this news release). For
detailed information, please refer to the Company's First 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 First Quarter
Highlights
- Gold equivalent1 ("gold eq.") production of 87,696
ounces (68,101 ounces of gold, 8.2 million pounds of copper and
109,511 ounces of silver)
- Operating expenses of $1,029 per
gold eq. ounce
- All-in sustaining costs2 of $1,778 per gold eq. ounce, including total cash
costs2 of $1,069 per gold
eq. ounce
- Average realized gold price2 of $1,897 per ounce and average realized copper
price2 of $4.53 per
pound
- Cash generated from operations of $68
million, or $0.10 per
share
- Cash generated from operations, before changes in non-cash
operating working capital2 of $66
million, or $0.10 per
share
- Net loss of $8 million, or
($0.01) per share
- Adjusted net earnings2 of $10
million, or $0.02 per
share
- March 31, 2022 cash and cash
equivalents of $432 million
"The first quarter saw New Gold continue to advance our
objectives with a focus on delivering on our 2022 plan and securing
and extending the Company's longer-term future," stated
Renaud Adams, President & CEO.
"We delivered solid total gold production at Rainy River, despite an increase in COVID-19
cases and during a quarter in which capitalized waste stripping was
prioritized. While we faced the inflationary challenges
experienced across the industry, our teams remained disciplined
with their objectives and with the benefit of a weaker Canadian
dollar, delivered strong operating cash flow in the first quarter.
We currently expect to deliver on our 2022 guidance, and our
operations continue to review optimization opportunities and assess
cost reduction initiatives to mitigate against inflationary
pressures. We also continued to advance our longer-term
priorities, including advancing the development of the Intrepid
underground zone at Rainy River
and the B3 ramp-up and C-Zone development at New Afton."
"Additionally, we continue to transform the future of the
Company, both operationally and financially. During the first
quarter, our team delivered an updated Rainy River Technical
Report, extending Rainy River's
mine life to 2031, which is another positive milestone for future
production, and something we will continue to build on. We added an
experienced Chief Operating Officer which will be invaluable to the
Company as we continue to advance multiple projects at both sites.
We also announced our intention to redeem the remaining
$100 million aggregate principal
amount of our outstanding 2025 senior notes in mid-May, further
improving our financial flexibility during this period of
optimization for our Company," added Mr. Adams.
Consolidated Financial Highlights
|
Q1
2022
|
Q1
2021
|
Revenue ($M)
|
174.7
|
164.9
|
Operating expenses
($M)
|
95.2
|
93.9
|
Net (loss) earnings
($M)
|
(7.8)
|
15.1
|
Net (loss) earnings,
per share ($)
|
(0.01)
|
0.02
|
Adj. net earnings
($M)2
|
10.3
|
8.1
|
Adj. net earnings, per
share ($)2
|
0.02
|
0.01
|
Operating cash flow
($M)
|
67.8
|
53.3
|
Operating cash flow,
per share ($)
|
0.10
|
0.08
|
Cash generated from
operations, before changes
in non-cash operating working capital ($M)2
|
66.4
|
63.7
|
Cash generated from
operations, before changes in
non-cash operating working capital, per share
($)2
|
0.10
|
0.09
|
- Revenues increased over the prior-year period due to higher
gold and copper prices and higher gold sales volume, partially
offset by lower copper sales volume.
- Operating expenses were consistent with the prior-year
period.
- Net loss for the quarter compared to net earnings in the
prior-year period primarily due to an unrealized loss on the
revaluation of the gold stream obligation derivative resulting from
the updated Technical Report for Rainy
River.
- Adjusted net earnings2 increased over the prior-year
period due to higher revenues, partially offset by higher
depreciation and depletion and exploration.
- Operating cash flow increased over the prior-year period due to
higher revenues and negative working capital movements in the
prior-year period.
Consolidated Operational Highlights
|
Q1
2022
|
Q1
2021
|
Gold eq. production
(ounces)1
|
87,696
|
96,026
|
Gold eq. sold
(ounces)1
|
92,536
|
91,818
|
Gold production
(ounces)
|
68,101
|
66,650
|
Gold sold
(ounces)
|
70,562
|
63,539
|
Copper production
(Mlbs)
|
8.2
|
13.8
|
Copper sold
(MIbs)
|
9.2
|
13.3
|
Gold revenue, per ounce
($)
|
1,881
|
1,769
|
Copper revenue, per
pound ($)
|
4.26
|
3.62
|
Average realized gold
price, per ounce ($)2
|
1,897
|
1,788
|
Average realized copper
price, per pound ($)2
|
4.53
|
3.83
|
Operating expenses, per
gold eq. ounce ($)
|
1,029
|
1,022
|
Total cash costs, per
gold eq. ounce ($)2
|
1,069
|
1,067
|
Depreciation and
depletion, per gold eq. ounce ($)
|
529
|
498
|
All-in sustaining
costs, per gold eq. ounce ($)2
|
1,778
|
1,550
|
Sustaining capital and
sustaining leases ($M)2
|
55.5
|
37.9
|
Growth capital
($M)2
|
22.9
|
18.5
|
Total capital and
leases ($M)
|
78.4
|
56.4
|
Rainy River Mine
Operational Highlights
Rainy River
Mine
|
Q1
2022
|
Q1
2021
|
Gold eq. production
(ounces)1
|
59,895
|
56,513
|
Gold eq. sold
(ounces)1
|
61,684
|
53,577
|
Gold production
(ounces)
|
58,834
|
54,656
|
Gold sold
(ounces)
|
60,635
|
51,796
|
Gold revenue, per ounce
($)
|
1,891
|
1,786
|
Average realized gold
price, per ounce ($)2
|
1,891
|
1,786
|
Operating expenses, per
gold eq. ounce ($)
|
948
|
1,006
|
Total cash costs, per
gold eq. ounce ($)2
|
948
|
1,006
|
Depreciation and
depletion, per gold eq. ounce ($)
|
628
|
635
|
All-in sustaining
costs, per gold eq. ounce ($)2
|
1,592
|
1,586
|
Sustaining capital and
sustaining leases ($M)2
|
37.2
|
29.3
|
Growth capital
($M)2
|
4.9
|
1.3
|
Total capital and
leases ($M)
|
42.2
|
30.6
|
Operating Key Performance Indicators
Rainy River Mine (Open
Pit Mine only)
|
Q1
2022
|
Q1
2021
|
Tonnes mined per day
(ore and waste)
|
118,657
|
150,767
|
Ore tonnes mined per
day
|
20,019
|
35,681
|
Operating waste tonnes
per day
|
35,199
|
65,643
|
Capitalized waste
tonnes per day
|
63,438
|
49,442
|
Total waste tonnes per
day
|
98,637
|
115,085
|
Strip ratio
(waste:ore)
|
4.93
|
3.23
|
Tonnes milled per
calendar day
|
24,318
|
26,301
|
Gold grade milled
(g/t)
|
0.92
|
0.80
|
Gold recovery
(%)
|
91
|
89
|
- Open pit tonnes mined per day decreased over the prior-year
period due to an increase in COVID-19 cases at site in the first
part of the quarter impacting equipment utilization, and cold
weather conditions affecting drilling productivity. Approximately
1.8 million ore tonnes and 8.9 million waste tonnes (including 5.7
million capitalized waste tonnes) were mined from the open pit at
an average strip ratio of 4.93:1. During the second half of the
year, the strip ratio is expected to decrease as the mine is
prioritizing capitalized waste during the colder weather
months.
- Tonnes milled per calendar day decreased over the prior-year
period due to mechanical maintenance on both the SAG mill and
crusher, and cold weather conditions impacting stockpile
movement.
- Gold eq.1 production was 59,895 ounces (58,834
ounces of gold and 79,621 ounces of silver), an increase over the
prior-year period due to higher gold grade and gold recovery,
partially offset by lower tonnes processed. Production is expected
to strengthen in the second half of the year and represent
approximately 55% of the annual production.
- Operating expense per gold eq. ounce decreased over the
prior-year period primarily due to higher sales volume.
- All-in sustaining costs2 per gold eq. ounce slightly
increased over the prior-year period due to higher sustaining
capital spend, partially offset by higher sales volume.
- Total capital and leases increased over the prior-year period
due to higher sustaining and growth capital. Sustaining capital
primarily related to $20 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 512 metres.
- Free cash flow2 for the quarter was $15 million, an increase over the prior-year
period due to an increase in cash generated from operations,
partially offset by higher capital spend.
New Afton Mine
Operational Highlights
New Afton
Mine
|
Q1
2022
|
Q1
2021
|
Gold eq. production
(ounces)1
|
27,800
|
39,512
|
Gold eq. sold
(ounces)1
|
30,852
|
38,241
|
Gold production
(ounces)
|
9,267
|
11,994
|
Gold sold
(ounces)
|
9,927
|
11,744
|
Copper production
(Mlbs)
|
8.2
|
13.8
|
Copper sold
(Mlbs)
|
9.2
|
13.3
|
Gold revenue, per ounce
($)
|
1,818
|
1,698
|
Copper revenue, per
ounce ($)
|
4.26
|
3.62
|
Average realized gold
price, per ounce ($)2
|
1,935
|
1,799
|
Average realized copper
price, per pound ($)2
|
4.53
|
3.83
|
Operating expenses, per
gold eq. ounce ($)
|
1,192
|
1,046
|
Total cash costs, per
gold eq. ounce ($)2
|
1,313
|
1,153
|
Depreciation and
depletion, per gold eq. ounce ($)
|
325
|
296
|
All-in sustaining
costs, per gold eq. ounce ($)2
|
1,913
|
1,388
|
Sustaining capital and
sustaining leases ($M)2
|
17.8
|
8.5
|
Growth capital
($M)2
|
18.0
|
17.2
|
Total capital and
leases ($M)
|
35.9
|
25.8
|
Operating Key Performance Indicators
New Afton
Mine
|
Q1
2022
|
Q1
2021
|
Tonnes mined per day
(ore and waste)
|
7,028
|
11,395
|
Tonnes milled per
calendar day
|
10,299
|
13,564
|
Gold grade milled
(g/t)
|
0.38
|
0.39
|
Gold recovery
(%)
|
83
|
79
|
Copper grade milled
(%)
|
0.49
|
0.64
|
Copper recovery
(%)
|
81
|
80
|
- Underground tonnes mined per day decreased over the prior-year
period due to the planned completion of Lift 1 mining activities,
with the exception of the recovery level, and the continued ramp-up
of the B3 zone.
- Tonnes milled per calendar day decreased over the prior-year
period and is currently incorporating lower grade surface
stockpiles to supplement the overall lower tonnes mined.
- Gold eq.1 production was 27,800 ounces (9,267 ounces
of gold and 8.2 million pounds of copper), a decrease over the
prior-year period due to lower tonnes processed and lower copper
grade.
- Operating expense per gold eq. ounce increased over the
prior-year period, primarily due to lower sales volume.
- All-in sustaining costs2 per gold eq. ounce
increased over the prior-year period due to higher sustaining
capital spend and lower sales volume.
- Total capital and leases increased over the prior-year period,
primarily due to higher sustaining capital spend. Sustaining
capital primarily related to B3 mine development and tailings
management and stabilization activities. Growth capital2
primarily related to C-Zone development, which advanced 931 metres
in the quarter.
- Free cash flow2 for the quarter was a net outflow of
$33 million, a decrease over the
prior-year period due to lower revenue, planned higher capital
spend, and an increase in the free cash flow interest payment.
First 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 first 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=1536194&tp_key=0e2e702de9
- 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
93425158
- A recorded playback of the conference call will be available
until June 2, 2022 by calling North
American toll free 1-888-390-0541, or 1-416-764-8677 outside of the
U.S. and Canada, passcode 425158.
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 a 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 Q1 2022 includes production of 79,621
ounces of silver (78,640 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
Q1 2022 includes 8.2 million pounds of copper produced (9.2 million
pounds sold) and 29,890 ounces of silver produced (32,575 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.
|
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
March 31
|
(in millions of U.S.
dollars, except where noted)
|
2022
|
2021
|
CONSOLIDATED OPEX,
CASH COST AND ALL-IN SUSTAINING COSTS RECONCILIATION
|
|
|
Operating
expenses
|
95.2
|
93.9
|
Gold equivalent ounces
sold1
|
92,536
|
91,818
|
Operating expenses
per gold equivalent ounce sold ($/ounce)
|
1,029
|
1,022
|
Operating
expenses
|
95.2
|
93.9
|
Treatment and refining
charges on concentrate sales
|
3.7
|
4.1
|
Total cash
costs
|
99.0
|
98.0
|
Gold equivalent ounces
sold1
|
92,536
|
91,818
|
Total cash costs per
gold equivalent ounce sold ($/ounce)2
|
1,069
|
1,067
|
Sustaining capital
expenditures2
|
52.5
|
35.1
|
Sustaining exploration
- expensed
|
0.3
|
0.3
|
Sustaining
leases2
|
2.6
|
2.7
|
Corporate G&A
including share-based compensation
|
6.9
|
3.8
|
Reclamation
expenses
|
3.3
|
2.3
|
Total all-in
sustaining costs
|
164.6
|
142.3
|
Gold equivalent ounces
sold1
|
92,536
|
91,818
|
All-in sustaining
costs per gold equivalent ounce sold
($/ounce)2
|
1,778
|
1,550
|
|
Three months ended
March 31
|
(in millions of U.S.
dollars, except where noted)
|
2022
|
2021
|
RAINY RIVER OPEX,
CASH COSTS AND AISC RECONCILIATION
|
|
|
Operating
expenses
|
58.4
|
53.9
|
Gold equivalent ounces
sold1
|
61,684
|
53,577
|
Operating expenses
per unit of gold sold ($/ounce)
|
948
|
1,006
|
Operating
expenses
|
58.4
|
53.9
|
Total cash
costs
|
58.5
|
53.9
|
Gold equivalent ounces
sold1
|
61,684
|
53,577
|
Total cash costs per
gold equivalent ounce sold ($/ounce)2
|
948
|
1,006
|
Sustaining capital
expenditures2
|
34.8
|
26.8
|
Sustaining
leases2
|
2.3
|
2.5
|
Reclamation
expenses
|
2.6
|
1.8
|
Total all-in
sustaining costs
|
98.2
|
85.0
|
Gold equivalent ounces
sold1
|
61,684
|
53,577
|
All-in sustaining
costs per gold equivalent ounce sold
($/ounce)2
|
1,592
|
1,586
|
|
Three months ended
March 31
|
(in millions of U.S.
dollars, except where noted)
|
2022
|
2021
|
NEW AFTON OPEX, CASH
COSTS AND AISC RECONCILIATION
|
|
|
Operating
expenses
|
36.8
|
40.0
|
Gold equivalent ounces
sold1
|
30,852
|
38,241
|
Operating expenses
per unit of gold sold ($/ounce)
|
1,192
|
1,046
|
Operating
expenses
|
36.8
|
40.0
|
Treatment and refining
charges on concentrate sales
|
3.7
|
4.1
|
Total cash
costs
|
40.5
|
44.1
|
Gold equivalent ounces
sold1
|
30,852
|
38,241
|
Total cash costs per
gold equivalent ounce sold ($/ounce)2
|
1,313
|
1,153
|
Sustaining capital
expenditures2
|
17.7
|
8.3
|
Sustaining
leases2
|
0.1
|
0.1
|
Reclamation
expenses
|
0.7
|
0.5
|
Total all-in
sustaining costs
|
59.0
|
53.1
|
Gold equivalent ounces
sold1
|
30,852
|
38,241
|
All-in sustaining
costs per gold equivalent ounce sold
($/ounce)2
|
1,913
|
1,388
|
Sustaining Capital Expenditures Reconciliation Table
|
Three months ended
March 31
|
(in millions of U.S.
dollars, except where noted)
|
2022
|
2021
|
TOTAL SUSTAINING
CAPITAL EXPENDITURES
|
|
|
Mining interests per
consolidated statement of cash flows
|
75.6
|
53.8
|
New Afton growth
capital expenditures2
|
(18.0)
|
(17.2)
|
Rainy River growth
capital expenditures2
|
(4.9)
|
(1.3)
|
Sustaining capital
expenditures2
|
52.7
|
35.3
|
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" exclude "other
gains and losses" as per Note 3 of the Company's consolidated
financial statements; and loss on redemption of long-term
debt. Net earnings have been adjusted, including the
associated tax impact, for 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
March 31
|
(in millions of U.S.
dollars, except where noted)
|
2022
|
2021
|
ADJUSTED NET
EARNINGS (LOSS) RECONCILIATION
|
|
|
(Loss) earnings before
taxes
|
(7.3)
|
19.0
|
Other (gains)
losses
|
18.3
|
(8.7)
|
Adjusted net
earnings before taxes
|
11.0
|
10.3
|
Income tax
expense
|
(0.5)
|
(3.9)
|
Income tax
adjustments
|
(0.2)
|
1.7
|
Adjusted income tax
expense2
|
(0.7)
|
(2.2)
|
Adjusted net
earnings2
|
10.3
|
8.1
|
Adjusted earnings
per share (basic and diluted)2
|
0.02
|
0.01
|
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
March 31
|
(in millions of U.S.
dollars)
|
2022
|
2021
|
CASH
RECONCILIATION
|
|
|
Cash generated from
operations
|
67.8
|
53.3
|
Change in non-cash
operating working capital
|
(1.4)
|
10.4
|
Cash generated from
operations, before changes in non-cash operating working
capital2
|
66.4
|
63.7
|
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
March 31, 2022
|
(in millions of U.S.
dollars)
|
Rainy
River
|
New
Afton
|
Other
|
Total
|
FREE CASH FLOW
RECONCILIATION
|
|
|
|
|
Cash generated from
operations
|
62.9
|
15.1
|
(10.3)
|
67.8
|
Less Mining interest
capital expenditures
|
(39.9)
|
(35.8)
|
—
|
(75.6)
|
Add Proceeds of sale
from other assets
|
0.1
|
—
|
—
|
0.1
|
Less Lease
payments
|
(2.3)
|
(0.1)
|
(0.1)
|
(2.5)
|
Less Cash settlement of
non-current derivative financial liabilities
|
(6.2)
|
(12.4)
|
—
|
(18.6)
|
Free Cash
Flow2
|
14.6
|
(33.2)
|
(10.4)
|
(28.8)
|
|
Three months ended
March 31, 2021
|
(in millions of U.S.
dollars)
|
Rainy
River
|
New
Afton
|
Other
|
Total
|
FREE CASH FLOW
RECONCILIATION
|
|
|
|
|
Cash generated from
operations
|
29.9
|
29.2
|
(5.8)
|
53.3
|
Less Mining interest
capital expenditures
|
(28.1)
|
(25.6)
|
(0.1)
|
(53.8)
|
Add Proceeds of sale
from other assets
|
—
|
0.1
|
—
|
0.1
|
Less Lease
payments
|
(2.5)
|
(0.1)
|
(0.1)
|
(2.7)
|
Less Cash settlement of
non-current derivative financial liabilities
|
(7.1)
|
(4.9)
|
—
|
(12.0)
|
Free Cash
Flow2
|
(7.8)
|
(1.3)
|
(6.0)
|
(15.1)
|
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
March 31
|
(in millions of U.S.
dollars, except where noted)
|
2022
|
2021
|
TOTAL AVERAGE
REALIZED PRICE
|
|
|
Revenue from gold
sales
|
132.8
|
112.4
|
Treatment and refining
charges on gold concentrate sales
|
1.2
|
1.2
|
Gross revenue from
gold sales
|
134.0
|
113.6
|
Gold ounces
sold
|
70,562
|
63,539
|
Total average
realized price per gold ounce sold
($/ounce)2
|
1,897
|
1,788
|
|
Three months ended
March 31
|
(in millions of U.S.
dollars, except where noted)
|
2022
|
2021
|
RAINY RIVER AVERAGE
REALIZED PRICE
|
|
|
Revenue from gold
sales
|
114.7
|
92.5
|
Gold ounces
sold
|
60,635
|
51,796
|
Rainy River average
realized price per gold ounce sold
($/ounce)2
|
1,891
|
1,786
|
|
Three months ended
March 31
|
(in millions of U.S.
dollars, except where noted)
|
2022
|
2021
|
NEW AFTON AVERAGE
REALIZED PRICE
|
|
|
Revenue from gold
sales
|
18.1
|
19.9
|
Treatment and refining
charges on gold concentrate sales
|
1.2
|
1.2
|
Gross revenue from
gold sales
|
19.3
|
21.1
|
Gold ounces
sold
|
9,927
|
11,744
|
New Afton average
realized price per gold ounce sold
($/ounce)2
|
1,935
|
1,799
|
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 33 in the
MD&A for the three months and year ended December 31, 2021 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: expectations
regarding the Company's 2022 guidance; the Company's strategic
plans and outlook both operationally and financially for the
future; the continued ramp-up of the B3 zone at New Afton;
production expectations for the second half of the year; and the
anticipated decrease in the strip ratio during the second half of
the year.
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 contained in this news
release has been reviewed and approved by Eric Vinet, Senior Vice President, Operations 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 National Instrument 43-101 – Standards of
Disclosure for Mineral Projects.
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SOURCE New Gold Inc.