(All dollar figures are in US dollars unless otherwise
indicated)
TORONTO, Feb. 15, 2017 /PRNewswire/ - New Gold Inc. ("New
Gold") (TSX:NGD) (NYSE MKT:NGD) today announces its 2016 fourth
quarter and full-year financial results and updates its year-end
reserve and resource estimates. The company previously announced
its preliminary 2016 operational results and 2017 guidance on
January 30, 2017.
2016 FULL-YEAR HIGHLIGHTS
- Full-year gold production of 381,663 ounces achieved the
mid-point of the guidance range of 360,000 to 400,000 ounces
- Copper production of 102 million pounds exceeded the high end
of the guidance range of 81 to 93 million pounds by 10%
- 2016 operating expense of $640
per gold ounce and $1.14 per copper
pound
- 2016 delivered record low all-in sustaining costs(1)
of $692 per ounce, including total
cash costs(2) of $349 per
ounce
- Cash generated from operations before changes in non-cash
operating working capital(3) of $302 million
- Cash generated from operations of $282
million
- Adjusted net earnings(4) of $24 million, or $0.05 per share
- Net earnings of $3 million, or
$0.01 per share
- Year-end cash and cash equivalents of $186 million
2016 FOURTH QUARTER HIGHLIGHTS
- Fourth quarter production of 95,883 ounces of gold and 26
million pounds of copper
- Fourth quarter operating expense of $780 per gold ounce and $1.58 per copper pound
- Fourth quarter all-in sustaining costs of $619 per ounce, including total cash costs of
$360 per ounce
- Cash generated from operations before changes in non-cash
operating working capital of $69
million
- Cash generated from operations of $52
million
- Adjusted net loss of $2 million,
or $nil per share
- Net loss of $20 million, or
$0.04 per share
MINERAL RESERVES AND RESOURCES
- 2016 year-end mineral reserves of 14.7 million ounces of gold,
1.1 billion pounds of copper and 76 million ounces of silver
"Our solid operating performance in 2016 enabled us to deliver
record low all-in sustaining costs, resulting in strong margins and
cash flow," stated Hannes Portmann,
President and Chief Executive Officer. "Our three primary areas of
focus in 2017 are enhancing our financial flexibility, executing
our updated Rainy River plan and
continuing to deliver operationally. Looking further ahead, we feel
well positioned for the long-term with a robust gold reserve base
of 15 million ounces."
2016 FINANCIAL RESULTS
|
|
|
|
Three months ended
December 31
|
Year ended
December 31
|
(in millions of
U.S. dollars, except per share amounts)
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
Revenues
|
$170.3
|
$199.0
|
$683.8
|
$712.9
|
|
|
|
|
|
Operating
margin(6)
|
55.6
|
82.6
|
318.0
|
293.3
|
|
|
|
|
|
Adjusted net
earnings/(loss)
|
(2.3)
|
2.6
|
24.3
|
(10.9)
|
Adjusted net
earnings/(loss) per share
|
$nil
|
0.01
|
0.05
|
(0.02)
|
|
|
|
|
|
Net (loss)
earnings
|
(19.9)
|
(9.5)
|
2.7
|
(201.4)
|
Net (loss) earnings
per basic share
|
(0.04)
|
(0.02)
|
0.01
|
(0.40)
|
|
|
|
|
|
Cash generated from
operations before changes in non-cash operating working
capital
|
68.5
|
87.9
|
301.8
|
276.4
|
Cash generated from
operations
|
51.7
|
84.9
|
282.2
|
262.6
|
Fourth quarter revenues decreased by $29
million, or 14%, relative to the prior-year quarter, as the
benefit from higher gold and silver prices and higher copper sales
volumes was more than offset by lower gold and silver sales
volumes. Fourth quarter production was in line with the first three
quarters of 2016, however, production was lower than the same
period last year, which was a record quarter for New Gold. Relative
to the fourth quarter of 2015, the average realized price increased
by $117 per ounce of gold, or 11%,
$0.29 per pound of copper, or 13%,
and $2.36 per ounce of silver, or
16%. The benefit of this was offset by a 29% decrease in gold sales
to 93,936 ounces mainly attributable to the Peak Mines which
benefitted from mining and processing significantly higher gold
grade material in the prior-year and Cerro San Pedro transitioning
into residual leaching. New Gold's 2016 revenues of $684 million decreased relative to 2015, as the
benefit from higher gold and silver prices and higher copper sales
volumes was more than offset by lower gold and silver sales volumes
due to the planned decrease at Cerro San Pedro.
New Gold's fourth quarter operating margin decreased by
$27 million relative to the
prior-year quarter as a result of the $29
million decrease in revenues. The company's 2016 operating
margin increased by $25 million, or
8%, relative to the prior year as a result of lower operating
expenses, resulting from a reduction in mining activity at Cerro
San Pedro and the company's business improvement initiatives,
partially offset by lower revenues.
New Gold had an adjusted net loss of $2
million, or $nil per share, in the fourth quarter of 2016
relative to adjusted net earnings of $3
million, or $0.01 per share,
in the prior-year quarter. Quarterly adjusted net earnings were
impacted by the combination of a $29
million decrease in revenues from lower production and an
aggregate $4 million increase in
exploration, business development, and corporate general and
administrative expenses. These items were partially offset by a
total $25 million decrease in
operating expenses, depreciation and depletion due to lower
production, and a $6 million decrease
in finance costs as more interest has been capitalized to
Rainy River. The company
reported a net loss of $20 million,
or $0.04 per share, in the fourth
quarter. The net loss included the impact of a non-cash
$27 million inventory write-down at
Cerro San Pedro, a $7 million pre-tax
foreign exchange loss and a non-cash $6
million after-tax impairment charge related to an
early-stage royalty interest at Rio Figueroa, which was partially
offset by a $16 million pre-tax
unrealized gain on the company's gold price option contracts and a
$3 million pre-tax unrealized gain on
the company's gold stream obligation.
In 2016, New Gold had adjusted net earnings of $24 million, or $0.05 per share, relative to an adjusted net loss
of $11 million, or $0.02 per share, in the prior year. The increase
in adjusted net earnings was driven by a net $54 million decrease in operating expenses,
depreciation and depletion and a $28
million decrease in finance costs as more interest has been
capitalized to Rainy River. These
items were partially offset by a $29
million decrease in revenues from lower production, a
$12 million increase in adjusted
income tax expense and a $7 million
increase in exploration, business development, and corporate
general and administrative expenses. The company's 2016 reported
net earnings of $3 million, or
$0.01 per share, were impacted by the
non-cash $27 million inventory
write-down at Cerro San Pedro and the non-cash $6 million after-tax impairment charge related to
Rio Figueroa. In 2015, the net loss was driven by the non-cash
$14 million after-tax impairment
charge related to the Peak Mines, the non-cash $13 million inventory write-down at Cerro San
Pedro, a $98 million pre-tax foreign
exchange loss and a non-cash $99
million after-tax loss associated with the sale of El
Morro.
The company's fourth quarter cash generated from operations
before changes in non-cash operating working capital of
$69 million was $19 million, or 22%, lower than the prior-year
period as the impact of lower revenues was only partially offset by
the decrease in expense. Cash generated from operations in the
fourth quarter of 2016 was $52
million relative to $85
million in the prior-year quarter. The major working capital
difference at December 31, 2016 was
an outstanding concentrate receivable of $21
million at New Afton which was collected in January 2017.
New Gold's 2016 cash generated from operations before changes in
non-cash operating working capital of $302
million was $25 million, or
9%, higher than 2015. The increase was directly attributable to the
higher operating margin. Full-year cash generated from operations
of $282 million increased by
$20 million compared to 2015.
FINANCIAL UPDATE
New Gold's 2016 year-end cash and cash equivalents were
$186 million. During the fourth
quarter, the company received the remaining $75 million of the stream deposit from RGLD Gold
AG, a wholly-owned subsidiary of Royal Gold Inc. and drew
$100 million from its $400 million revolving credit facility. At
December 31, 2016, an additional
$122 million of the facility was used
to issue letters of credit for closure obligations at the company's
producing mines and development projects, leaving $178 million undrawn.
In addition, on February 8, 2017,
New Gold announced that the company has entered into a binding
letter agreement with Goldcorp Inc. to the sell the company's gold
stream on the El Morro project for $65
million cash. Including the El Morro proceeds, the company's
pro forma liquidity totals $429
million (cash, undrawn credit facility and El Morro
proceeds) plus its expected free cash flow generation from its
operating mines in 2017.
In 2016, New Gold entered into gold price option contracts
covering 120,000 ounces of its first half 2017 production, with put
options at a strike price of $1,300
per ounce and call options at a strike price of $1,400 per ounce. The company has also fixed the
price for 31.7 million pounds of the company's first half 2017
copper production at $2.52 per pound.
These initiatives increase the company's cash flow certainty during
a portion of the remaining Rainy
River development period.
After formally establishing a business improvement function in
the second half of 2015, New Gold has continually looked for
opportunities to maximize free cash flow from its portfolio of
operating mines. One particularly successful business improvement
initiative has been at New Afton, where improved mining and milling
efficiencies have enabled the company to achieve significantly
higher-than-targeted mill throughput after the successful
completion of the mill expansion project in mid-2015. On a
consolidated basis, the success of the multiple active business
improvement initiatives was a key contributor to New Gold
delivering an all-in sustaining cost of $692 per ounce in 2016, which was well below the
company's mid-2016 updated guidance range of $750 to $790 per ounce.
In addition to the benefits of the ongoing business improvement
initiatives included in New Gold's 2017 guidance, the company is
actively evaluating further opportunities that could enhance cash
flow during the remaining Rainy
River construction period. The additional opportunities
being assessed include further process improvements at New Afton as
well as potential operating and capital cost savings at New Afton,
Mesquite and the Peak Mines. In aggregate, these initiatives could
have the potential to increase the 2017 free cash flow contribution
from New Gold's four operations by approximately $20 million.
Since the company's January 30,
2017 news release, with the sale of the El Morro stream, New
Gold has made solid progress in enhancing its liquidity
position. The company will continue to assess additional
opportunities to further increase its financial
flexibility.
At the end of 2016, the face value of the company's long-term
debt was $900 million (book value –
$890 million). The components of the
long-term debt include: $300 million
of 7.00% face value senior unsecured notes due in April of 2020,
$500 million of 6.25% face value
senior unsecured notes due in November of 2022 and $100 million drawn from the revolving credit
facility. The company currently has approximately 514 million
shares outstanding.
2016 OPERATIONAL RESULTS
|
|
|
|
Three months ended
December 31
|
Year ended
December 31
|
|
2016
|
2015
|
2016
|
2015
|
Operating
information
|
|
|
|
|
Gold
(ounces):
|
|
|
|
|
|
Produced
|
95,883
|
131,719
|
381,663
|
435,718
|
|
Sold
|
93,936
|
133,005
|
378,239
|
428,852
|
Copper (millions of
pounds):
|
|
|
|
|
|
Produced
|
25.6
|
28.8
|
102.3
|
100.0
|
|
Sold
|
24.6
|
25.5
|
99.2
|
92.9
|
Silver (millions of
ounces):
|
|
|
|
|
|
Produced
|
0.3
|
0.5
|
1.3
|
1.9
|
|
Sold
|
0.3
|
0.5
|
1.3
|
1.8
|
Revenue:
|
|
|
|
|
|
Gold
($/ounce)
|
1,176
|
1,067
|
1,219
|
1,120
|
|
Copper
($/pound)
|
2.22
|
1.96
|
2.03
|
2.21
|
|
Silver
($/ounce)
|
16.19
|
14.10
|
16.68
|
15.12
|
Average realized
price(5):
|
|
|
|
|
|
Gold
($/ounce)
|
1,211
|
1,094
|
1,255
|
1,149
|
|
Copper
($/pound)
|
2.45
|
2.16
|
2.23
|
2.42
|
|
Silver
($/ounce)
|
16.80
|
14.44
|
17.15
|
15.38
|
Operating
expense:
|
|
|
|
|
|
Gold
($/ounce)
|
780
|
614
|
640
|
647
|
|
Copper
($/pound)
|
1.58
|
1.21
|
1.14
|
1.36
|
|
Silver
($/ounce)
|
10.82
|
8.10
|
8.75
|
8.66
|
Total cash costs
($/ounce)(2)
|
360
|
389
|
349
|
443
|
All-in sustaining
costs ($/ounce)(1)
|
619
|
613
|
692
|
809
|
The company has included new revenue and cost disclosures,
namely, revenue and operating expense per ounce and per pound.
Revenue per ounce and per pound is net of treatment and refining
charges, whereas average realized price is before treatment and
refining charges are taken into account. Operating expense per
ounce and pound apportions the company's operating expense, as
shown on New Gold's consolidated income statement, to each metal on
a percentage of revenue basis.
The fourth quarter of 2016 delivered gold production of 95,883
ounces, resulting in full-year gold production of 381,663 ounces.
The combination of the Peak Mines' very strong year and solid
operating performances at New Afton and Cerro San Pedro enabled the
company to achieve the mid-point of its guidance range of 360,000
to 400,000 ounces. Full-year production was lower than 2015
primarily due to Cerro San Pedro's planned transition to residual
leaching in mid-2016.
New Gold's fourth quarter copper production of 26 million pounds
was consistent with the first three quarters of 2016 and slightly
below the prior-year quarter. Full-year copper production of 102
million pounds was in line with prior-year production and 10% above
the high end of the company's 2016 guidance range of 81 to 93
million pounds. Full-year silver production of 1.3 million ounces
was below the guidance range of 1.6 to 1.8 million ounces.
Operating expense per gold ounce during the fourth quarter
increased relative to the prior-year quarter primarily due to a
heap leach inventory write-down of $24
million at Cerro San Pedro. Operating expense per gold ounce
for the full year was in line with the prior year.
The company delivered fourth quarter all-in sustaining costs of
$619 per ounce, including total cash
costs of $360 per ounce, which was
the lowest cost quarter of the year and consistent with the
prior-year quarter. The company's strong fourth quarter performance
reduced New Gold's 2016 all-in sustaining costs to a record low
$692 per ounce, including total cash
costs of $349 per ounce. The
significant decrease in costs enabled New Gold to generate an
all-in sustaining cost margin of $563
per ounce, or 45%. The $117 per ounce
decrease in all-in sustaining costs relative to the prior year was
attributable to the combination of a $94 per ounce decrease in total cash costs,
primarily driven by significantly lower costs at the Peak Mines,
and a $27 million, or $23 per ounce, decrease in the company's
consolidated sustaining costs. Consolidated sustaining costs
include New Gold's consolidated sustaining capital, exploration,
general and administrative, and amortization of reclamation
expenditures.
As indicated in New Gold's 2016 second quarter results news
release, the company's original full-year guidance for consolidated
total cash costs and all-in sustaining costs was lowered by
$75 per ounce to $360 to $400 per ounce and $750 to $790 per ounce, respectively. The
company's full-year costs ultimately came in below the reduced cost
guidance. This was due to the positive impact of business
improvement initiatives leading to higher copper production and
lower sustaining costs, and higher realized copper and silver
prices only being partially offset by the appreciation of exchange
rates relative to what was assumed when setting guidance.
"2016 was a great operational year for New Gold," added
Raymond Threlkeld, Interim Chief
Operating Officer. "We are proud to extend our track record of
meeting or beating our operational guidance. I thank the team for
their hard work and for delivering these strong results."
For additional detail on the changes in production and costs at
New Gold's four operations in the fourth quarter and full year,
refer to the company's January 30,
2017 news release, New Gold Achieves 2016 Production
Guidance at Lower Costs, Provides Rainy River Update, 2017 Guidance
and Announces Board and Management Changes.
PROJECTS UPDATE
RAINY RIVER
Development activities at New Gold's Rainy River project, located in northwestern
Ontario, continue to advance and
the project is scheduled to transition from construction to
operation in the third quarter of 2017.
RAINY RIVER – 2016 KEY
HIGHLIGHTS
- Project spending during the fourth quarter totalled
$146 million, bringing 2016 full-year
capital spending at the project to $465
million
- Concrete placement, steelwork erection and cladding
complete
- SAG and ball mill shells in place
- Pre-leach thickener tank and leach tanks complete
- Power line completed and main substation has been
energized
- Installation of mechanical, piping, electrical and
instrumentation in processing facilities over 65% complete through
mid-February 2017
- Primary crusher and conveyor system over 80% complete
Mining activities at Rainy
River have progressed well to start 2017. From the beginning
of the year through the end of last week the company mined over 4
million tonnes of overburden and waste from the pit which was
slightly ahead of the tonnage targeted in New Gold's updated plan
announced on January 30, 2017. At the
same time, approximately 350,000m3 of construction
material has been placed at the starter tailings cell which is also
slightly ahead of plan. The contractor that will mine the peat and
basal till layers within the pit using smaller equipment has been
mobilized and is scheduled to begin work in the pit tomorrow, which
should result in increased daily mining rates by New Gold's team in
the coming weeks. The September start-up is based on an expectation
that the mining rate will continue to increase to an average of
approximately 120,000 tonnes per day over the next six months,
which includes both planned productivity gains and the impact of
changing weather conditions through the spring.
All of the key structural components of the process facilities
have been completed and the setting of mechanical equipment and
installation of piping, electrical and instrumentation services is
well advanced. New Gold plans to complete the testing of the
various components of the process facility using a staged approach,
after which the company will complete dry and wet commissioning of
the full process circuit.
The primary crusher and conveyor system are over 80% complete
and commissioning of the crusher is scheduled to commence in March
of 2017. Thereafter, the commissioning of the ball and SAG mills
should start during the second quarter. Finally, the refining
portion of the circuit should be completed and ready to begin
commissioning early in the third quarter. Dry and wet commissioning
of the full process circuit is scheduled to take place in August,
which should leave approximately one month before targeted first
production for any required adjustments to the circuit.
The company continues to work closely with Environment and
Climate Change Canada towards obtaining an amendment to Schedule 2
of the Metal Mining Effluent Regulations, required to close two
small creeks and deposit tailings, which is targeted to be received
in the third quarter of 2017. However, as previously disclosed, New
Gold's redesign of the tailings management facility incorporated a
starter tailings cell within the broader facility that does not
require a Schedule 2 amendment from the Federal government. The
inclusion of a starter cell is an approach that has been used at
other Canadian mining operations. Based on its location and scale,
the starter cell would provide capacity for approximately six
months of tailings. Once the Schedule 2 amendment is received, New
Gold would need approximately three months, in good construction
weather, to complete construction of the tailings
dam.
Based on the company's targeted September production start, New
Gold expects total 2017 production at Rainy River to be 50,000 to 60,000 ounces.
Approximately 15,000 ounces are planned for the pre-commercial
production period with revenue for this production being credited
against the development capital estimate.
Over Rainy River's targeted two
months of commercial production in 2017, the operating expense is
expected to be $905 to $945 per gold
ounce with all-in sustaining costs expected to be $1,200 to $1,240 per ounce. Both the operating
expense and all-in sustaining costs are well above the levels
targeted once Rainy River reaches
full capacity. The 2017 costs are negatively impacted by lower gold
sales resulting from the combination of throughput being lower than
design during commissioning and ramp-up and planned lower grade to
be processed during the commissioning phase. In addition, there is
approximately $12 million, or
$305 per ounce, of sustaining costs
budgeted during the commercial production period.
Project spending at Rainy River
during the fourth quarter totalled $146
million, bringing 2016 full-year capital spending at the
project to $465 million. The total
Rainy River project development
capital spending through the end of 2016 was $777 million.
Based on a C$1.30/US$ exchange
rate, the remaining capital cost from the beginning of 2017 to the
targeted November commercial production is estimated to be
approximately $515 million, inclusive
of $40 million of contingency.
Though the Rainy River construction has presented challenges,
New Gold continues to look forward to the expected growth in the
company's production and cash flow once Rainy River transitions into operation later
this year. Rainy River has
multiple important asset qualities including its great
jurisdiction, significant annual production potential, long
estimated reserve life and continued exploration potential.
2016 YEAR-END MINERAL RESERVES AND RESOURCES AND 2017
EXPLORATION PLANS
|
|
|
|
|
As at December 31,
2016
|
|
As at December 31,
2015
|
|
Gold
Koz
|
Silver
Moz
|
Copper
Mlbs
|
|
Gold
Koz
|
Silver
Moz
|
Copper
Mlbs
|
|
|
|
|
|
|
|
|
Proven and
Probable reserves
|
14,704
|
76
|
1,113
|
|
14,985
|
76
|
1,193
|
New Afton
|
1,161
|
4
|
1,033
|
|
1,228
|
4
|
1,112
|
Mesquite
|
1,179
|
-
|
-
|
|
1,492
|
-
|
-
|
Peak Mines
|
251
|
1
|
80
|
|
267
|
1
|
82
|
Cerro San
Pedro
|
-
|
-
|
-
|
|
13
|
-
|
-
|
Rainy
River
|
3,943
|
10
|
-
|
|
3,814
|
9
|
-
|
Blackwater
|
8,170
|
61
|
-
|
|
8,170
|
61
|
-
|
|
|
|
|
|
|
|
|
Measured and
Indicated resources (exclusive of reserves)
|
6,222
|
22
|
1,121
|
|
6,659
|
34
|
1,065
|
|
|
|
|
|
|
|
|
Inferred
resources
|
1,644
|
5
|
291
|
|
1,844
|
24
|
194
|
|
|
|
|
|
|
|
|
Note: See the
Detailed Mineral Reserve and Resource Tables and the Notes to
Mineral Reserve and Resource Estimates at the end of this news
release for further detail regarding December 31, 2016 estimates. For details
regarding December 31, 2015 Mineral Reserve and Resource estimates,
including a breakdown by category, refer to New Gold's Annual Information Form for the year ended
December 31, 2015, dated March 29, 2016.
|
2016 YEAR-END MINERAL RESERVES AND RESOURCES
As part of New Gold's estimate of 2016 year-end mineral reserves
and resources, the company increased the gold price assumptions
used to estimate mineral reserves and resources by $50 per ounce to $1,250 per ounce and $1,350 per ounce, respectively. The updated gold
reserve pricing assumption is consistent with long-term consensus
estimates. The reserve pricing assumptions for copper of
$2.75 per pound and silver of
$15.00 per ounce remained the same as
2015. In calculating its cut-off grades for 2016 year-end mineral
reserve and resource estimates, the company used exchange rate
assumptions of $1.25, $1.30 and $17.00
for the Canadian dollar, Australian dollar and Mexican peso
relative to the U.S. dollar.
On a consolidated basis, the company's total gold mineral
reserves of 14.7 million ounces remained in line with year-end
2015. New Gold was able to partially offset approximately 0.5
million ounces of depletion from 2016 mining activity through the
addition of 0.1 million ounces of reserve conversion at our Peak
Mines and 0.1 million ounces from Rainy
River as a result of updates to the open pit and underground
mine plans. At Mesquite, gold mineral reserves decreased relative
to the end of 2015 due to a combination of 2016 mine depletion and
an updated mineral resource estimate that incorporates lowered
metallurgical recoveries for non-oxide transitional material in the
life-of-mine plan. New Gold's consolidated 2016 year-end copper
mineral reserves of 1.1 billion pounds decreased slightly due to
depletion from mining activities in 2016.
The change in consolidated Measured and Indicated gold
resources, exclusive of reserves, was primarily attributable to an
updated open pit and underground mine plan at Rainy River, conversion of mineral resources
to reserves at the Peak Mines and the exclusion of the Capoose
resource, located approximately 25 kilometres west of the
Blackwater deposit, from the current mineral resource statement.
The Peak Mines base metal inferred resource increased significantly
with the addition of approximately 100 million pounds of copper
from Great Cobar/Anjea and approximately 400 million pounds of
combined lead-zinc primarily from the recently discovered Chronos
zone.
2017 EXPLORATION PLANS
New Gold's 2017 exploration plans will be focused on three
assets, the Peak Mines, New Afton and Rainy River. Targeted exploration spending
totals $17 million, of which
$16 million is expected to be
expensed. New Gold's consolidated 2017 guidance for all-in
sustaining costs includes this $16
million, or approximately $40
per ounce, of the total $17 million
of planned exploration spending.
Consistent with prior years, the objective at the Peak Mines in
2017 is to further extend the mine's history of mineral reserve and
resource replacement, with a particular focus on gold-dominant
targets identified in the Southern Mine Corridor (Peak,
Perseverance and Chronos), and to a lesser extent, on copper
dominant targets in the Northern Mine Corridor (Chesney, New Cobar
and Great Cobar). At New Afton, the 2017 program is scheduled to be
split between underground infill drilling to upgrade the lower
portion of the C-zone to a measured confidence level and
reconnaissance drilling on positive 2016 results and other emerging
prospects. At Rainy River, the
2017 program is focused within a five-kilometre radius of the mine
development area and is scheduled to include surface drilling and
target generation. New Gold has also allocated $2 million towards the Fifield project in
New South Wales, Australia, where
the company has the opportunity to earn a 70%
interest.
2017 GUIDANCE
Going forward, New Gold's asset by asset cost guidance will
include operating expense per gold ounce, operating expense per
copper pound and all-in sustaining costs. Operating expense per
ounce and pound apportions the company's operating expense, as
shown on New Gold's consolidated income statement, to each metal on
a percentage of revenue basis. New Gold will continue to provide
total cash cost guidance on a consolidated basis, but not at the
asset level.
|
|
|
|
|
|
|
Gold
Production
|
Copper
Production
|
Operating
Expense
|
Operating
Expense
|
All-in Sustaining
Costs
|
|
(thousand
ounces)
|
(million
pounds)
|
($ per gold
ounce)
|
($ per copper
pound)
|
($ per gold
ounce)
|
|
|
|
|
|
|
Rainy
River(1)
|
50 - 60
|
--
|
$905 -
$945
|
--
|
$1,200 -
$1,240
|
New Afton
|
70 - 80
|
85 - 95
|
$405 -
$445
|
$0.80 -
$1.00
|
($280) -
($240)
|
Mesquite
|
140 - 150
|
--
|
$675 -
$715
|
--
|
$805 -
$845
|
Peak Mines
|
85 -
95
|
~15
|
$780 -
$820
|
$1.55 -
$1.75
|
$1,060 -
$1,100
|
Cerro San
Pedro
|
35 -
45
|
--
|
$1,080 -
$1,120
|
--
|
$1,090 -
$1,130
|
New Gold
Consolidated
|
380 -
430
|
100 -
110
|
$630 -
$670
|
$1.25 -
$1.45
|
$825 -
$865
|
Note: Estimated
consolidated silver production in 2017 approximately 1.1 million
ounces.
|
(1) Rainy River gold
production guidance includes pre-commercial production of
approximately 15,000 ounces. Rainy River operating
expense per gold ounce and
all-in sustaining costs calculated based on commercial production
ounces.
|
New Gold's 2017 consolidated gold production is expected to
increase relative to the prior year due to the planned September
start-up of Rainy River.
Consolidated gold production from New Afton, Mesquite and the Peak
Mines should remain in line with 2016 production levels, however,
production at Cerro San Pedro is scheduled to decrease as the mine
enters its first full year of residual leaching. Copper production
is expected to increase slightly at New Afton due to higher copper
grades, while copper production from the Peak Mines is expected to
be in line with 2016. Consolidated silver production is scheduled
to remain in line with the prior year at approximately 1.1 million
ounces.
Consistent with previous years, New Gold's 2017 full-year gold
production is not scheduled to be evenly distributed across the
four quarters. Quarterly consolidated gold production is expected
to build steadily throughout the year with the fourth quarter
benefitting from the start-up of Rainy
River.
New Gold's by-product pricing assumptions for 2017 are
$2.50 per copper pound and
$16.00 per silver ounce. The 2017
assumptions for the Canadian dollar, Australian dollar and Mexican
peso exchange rates are $1.30,
$1.35 and $20.00 to the U.S. dollar.
The company's 2017 operating expense will increase due to the
advancement of Rainy River into
production, however, operating expense per gold ounce and operating
expense per copper pound should both remain in line with 2016.
Consolidated total cash costs for the year are expected to
increase by approximately $65 per
ounce to $395 to $435 per ounce as a
result of higher gross operating costs attributable to the start-up
of Rainy River, partially offset
by higher by-product revenues. New Gold's 2017 all-in sustaining
costs are expected to increase by approximately $150 per ounce when compared to the $692 per ounce delivered in 2016. 2017 sustaining
costs, including sustaining capital, exploration, general and
administrative and amortization or reclamation expenditures, are
expected to increase by approximately $35
million relative to the prior year with the increase in
sustaining capital expenditures from the start-up of Rainy River, and increased underground
development costs at New Afton and Peak Mines, partially offset by
lower capital expenditures at Mesquite.
New Gold 2017 All-In Sustaining Costs Key
Sensitivities
Sensitivities to silver price and the Mexican peso are not shown
as the sensitivities are limited.
|
|
|
|
Category
|
Copper
Price
|
CDN/USD
|
AUD/USD
|
Base
Assumption
|
$2.50
|
$1.30
|
$1.35
|
Sensitivity
|
+/-$0.25
|
+/-$0.05
|
+/-$0.05
|
COST PER OUNCE
IMPACT
|
|
|
|
Rainy
River
|
--
|
+/-$45
|
--
|
New Afton
|
+/-$185
|
+/-$80
|
--
|
Mesquite
|
--
|
--
|
--
|
Peak Mines
|
+/-$40
|
--
|
+/-$50
|
New Gold
Total
|
+/-$45
|
+/-$20
|
+/-$10
|
WEBCAST AND CONFERENCE CALL
A webcast and conference call to discuss these results will be
held on Thursday, February 16, 2017
at 10:00 a.m. Eastern time.
Participants may join the webcast by registering on our website at
www.newgold.com. You may also listen to the conference call by
calling toll free 1-888-231-8191, or 1-647-427-7450 outside of the
U.S. and Canada. A recorded
playback of the conference call will be available until
March 15, 2017 by calling toll free
1-855-859-2056, or 1-416-849-0833 outside of the U.S. and
Canada, passcode 62154111. An
archived webcast will also be available until May 15, 2017 at www.newgold.com.
ABOUT NEW GOLD INC.
New Gold is an intermediate gold mining company. The company has
a portfolio of four producing assets and two significant
development projects. The New Afton Mine in Canada, the Mesquite Mine in the United States, the Peak Mines in
Australia and the Cerro San Pedro
Mine in Mexico (which transitioned
to residual leaching in 2016), provide the company with its current
production base. In addition, New Gold owns 100% of the Rainy River
and Blackwater projects located in Canada. New Gold's objective is to be the
leading intermediate gold producer, focused on the environment and
social responsibility. For further information on the company,
please visit www.newgold.com.
DETAILED MINERAL RESERVE AND RESOURCE TABLES
Mineral Reserves
Statement as at December 31, 2016
|
Proven &
Probable
|
|
Metal
grade
|
Contained
metal
|
|
Tonnes
000s
|
Gold
g/t
|
Silver
g/t
|
Copper
%
|
Gold
Koz
|
Silver
Koz
|
Copper
Mlbs
|
|
|
|
|
|
|
|
|
NEW
AFTON
|
|
|
|
|
|
|
|
A&B
Zones
|
|
|
|
|
|
|
|
Proven
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Probable
|
34,649
|
0.51
|
2.1
|
0.78
|
566
|
2,383
|
598
|
C
Zone
|
|
|
|
|
|
|
|
Proven
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Probable
|
25,687
|
0.72
|
1.8
|
0.77
|
594
|
1,492
|
435
|
Total New Afton
P&P
|
60,336
|
0.60
|
2.0
|
0.78
|
1,161
|
3,874
|
1,033
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MESQUITE
|
|
|
|
|
|
|
|
Proven
|
7,882
|
0.49
|
-
|
-
|
123
|
-
|
-
|
Probable
|
63,479
|
0.52
|
-
|
-
|
1,056
|
-
|
-
|
Total Mesquite
P&P
|
71,361
|
0.51
|
-
|
-
|
1,179
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PEAK
MINES
|
|
|
|
|
|
|
|
Southern Mine
Corridor
|
|
|
|
|
|
|
|
Proven
|
514
|
6.78
|
15.7
|
0.75
|
112
|
259
|
8
|
Probable
|
492
|
5.45
|
13.6
|
0.60
|
86
|
215
|
7
|
Southern Mine
Corridor P&P
|
1,006
|
6.13
|
14.7
|
0.68
|
198
|
475
|
15
|
Northern Mine
Corridor
|
|
|
|
|
|
|
|
Proven
|
787
|
0.94
|
7.0
|
1.81
|
24
|
176
|
31
|
Probable
|
902
|
0.85
|
6.4
|
1.64
|
25
|
185
|
33
|
Northern Mine
Corridor P&P
|
1,689
|
0.89
|
6.6
|
1.72
|
48
|
361
|
64
|
Stockpile
|
|
|
|
|
|
|
|
Proven
|
66
|
1.92
|
8.5
|
0.86
|
4
|
18
|
1
|
|
|
|
|
|
|
|
|
Combined
P&P
|
|
|
|
|
|
|
|
Proven
|
1,370
|
3.18
|
10.3
|
1.36
|
140
|
453
|
41
|
Probable
|
1,390
|
2.48
|
9.0
|
1.28
|
111
|
401
|
39
|
Total Peak Mines
P&P
|
2,760
|
2.83
|
9.6
|
1.32
|
251
|
854
|
80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RAINY
RIVER
|
|
|
|
|
|
|
|
Direct
processing material
|
|
|
|
|
|
|
|
Open
Pit
|
|
|
|
|
|
|
|
Proven
|
16,944
|
1.41
|
2.5
|
-
|
771
|
1,353
|
-
|
Probable
|
45,001
|
1.19
|
3.2
|
-
|
1,728
|
4,692
|
-
|
Open Pit P&P
(direct processing)
|
61,946
|
1.25
|
3.0
|
-
|
2,499
|
6,045
|
-
|
Underground
|
|
|
|
|
|
|
|
Proven
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Probable
|
5,411
|
5.34
|
11.2
|
-
|
929
|
1,956
|
-
|
Underground P&P
(direct processing)
|
5,411
|
5.34
|
11.2
|
-
|
929
|
1,956
|
-
|
Stockpile
material
|
|
|
|
|
|
|
|
Open
Pit
|
|
|
|
|
|
|
|
Proven
|
9,322
|
0.45
|
1.5
|
-
|
135
|
462
|
-
|
Probable
|
27,081
|
0.44
|
1.8
|
-
|
380
|
1,540
|
-
|
Open Pit P&P
(stockpile)
|
36,403
|
0.44
|
1.7
|
-
|
516
|
2,002
|
-
|
|
|
|
|
|
|
|
|
Combined
P&P
|
|
|
|
|
|
|
|
Proven
|
26,266
|
1.07
|
2.1
|
-
|
906
|
1,815
|
-
|
Probable
|
77,493
|
1.22
|
3.3
|
-
|
3,037
|
8,188
|
-
|
Total Rainy River
P&P
|
103,760
|
1.18
|
3.0
|
-
|
3,943
|
10,003
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BLACKWATER
|
|
|
|
|
|
|
|
Direct
processing material
|
|
|
|
|
|
|
|
Proven
|
124,500
|
0.95
|
5.5
|
-
|
3,790
|
22,100
|
-
|
Probable
|
169,700
|
0.68
|
4.1
|
-
|
3,730
|
22,300
|
-
|
P&P (direct
processing)
|
294,200
|
0.79
|
4.7
|
-
|
7,520
|
44,400
|
-
|
Stockpile
material
|
|
|
|
|
|
|
|
Proven
|
20,100
|
0.50
|
3.6
|
-
|
325
|
2,300
|
-
|
Probable
|
30,100
|
0.34
|
14.6
|
-
|
325
|
14,100
|
-
|
P&P
(stockpile)
|
50,200
|
0.40
|
10.2
|
-
|
650
|
16,400
|
-
|
Total Blackwater
P&P
|
344,400
|
0.74
|
5.5
|
-
|
8,170
|
60,800
|
-
|
|
|
|
|
|
|
|
|
Total
P&P
|
|
|
|
|
14,704
|
75,531
|
1,113
|
Mineral Resources
statement as at December 31, 2016
|
|
|
|
|
|
Measured &
Indicated (Exclusive of Reserves)
|
Metal
grade
|
Contained
metal
|
|
Tonnes
000s
|
Gold
g/t
|
Silver
g/t
|
Copper
%
|
Gold
Koz
|
Silver
Koz
|
Copper
Mlbs
|
|
|
|
|
|
|
|
|
NEW
AFTON
|
|
|
|
|
|
|
|
A&B
Zones
|
|
|
|
|
|
|
|
Measured
|
16,081
|
0.66
|
2.1
|
0.85
|
339
|
1,072
|
302
|
Indicated
|
10,904
|
0.46
|
2.2
|
0.67
|
161
|
784
|
160
|
A&B Zone
M&I
|
26,985
|
0.58
|
2.1
|
0.78
|
500
|
1,856
|
462
|
C-Zone
|
|
|
|
|
|
|
|
Measured
|
2,071
|
1.09
|
2.4
|
1.20
|
72
|
162
|
55
|
Indicated
|
16,744
|
0.76
|
2.2
|
0.90
|
410
|
1,156
|
330
|
C-Zone
M&I
|
18,815
|
0.80
|
2.2
|
0.93
|
483
|
1,318
|
385
|
HW
Lens
|
|
|
|
|
|
|
|
Measured
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Indicated
|
10,764
|
0.51
|
2.1
|
0.43
|
176
|
713
|
103
|
HW Lens
M&I
|
10,764
|
0.51
|
2.1
|
0.43
|
176
|
713
|
103
|
Total New Afton
M&I
|
56,592
|
0.64
|
2.1
|
0.76
|
1,158
|
3,887
|
950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MESQUITE
|
|
|
|
|
|
|
|
Measured
|
5,479
|
0.37
|
-
|
-
|
64
|
-
|
-
|
Indicated
|
65,002
|
0.47
|
-
|
-
|
976
|
-
|
-
|
Total Mesquite
M&I
|
70,481
|
0.46
|
-
|
-
|
1,040
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PEAK
MINES
|
|
|
|
|
|
|
|
Southern Mine
Corridor
|
|
|
|
|
|
|
|
Measured
|
666
|
5.53
|
8.2
|
0.70
|
118
|
174
|
9
|
Indicated
|
770
|
4.14
|
10.4
|
0.84
|
103
|
258
|
14
|
Southern Mine
Corridor M&I
|
1,436
|
4.79
|
9.4
|
0.77
|
216
|
429
|
25
|
Northern Mine
Corridor
|
|
|
|
|
|
|
|
Measured
|
804
|
2.32
|
5.0
|
1.00
|
60
|
129
|
18
|
Indicated
|
3,030
|
0.99
|
5.1
|
2.02
|
97
|
489
|
130
|
Northern Mine
Corridor M&I
|
3,840
|
1.28
|
5.1
|
1.80
|
158
|
619
|
147
|
|
|
|
|
|
|
|
|
Combined
M&I
|
|
|
|
|
|
|
|
Measured
|
1,470
|
3.78
|
6.4
|
0.87
|
178
|
303
|
27
|
Indicated
|
3,800
|
1.63
|
6.2
|
1.78
|
200
|
747
|
144
|
Total Peak Mines
M&I
|
5,270
|
2.23
|
6.2
|
1.52
|
378
|
1,050
|
171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RAINY
RIVER
|
|
|
|
|
|
|
|
Direct
processing material
|
|
|
|
|
|
|
|
Open
Pit
|
|
|
|
|
|
|
|
Measured
|
3,638
|
1.11
|
2.8
|
-
|
130
|
329
|
-
|
Indicated
|
28,976
|
1.16
|
3.7
|
-
|
1,079
|
3,485
|
-
|
Open Pit M&I
(direct processing)
|
32,614
|
1.15
|
3.6
|
-
|
1,209
|
3,814
|
-
|
Underground
|
|
|
|
|
|
|
|
Measured
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Indicated
|
5,035
|
3.71
|
10.4
|
-
|
601
|
1,678
|
-
|
Underground M&I
(direct processing)
|
5,035
|
3.71
|
10.4
|
-
|
601
|
1,678
|
-
|
Stockpile
material
|
|
|
|
|
|
|
|
Open
Pit
|
|
|
|
|
|
|
|
Measured
|
2,490
|
0.36
|
2.8
|
-
|
29
|
223
|
-
|
Indicated
|
34,984
|
0.43
|
2.4
|
-
|
483
|
2,694
|
-
|
Open Pit M&I
(stockpile)
|
37,474
|
0.42
|
2.4
|
-
|
512
|
2,917
|
-
|
|
|
|
|
|
|
|
|
Combined
M&I
|
|
|
|
|
|
|
|
Measured
|
6,128
|
0.81
|
2.8
|
-
|
159
|
552
|
-
|
Indicated
|
68,995
|
0.97
|
3.5
|
-
|
2,163
|
7,857
|
-
|
Total Rainy River
M&I
|
75,123
|
0.96
|
3.5
|
-
|
2,322
|
8,409
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BLACKWATER
|
|
|
|
|
|
|
|
Direct
processing material
|
|
|
|
|
|
|
|
Measured
|
289
|
1.39
|
6.6
|
-
|
13
|
61
|
-
|
Indicated
|
42,444
|
0.85
|
4.6
|
-
|
1,160
|
6,277
|
-
|
M&I (direct
processing)
|
42,733
|
0.85
|
4.6
|
-
|
1,173
|
6,339
|
-
|
Stockpile
material
|
|
|
|
|
|
|
|
Measured
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Indicated
|
14,602
|
0.32
|
3.9
|
-
|
150
|
1,831
|
-
|
M&I
(stockpile)
|
14,602
|
0.32
|
3.9
|
-
|
150
|
1,831
|
-
|
Total Blackwater
M&I
|
57,335
|
0.72
|
4.4
|
-
|
1,323
|
8,169
|
-
|
|
|
|
|
|
|
|
|
Total M&I
Exclusive of Reserves
|
|
|
|
|
6,222
|
21,515
|
1,121
|
Mineral Resources
statement as at December 31, 2016
|
Inferred
|
|
Metal
grade
|
Contained
metal
|
|
Tonnes
000s
|
Gold
g/t
|
Silver
g/t
|
Copper
%
|
Gold
Koz
|
Silver
Koz
|
Copper
Mlbs
|
|
|
|
|
|
|
|
|
NEW
AFTON
|
|
|
|
|
|
|
|
A&B-Zone
|
7,344
|
0.35
|
1.3
|
0.35
|
83
|
304
|
57
|
C-Zone
|
6,900
|
0.43
|
1.3
|
0.46
|
96
|
295
|
70
|
HW Lens
|
978
|
0.69
|
1.4
|
0.46
|
22
|
45
|
10
|
New Afton
Inferred
|
15,219
|
0.41
|
1.3
|
0.41
|
200
|
644
|
137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MESQUITE
|
7,118
|
0.32
|
-
|
-
|
74
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PEAK
MINES
|
|
|
|
|
|
|
|
Southern Mine
Corridor
|
440
|
3.66
|
9.6
|
0.63
|
52
|
133
|
6
|
Northern Mine
Corridor
|
3,540
|
1.11
|
6.0
|
1.94
|
126
|
679
|
148
|
Peak
Inferred
|
3,980
|
1.39
|
6.4
|
1.80
|
178
|
812
|
154
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RAINY
RIVER
|
|
|
|
|
|
|
|
Direct
processing
|
|
|
|
|
|
|
|
Open Pit
|
5,808
|
1.01
|
2.8
|
-
|
188
|
528
|
-
|
Underground
|
5,130
|
3.53
|
2.8
|
-
|
583
|
467
|
-
|
Total Direct
Processing
|
10,938
|
2.19
|
2.8
|
-
|
771
|
995
|
-
|
Stockpile
|
|
|
|
|
|
|
|
Open Pit
|
8,916
|
0.40
|
1.5
|
-
|
114
|
435
|
-
|
Rainy River
Inferred
|
19,854
|
1.39
|
2.2
|
-
|
885
|
1,430
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BLACKWATER
|
|
|
|
|
|
|
|
Direct
processing
|
10,908
|
0.80
|
3.8
|
-
|
279
|
1,333
|
-
|
Stockpile
|
2,660
|
0.33
|
3.2
|
-
|
28
|
274
|
-
|
Blackwater
Inferred
|
13,568
|
0.70
|
3.7
|
-
|
307
|
1,606
|
-
|
|
|
|
|
|
|
|
|
Total
Inferred
|
|
|
|
|
1,644
|
4,492
|
291
|
In addition to the Peak Mines inferred resource stated above,
the below table summarizes additional inferred resources contained
in satellite lead-zinc lenses at the Chronos, Peak and Great Cobar
deposits.
Mineral Resources
statement as at December 31, 2016
|
|
|
|
|
|
|
|
|
|
Inferred
|
|
Metal
grade
|
Contained
metal
|
|
Tonnes
000s
|
Gold
g/t
|
Silver
g/t
|
Copper
%
|
Lead
%
|
Zinc
%
|
Gold
Koz
|
Silver
Koz
|
Copper
Mlbs
|
Lead
Mlbs
|
Zinc
Mlbs
|
|
|
|
|
|
|
|
|
|
|
|
|
PEAK
MINES
|
|
|
|
|
|
|
|
|
|
|
|
Southern Mine
Corridor
|
1,410
|
0.73
|
35.3
|
0.34
|
5.93
|
6.23
|
33
|
1,640
|
11
|
194
|
181
|
Northern Mine
Corridor
|
100
|
0.19
|
24.7
|
0.28
|
3.56
|
9.11
|
1
|
80
|
1
|
20
|
8
|
Total Pb-Zn Inferred
|
1,510
|
0.69
|
34.6
|
0.34
|
5.78
|
6.42
|
34
|
1,720
|
11
|
214
|
189
|
Notes to Mineral Reserve and Resource Estimates
1. New Gold's Mineral Reserves and Resources have
been estimated in accordance with the CIM Standards, which are
incorporated by reference in NI 43-101.
2. All Mineral Resource and Mineral Reserve estimates
for New Gold's properties and projects are effective December 31, 2016.
3. New Gold's year-end 2016 Mineral Reserves and
Mineral Resources have been estimated based on the following metal
prices and foreign exchange rate criteria:
|
|
|
|
|
|
|
|
|
|
Gold
$/ounce
|
Silver
$/ounce
|
Copper
$/pound
|
Lead
$/pound
|
Zinc
$/pound
|
CAD
|
AUD
|
MXN
|
Mineral
Reserves
|
$1,250
|
$15.00
|
$2.75
|
N/A
|
N/A
|
1.25
|
1.30
|
17.00
|
Mineral
Resources
|
$1,350
|
$17.00
|
$3.00
|
$0.85
|
$1.00
|
1.25
|
1.30
|
17.00
|
4. Lower cut-offs for the Company's Mineral Reserves
and Mineral Resources are outlined in the following table:
|
|
|
Mineral
Property
|
Mineral
Reserves
LOWER
cut-off
|
Mineral
Resources
LOWER
Cut-off
|
New Afton
|
Main Zone – B1 &
B2 Blocks:
|
C$17.00/t
|
All Resources:
0.40% CuEq
|
|
B3 Block &
C-Zone:
|
C$24.00/t
|
Mesquite
|
Oxide &
Transitional:
|
0.16 g/t Au (0.005
oz/t Au)
|
0.12 g/t Au (0.0035
oz/t Au)
|
|
Sulphide:
|
0.41 g/t Au (0.012
oz/t Au)
|
0.24 g/t Au (0.007
oz/t Au)
|
Peak Mines
|
All ore
types:
|
A$80/t to
A$146/t
|
A$113/t to
A$150/t
|
Cerro San
Pedro
|
All ore
types:
|
US$ 6.00/t
|
NA
|
Rainy
River
|
O/P direct
processing:
|
0.30 – 0.60 g/t
AuEq
|
0.30 – 0.45 g/t
AuEq
|
|
O/P
stockpile:
|
0.30 g/t
AuEq
|
0.30 g/t
AuEq
|
|
U/G direct
processing:
|
3.50 g/t
AuEg
|
2.50 g/t
AuEq
|
Blackwater
|
O/P direct
processing:
|
0.26 – 0.38 g/t
AuEq
|
All Resources:
0.40 g/t AuEq
|
|
O/P
stockpile:
|
0.32 g/t
AuEq
|
5. New Gold reports its Measured and Indicated
Mineral Resources exclusive of Mineral Reserves. Measured and
Indicated Mineral Resources that are not Mineral Reserves do not
have demonstrated economic viability. Inferred Mineral Resources
have a greater amount of uncertainty as to their existence,
economic and legal feasibility, do not have demonstrated economic
viability, and are likewise exclusive of Mineral Reserves.
Numbers may not add due to rounding.
6. Mineral Resources are classified as Measured,
Indicated and Inferred based on relative levels of confidence in
their estimation and on technical and economic parameters
consistent with the methods most suitable to their potential
commercial exploitation. Where different mining and/or processing
methods might be applied to different portions of a Mineral
Resource, the designators 'open pit' and 'underground' are used to
indicate the envisioned mining method. The designators 'oxide',
'non-oxide' and 'sulphide' have likewise been applied to indicate
the type of mineralization as it relates to the appropriate mineral
processing method and expected payable metal recoveries, and the
designators 'direct processing' and 'stockpile' have been applied
to differentiate material envisioned to be mined and processed
directly from material to be mined and stored in a stockpile for
future processing. Mineral Reserves and Mineral Resources may be
materially affected by environmental, permitting, legal, title,
taxation, sociopolitical, marketing and other risks and relevant
issues. Additional details regarding Mineral Reserve and Mineral
Resource estimation, classification, reporting parameters, key
assumptions and associated risks for each of New Gold's material
properties are provided in the respective NI 43-101 Technical
Reports, which are available at www.sedar.com.
7. Rainy River Project: In addition to the criteria
described above, Mineral Reserves and Mineral Resources for the
Rainy River project are reported according to the following
additional criteria: Underground Mineral Reserves are reported
peripheral to and/or below the open pit Mineral Reserve pit shell,
which has been designed and optimized based on an $800/oz gold price. Underground Mineral Resources
are reported below a larger Mineral Resource pit shell, which has
been defined based on a $1,350/oz
gold price. Approximately forty percent (40%) of the gold
metal content defined as underground Mineral Reserves is derived
from material located between the Mineral Reserve pit shell and the
Mineral Resource pit shell; the remaining sixty percent (60%) of
the metal content defined as underground Mineral Reserves is
derived from material located below the Mineral Resource pit
shell. Open pit Mineral Resources exclude material reported
as underground Mineral Reserves.
8. Qualified Person: The preparation of New Gold's
Mineral Reserve and Mineral Resource estimates has been done by
Qualified Persons as defined under NI 43-101, under the oversight
and review of Mr. Mark A. Petersen,
a Qualified Person under NI 43-101.
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
the statements made under "2017 Guidance" and "Projects Update -
Rainy River - 2017 Production and
Cost Guidance", as well as other statements elsewhere in this news
release, including, among others, statements with respect to:
guidance for production, operating expense, total cash costs and
all-in sustaining costs, and the factors contributing to those
expected results, as well as expected capital and other
expenditures; planned development activities for 2017 at the Rainy
River project, including the completion and commissioning of the
processing facilities; planned preparations for operations at the
Rainy River project, including the mining rate, removal of
overburden and waste, and storage of water, and stock piling of ore
prior to first production ; the expected production, costs,
economics, grade and other operating parameters of the Rainy River
project; the capacity of the starter dam; the expected production,
costs, economics and operating parameters of the Rainy River
project; the capacity of the starter dam; targeted timing for
permits, including the amendment to Schedule 2 of the Metal Mining
Effluent Regulations; targeted timing for commissioning, start-up,
production and commercial production; and targeting timing for
development and other activities related to the Rainy River
project.
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 annual and quarterly management's discussion and analysis
("MD&A"), its Annual Information Form and its Technical Reports
filed at www.sedar.com. 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, Australian dollar, Mexican peso and U.S. dollar 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
project being consistent with New Gold's current expectations; (8)
all required permits, licenses and authorizations, including the
amendment to Schedule 2 of the Metal Mining Effluent Regulations,
being obtained from the relevant governments and other relevant
stakeholders within the expected timelines; (9) the results of the
feasibility study for the Rainy River project being realized; and
(10) in the case of production, cost and expenditure outlooks
at the operating mines and the Rainy River project for 2017,
commodity prices and exchange rates being consistent with those
estimated for the purposes for 2017.
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, Australia and Mexico; discrepancies between actual and
estimated production, between actual and estimated mineral reserves
and mineral resources and between actual and estimated
metallurgical recoveries; fluctuation in treatment and refining
charges; changes in national and local government legislation in
Canada, the United States, Australia and 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, including, but not limited to: in
Canada, obtaining the necessary
permits for the Rainy River project; and in Mexico, where Cerro San Pedro has a history of
ongoing legal challenges related to our environmental
authorization; 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; inherent uncertainties with cost estimates and
estimated schedule for the construction and commencement of
production at Rainy River as
contemplated; 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 including the feasibility studies for the Rainy
River project; 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, including those associated with the
amendment to Schedule 2 of the Metal Mining Effluent Regulations
for the Rainy River project. 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 disclosure documents
filed on and available at www.sedar.com. 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.
CAUTIONARY NOTE TO U.S. READERS CONCERNING ESTIMATES OF
MINERAL RESERVES AND MINERAL RESOURCES
Information concerning the properties and operations of New Gold
has been prepared in accordance with Canadian standards under
applicable Canadian securities laws, and may not be comparable to
similar information for United
States companies. The terms "Mineral Resource", "Measured
Mineral Resource", "Indicated Mineral Resource" and "Inferred
Mineral Resource" used in this presentation are Canadian mining
terms as defined in the Canadian Institute of Mining, Metallurgy
and Petroleum ("CIM") Definition Standards for Mineral Resources
and Mineral Reserves adopted by CIM Council on May 10, 2014 and incorporated by reference in
National Instrument 43-101. While the terms "Mineral
Resource", "Measured Mineral Resource", "Indicated Mineral
Resource" and "Inferred Mineral Resource" are recognized and
required by Canadian securities regulations, they are not defined
terms under standards of the United States Securities and Exchange
Commission. As such, certain information contained in this
presentation concerning descriptions of mineralization and mineral
resources under Canadian standards is not comparable to similar
information made public by United
States companies subject to the reporting and disclosure
requirements of the United States Securities and Exchange
Commission.
An "Inferred Mineral Resource" has a great amount of uncertainty
as to its existence and as to its economic and legal
feasibility. Under Canadian rules, estimates of inferred
mineral resources may not form the basis of feasibility or
pre-feasibility studies. It cannot be assumed that all or any
part of an "Inferred Mineral Resource" will ever be upgraded to a
higher confidence category. Readers are cautioned not
to assume that all or any part of an "Inferred Mineral Resource"
exists or is economically or legally mineable.
Under United States standards,
mineralization may not be classified as a "Reserve" unless the
determination has been made that the mineralization could be
economically and legally produced or extracted at the time the
reserve estimation is made. Readers are cautioned not to
assume that all or any part of the measured or indicated mineral
resources will ever be converted into mineral reserves. In
addition, the definitions of "Proven Mineral Reserves" and
"Probable Mineral Reserves" under CIM standards differ in certain
respects from the standards of the United States Securities and
Exchange Commission.
TECHNICAL INFORMATION
The scientific and technical information contained herein has
been reviewed and approved by Mark A.
Petersen, Vice President, Exploration of New Gold, except
for the scientific and technical information regarding capital
costs at Rainy River set out under
the heading "Projects Update - Rainy
River - Capital Expenditures", which has been reviewed and
approved by Arshya Qureshi,
Co-Founder and Project Manager at LQ Consulting and
Management Inc. Mr. Qureshi is a Professional Engineer registered
with Professional Engineers of Ontario. Mr. Petersen is a SME Registered
Member, AIPG Certified Professional Geologist. Mr. Petersen and Mr.
Qureshi are "Qualified Persons" for the purposes of NI 43-101.
For additional technical information on New Gold's material
properties, including a detailed breakdown of Mineral Reserves and
Mineral Resources by category, as well as key assumptions,
parameters and risks, refer to New Gold's Annual Information Form
for the year ended December 31, 2015
filed on www.sedar.com.
NON-GAAP MEASURES
(1) ALL-IN SUSTAINING COSTS
"All-in sustaining costs" per 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 of which New Gold is a member, 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 and environmental
reclamation costs, all divided by the ounces of gold sold to arrive
at a per ounce figure. 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.
Further details regarding historical all-in sustaining costs and a
reconciliation to the nearest IFRS measures are provided in the
MD&A accompanying New Gold's financial statements filed from
time to time on www.sedar.com.
"Sustaining costs" is a non-GAAP financial measure. New Gold
defines sustaining costs as the difference between all-in
sustaining costs and total cash costs, being the sum of net capital
expenditures that are sustaining in nature, corporate general and
administrative costs, capitalized and expensed exploration that is
sustaining in nature, and environmental reclamation costs.
Management uses sustaining costs to understand the aggregate net
result of the drivers of all-in sustaining costs other than total
cash costs. The line items between cash costs and all in
sustaining costs in the tables below break down the components of
sustaining costs. Sustaining costs 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.
(2) TOTAL CASH COSTS
"Total cash costs" per ounce is a non-GAAP financial measure which
is 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,
and realized gains and losses on fuel contracts, but are exclusive
of amortization, reclamation, capital and exploration costs and net
of by-product sales. Total cash costs are then divided by ounces of
gold sold to arrive at a per ounce figure. Co-product cash costs
remove the impact of other metal sales that are produced as a
by-product of gold production and apportion the cash costs to each
metal produced on a percentage of revenue basis, and subsequently
divides the amount by the total ounces of gold or silver or pounds
of copper sold, as the case may be, to arrive at per ounce or per
pound figures. Unless otherwise indicated, all total cash cost
information in this news release is net of by-product sales. This
data is furnished to provide additional information and is a
non-GAAP financial measure. Total cash costs and co-product 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. Further details
regarding historical total cash costs and a reconciliation to the
nearest IFRS measures are provided in the MD&A accompanying New
Gold's financial statements filed from time to time on
www.sedar.com.
|
Three months ended
December 31, 2016
|
(in millions of
U.S. dollars, except where noted)
|
Gold
|
Copper
|
Silver
|
Total
|
OPEX, CASH COST AND
AISC RECONCILIATION
|
|
|
|
|
Operating
expenses(1)
|
73.2
|
38.8
|
3.0
|
114.7
|
Units of metal sold
(ounces/millions of pounds/millions of ounces)
|
93,936
|
24.6
|
0.3
|
|
Operating expenses
per unit of metal sold ($/ounce or pound)
|
780
|
1.58
|
10.82
|
|
Operating
expenses(1)
|
73.2
|
38.8
|
3.0
|
114.7
|
Treatment and
refining charges on concentrate sales
|
3.3
|
5.7
|
0.2
|
9.2
|
Adjustments(2)
|
(15.7)
|
(8.3)
|
(0.6)
|
(24.6)
|
Total cash
costs
|
60.5
|
36.2
|
2.6
|
99.3
|
By-product silver and
copper sales
|
|
|
|
(65.7)
|
Total cash costs net
of by-product revenue
|
|
|
|
33.6
|
Units of metal sold
(ounces/millions of pounds/millions of ounces)
|
93,936
|
24.6
|
0.3
|
93,936
|
Total cash costs on a
co-product basis(3) ($/ounce or pound)
|
647
|
1.47
|
9.11
|
|
Total cash costs per
gold ounce sold ($/ounce)
|
|
|
|
360
|
Total co-product cash
costs
|
60.5
|
36.2
|
2.6
|
|
Total cash costs net
of by-product revenue
|
|
|
|
33.6
|
Sustaining capital
expenditures
|
9.8
|
5.1
|
0.4
|
15.3
|
Sustaining
exploration - expensed
|
0.6
|
0.3
|
-
|
0.9
|
Corporate G&A
including share-based compensation(4)
|
4.3
|
2.3
|
0.2
|
6.8
|
Reclamation
expenses
|
0.8
|
0.4
|
-
|
1.2
|
Total co-product
all-in sustaining costs
|
76.0
|
44.3
|
3.2
|
|
Total all-in
sustaining costs net of by-product revenue
|
|
|
|
57.8
|
All-in sustaining
costs on a co-product basis(3) ($/ounce or
pound)
|
812
|
1.80
|
11.40
|
|
All-in sustaining
costs per gold ounce sold ($/ounce)
|
|
|
|
619
|
1.
|
Operating expenses
("Opex") are apportioned to each metal produced on a percentage of
revenue basis.
|
2.
|
Adjustments
include non-cash items related to inventory write-downs, the
amortization of Mesquite's Purchase Price Allocation ("PPA")
associated with royalties and social closure costs incurred at
Cerro San Pedro that are included in operating
expenses.
|
3.
|
Amounts presented
on a co-product basis remove the impact of other metal sales that
are produced as a by-product of our gold production and apportions
the cash costs to each metal produced on a percentage of revenue
basis.
|
4.
|
Includes the sum
of corporate administration costs and share-based payment expense
per the income statement, net of any non-cash depreciation within
those figures.
|
|
Year ended December
31, 2016
|
(in millions of
U.S. dollars, except where noted)
|
Gold
|
Copper
|
Silver
|
Total
|
OPEX, CASH COST AND
AISC RECONCILIATION
|
|
|
|
|
Operating
expenses(1)
|
242.3
|
112.6
|
10.9
|
365.8
|
Units of metal sold
(ounces/millions of pounds/millions of ounces)
|
378,239
|
99.2
|
1.3
|
|
Operating expenses
per unit of metal sold ($/ounce or pound)
|
640
|
1.14
|
8.75
|
|
Operating
expenses(1)
|
242.3
|
112.6
|
10.9
|
365.8
|
Treatment and
refining charges on concentrate sales
|
13.7
|
19.4
|
0.6
|
33.7
|
Adjustments(2)
|
(16.1)
|
(7.5)
|
(0.7)
|
(24.3)
|
Total cash
costs
|
239.9
|
124.5
|
10.8
|
375.2
|
By-product silver and
copper sales
|
|
|
|
(242.9)
|
Total cash costs net
of by-product revenue
|
|
|
|
132.3
|
Units of metal sold
(ounces/millions of pounds/millions of ounces)
|
378,239
|
99.2
|
1.3
|
378,239
|
Total cash costs on a
co-product basis(3) ($/ounce or pound)
|
634
|
1.26
|
8.64
|
|
Total cash costs per
gold ounce sold ($/ounce)
|
|
|
|
349
|
Total co-product cash
costs
|
239.9
|
124.5
|
10.8
|
|
Total cash costs net
of by-product revenue
|
|
|
|
132.3
|
Sustaining capital
expenditures
|
56.9
|
26.5
|
2.6
|
86.0
|
Sustaining
exploration - expensed
|
5.3
|
2.5
|
0.2
|
8.0
|
Corporate G&A
including share-based compensation(4)
|
20.3
|
9.5
|
0.9
|
30.7
|
Reclamation
expenses
|
3.3
|
1.5
|
0.1
|
4.9
|
Total co-product
all-in sustaining costs
|
325.7
|
164.5
|
14.6
|
|
Total all-in
sustaining costs net of by-product revenue
|
|
|
|
261.9
|
All-in sustaining
costs on a co-product basis(3) ($/ounce or
pound)
|
861
|
1.66
|
11.74
|
|
All-in sustaining
costs per gold ounce sold ($/ounce)
|
|
|
|
692
|
1.
|
Operating expenses
are apportioned to each metal produced on a percentage of revenue
basis.
|
2.
|
Adjustments
include non-cash items related to inventory write-downs, the
amortization of Mesquite's Purchase Price Allocation ("PPA")
associated with royalties and social closure costs incurred at
Cerro San Pedro that are included in operating
expenses.
|
3.
|
Amounts presented
on a co-product basis remove the impact of other metal sales that
are produced as a by-product of our gold production and apportions
the cash costs to each metal produced on a percentage of revenue
basis.
|
4.
|
Includes the sum
of corporate administration costs and share-based payment expense
per the income statement, net of any non-cash depreciation within
those figures.
|
|
Three months ended
December 31, 2015
|
(in millions of
U.S. dollars, except where noted)
|
Gold
|
Copper
|
Silver
|
Total
|
OPEX, CASH COST AND
AISC RECONCILIATION
|
|
|
|
|
Operating
expenses(1)
|
81.6
|
30.9
|
3.9
|
116.4
|
Units of metal sold
(ounces/millions of pounds/millions of ounces)
|
133,005
|
25.5
|
0.5
|
|
Operating expenses
per unit of metal sold ($/ounce or pound)
|
614
|
1.21
|
8.10
|
|
Operating
expenses(1)
|
81.6
|
30.9
|
3.9
|
116.4
|
Treatment and
refining charges on concentrate sales
|
3.6
|
5.1
|
0.2
|
8.9
|
Adjustments(2)
|
(7.8)
|
(2.9)
|
(0.4)
|
(11.1)
|
Total cash
costs
|
77.4
|
33.1
|
3.7
|
114.2
|
By-product silver and
copper sales
|
|
|
|
(62.4)
|
Total cash costs net
of by-product revenue
|
|
|
|
51.8
|
Units of metal sold
(ounces/millions of pounds/millions of ounces)
|
133,005
|
25.5
|
0.5
|
133,005
|
Total cash costs on a
co-product basis(3) ($/ounce or pound)
|
580
|
1.30
|
7.65
|
|
Total cash costs per
gold ounce sold ($/ounce)
|
|
|
|
389
|
Total co-product cash
costs
|
77.4
|
33.1
|
3.7
|
|
Total cash costs net
of by-product revenue
|
|
|
|
51.8
|
Sustaining capital
expenditures
|
15.0
|
5.7
|
0.7
|
21.4
|
Sustaining
exploration - expensed
|
0.9
|
0.4
|
-
|
1.3
|
Corporate G&A
including share-based compensation(4)
|
3.5
|
1.5
|
0.2
|
5.2
|
Reclamation
expenses
|
1.4
|
0.4
|
-
|
1.8
|
Total co-product
all-in sustaining costs
|
98.2
|
41.1
|
4.6
|
|
Total all-in
sustaining costs net of by-product revenue
|
|
|
|
81.5
|
All-in sustaining
costs on a co-product basis(3) ($/ounce or
pound)
|
737
|
1.61
|
9.72
|
|
All-in sustaining
costs per gold ounce sold ($/ounce)
|
|
|
|
613
|
1.
|
Operating expenses
are apportioned to each metal produced on a percentage of revenue
basis.
|
2.
|
Adjustments
include non-cash items related to inventory write-downs, the
amortization of Mesquite's Purchase Price Allocation ("PPA")
associated with royalties and social closure costs incurred at
Cerro San Pedro that are included in operating
expenses.
|
3.
|
Amounts presented
on a co-product basis remove the impact of other metal sales that
are produced as a by-product of our gold production and apportions
the cash costs to each metal produced on a percentage of revenue
basis.
|
4.
|
Includes the sum
of corporate administration costs and share-based payment expense
per the income statement, net of any non-cash depreciation within
those figures.
|
|
Year ended December
31, 2015
|
(in millions of
U.S. dollars, except where noted)
|
Gold
|
Copper
|
Silver
|
Total
|
OPEX, CASH COST AND
AISC RECONCILIATION
|
|
|
|
|
Operating
expenses(1)
|
277.4
|
126.6
|
15.6
|
419.6
|
Units of metal sold
(ounces/millions of pounds/millions of ounces)
|
428,852
|
92.9
|
1.8
|
|
Operating expenses
per unit of metal sold ($/ounce or pound)
|
647
|
1.36
|
8.66
|
|
Operating
expenses(1)
|
277.4
|
126.6
|
15.6
|
419.6
|
Treatment and
refining charges on concentrate sales
|
12.4
|
20.0
|
0.5
|
32.9
|
Adjustments(2)
|
(6.0)
|
(3.0)
|
(0.4)
|
(9.4)
|
Total cash
costs
|
283.8
|
143.6
|
15.7
|
443.1
|
By-product silver and
copper sales
|
|
|
|
(253.0)
|
Total cash costs net
of by-product revenue
|
|
|
|
190.1
|
Units of metal sold
(ounces/millions of pounds/millions of ounces)
|
428,852
|
92.9
|
1.8
|
428,852
|
Total cash costs on a
co-product basis(3) ($/ounce or pound)
|
661
|
1.54
|
8.70
|
|
Total cash costs per
gold ounce sold ($/ounce)
|
|
|
|
443
|
Total co-product cash
costs
|
283.8
|
143.6
|
15.7
|
|
Total cash costs net
of by-product revenue
|
|
|
|
190.1
|
Sustaining capital
expenditures(4)
|
80.4
|
36.6
|
4.5
|
121.5
|
Sustaining
exploration - expensed
|
2.7
|
1.2
|
0.1
|
4.0
|
Corporate G&A
including share-based compensation(5)
|
17.6
|
8.1
|
1.0
|
26.7
|
Reclamation
expenses
|
3.0
|
1.4
|
0.2
|
4.6
|
Total co-product
all-in sustaining costs
|
387.5
|
190.9
|
21.5
|
|
Total all-in
sustaining costs net of by-product revenue
|
|
|
|
346.9
|
All-in sustaining
costs on a co-product basis(3) ($/ounce or
pound)
|
903
|
2.06
|
11.94
|
|
All-in sustaining
costs per gold ounce sold ($/ounce)
|
|
|
|
809
|
1.
|
Operating expenses
are apportioned to each metal produced on a percentage of revenue
basis.
|
2.
|
Adjustments
include non-cash items related to inventory write-downs, the
amortization of Mesquite's Purchase Price Allocation ("PPA")
associated with royalties and social closure costs incurred at
Cerro San Pedro that are included in operating
expenses.
|
3.
|
Amounts presented
on a co-product basis remove the impact of other metal sales that
are produced as a by-product of our gold production and apportions
the cash costs to each metal produced on a percentage of revenue
basis.
|
4.
|
Includes the sum
of corporate administration costs and share-based payment expense
per the income statement, net of any non-cash depreciation within
those figures.
|
(3) CASH GENERATED FROM OPERATIONS BEFORE CHANGES IN WORKING
CAPITAL
"Cash generated from operations before changes in working capital"
is a non-GAAP financial measures with no standard meaning under
IFRS, 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. Further details regarding cash generated from operations
before changes in working capital and a reconciliation to the
nearest IFRS measure is provided in the MD&A accompanying New
Gold's financial statements filed from time to time on
www.sedar.com.
NET CASH GENERATED
FROM OPERATIONS BEFORE CHANGES IN WORKING CAPITAL
RECONCILIATION
|
|
Three months ended
December 31
|
Year ended
December 31
|
(in millions of
U.S. dollars)
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
Cash generated from
operations
|
$51.7
|
$84.9
|
$282.2
|
$262.6
|
|
Add back (deduct):
Change in non-cash operating working capital
|
16.8
|
3.0
|
19.6
|
13.8
|
Net cash generated
from operations before changes in non-cash working
capital
|
68.5
|
87.9
|
301.8
|
276.4
|
(4) ADJUSTED NET (LOSS)/EARNINGS
"Adjusted net (loss)/earnings" and "adjusted net (loss)/earnings
per share" are non-GAAP financial measures. Net (loss)/earnings
have been adjusted and tax affected for the group of costs in
"Other gains and losses" on the condensed consolidated income
statement. The adjusted entries are also impacted for tax to the
extent that the underlying entries are impacted for tax in the
unadjusted net (loss)/earnings 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 fair value changes on senior notes and non-hedged
derivatives, foreign currency translation and fair value through
profit or loss and financial asset gains/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.
ADJUSTED NET
EARNINGS RECONCILIATION
|
|
Three months ended
December 31
|
Year ended
December 31
|
(in millions of
U.S. dollars, except per share amounts)
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
Net (loss) earnings
before taxes
|
($16.9)
|
($40.3)
|
$2.0
|
($308.3)
|
|
Other (gains)
losses
|
(13.0)
|
13.8
|
3.8
|
265.7
|
|
Other loss on
disposal of assets
|
0.0
|
0.0
|
0.0
|
3.0
|
|
Provision for office
consolidation
|
0.0
|
0.0
|
0.0
|
0.0
|
|
Loss on hedge
monetization over original term of hedge
|
27.3
|
11.8
|
27.3
|
11.8
|
|
Inventory
write-down
|
6.4
|
20.1
|
6.4
|
20.1
|
Adjusted net earnings
(loss) before tax
|
3.8
|
5.4
|
39.5
|
(7.7)
|
|
Income tax
expense
|
(3.0)
|
30.8
|
0.7
|
106.9
|
|
Income tax
adjustments
|
(3.1)
|
(33.6)
|
(15.9)
|
(110.1)
|
Adjusted income tax
expense
|
6.1
|
(2.8)
|
(15.2)
|
(3.2)
|
Adjusted net earnings
(loss)
|
(2.3)
|
2.6
|
24.3
|
(10.9)
|
Adjusted earnings
(loss) per share (basic and diluted)
|
$nil
|
0.01
|
0.05
|
(0.02)
|
Adjusted effective
tax rate
|
161%
|
52%
|
38%
|
41%
|
(5) 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.
Further details regarding average realized price and a
reconciliation to the nearest IFRS measure is provided in the
MD&A accompanying New Gold's financial statements filed from
time to time on www.sedar.com.
(6) OPERATING MARGIN
"Operating margin" is a non-GAAP financial measure with no standard
meaning under IFRS, which management uses to evaluate the Company's
aggregated and mine-by-mine contribution to net earnings before
non-cash depreciation and depletion charges.
OPERATING MARGIN
RECONCILIATION
|
|
Three months ended
December 31
|
Year ended
December 31
|
(in millions of
U.S. dollars)
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
Revenues
|
$170.3
|
$199.0
|
$683.8
|
$712.9
|
Less: Operating
expenses
|
(114.7)
|
(116.4)
|
(365.8)
|
(419.6)
|
Operating
margin
|
55.6
|
82.6
|
318.0
|
293.3
|
CONSOLIDATED
INCOME STATEMENTS (unaudited)
|
|
Three months ended
December 31
|
Year ended
December 31
|
(in millions of
U.S. dollars, except per share amounts)
|
2016
|
2015
|
2016
|
2015
|
Revenues
|
170.3
|
199.0
|
683.8
|
712.9
|
Operating
expenses
|
114.7
|
116.4
|
365.8
|
419.6
|
Depreciation and
depletion
|
67.5
|
74.1
|
255.4
|
240.7
|
Revenue less cost of
goods sold
|
(11.9)
|
8.5
|
62.6
|
52.6
|
|
|
|
|
|
Corporate
administration
|
6.4
|
3.7
|
22.9
|
20.4
|
Provision for office
consolidation
|
-
|
-
|
-
|
3.0
|
Share-based payment
expenses
|
0.5
|
1.6
|
8.3
|
7.3
|
Asset
impairment
|
6.4
|
20.1
|
6.4
|
20.1
|
Exploration and
business development
|
3.9
|
1.7
|
10.1
|
6.5
|
Earnings (loss) from
operations
|
(29.1)
|
(18.6)
|
14.9
|
(4.7)
|
|
|
|
|
|
Finance
income
|
0.7
|
0.4
|
1.4
|
1.4
|
Finance
costs
|
(1.5)
|
(7.1)
|
(10.5)
|
(38.5)
|
Net other
losses
|
13.0
|
(15.0)
|
(3.8)
|
(266.5)
|
|
|
|
|
|
Earnings (loss)
before taxes
|
(16.9)
|
(40.3)
|
2.0
|
(308.3)
|
Income tax
recovery
|
(3.0)
|
30.8
|
0.7
|
106.9
|
Net earnings
(loss)
|
(19.9)
|
(9.5)
|
2.7
|
(201.4)
|
|
|
|
|
|
Earnings (loss) per
share
|
|
|
|
|
Basic
|
(0.04)
|
(0.02)
|
0.01
|
(0.40)
|
Diluted
|
(0.04)
|
(0.02)
|
0.01
|
(0.40)
|
|
|
|
|
|
Weighted average
number of shares outstanding (in millions)
|
|
|
|
|
Basic
|
513.0
|
509.1
|
511.8
|
509.0
|
Diluted
|
515.8
|
509.1
|
513.8
|
509.0
|
CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION (unaudited)
|
|
As at December
31
|
As at December
31
|
(in millions of
U.S. dollars)
|
2016
|
2015
|
ASSETS
|
|
|
Current
assets
|
|
|
Cash and cash
equivalents
|
185.9
|
335.5
|
Trade and other
receivables
|
37.1
|
109.0
|
Inventories
|
150.0
|
145.9
|
Current income tax
receivable
|
12.5
|
19.2
|
Derivative
assets
|
18.0
|
-
|
Prepaid expenses and
other
|
6.1
|
5.0
|
Total current
assets
|
409.6
|
614.6
|
|
|
|
Non-current
inventories
|
103.3
|
115.4
|
Mining
interests
|
3,206.7
|
2,803.2
|
Deferred tax
assets
|
224.9
|
138.9
|
Other
|
3.5
|
3.4
|
Total
assets
|
3,948.0
|
3,675.5
|
LIABILITIES AND
EQUITY
|
|
|
Current
liabilities
|
|
|
Trade and other
payables
|
169.2
|
141.1
|
Current income tax
payable
|
6.2
|
6.2
|
Total current
liabilities
|
175.4
|
147.3
|
|
|
|
Reclamation and
closure cost obligations
|
81.0
|
67.5
|
Provisions
|
12.0
|
9.2
|
Gold stream
obligation
|
246.5
|
147.6
|
Derivative
liabilities
|
-
|
2.1
|
Long-term
debt
|
889.5
|
787.6
|
Deferred tax
liabilities
|
460.5
|
414.4
|
Other
|
0.2
|
0.2
|
Total
liabilities
|
1,865.1
|
1,575.9
|
|
|
|
Equity
|
|
|
Common
shares
|
2,859.0
|
2,841.0
|
Contributed
surplus
|
100.5
|
102.3
|
Other
reserves
|
(33.0)
|
2.6
|
Deficit
|
(843.6)
|
(846.3)
|
Total
equity
|
2,082.9
|
2,099.6
|
Total liabilities
and equity
|
3,948.0
|
3,675.5
|
CONSOLIDATED
STATEMENTS OF CASH FLOW (unaudited)
|
|
Three months ended
December 31
|
Year ended
December 31
|
(in millions of
U.S. dollars)
|
2016
|
2015
|
2016
|
2015
|
OPERATING
ACTIVITIES
|
|
|
|
|
Net earnings
(loss)
|
(19.9)
|
(9.5)
|
2.7
|
(201.4)
|
Adjustments
for:
|
|
|
|
|
Foreign exchange
losses (gains)
|
7.0
|
25.6
|
(11.7)
|
98.2
|
Reclamation and
closure costs paid
|
(1.2)
|
(0.1)
|
(2.5)
|
(0.5)
|
Impairment of assets
and inventory write down
|
30.9
|
31.5
|
30.9
|
31.5
|
Loss on disposal of
El Morro
|
-
|
(1.7)
|
-
|
180.3
|
Depreciation and
depletion
|
67.6
|
74.8
|
255.6
|
241.4
|
Other non-cash
adjustments
|
(12.3)
|
(1.8)
|
(6.7)
|
(5.3)
|
Income tax
recovery
|
3.0
|
(30.8)
|
(0.7)
|
(106.9)
|
Finance
income
|
(0.7)
|
(0.4)
|
(1.4)
|
(1.4)
|
Finance
costs
|
1.6
|
7.1
|
10.5
|
38.5
|
Unrealized loss on
gold stream liability
|
(3.3)
|
(9.4)
|
31.1
|
(6.2)
|
Financial instrument
transaction costs
|
-
|
(0.2)
|
-
|
2.4
|
|
72.7
|
85.1
|
307.8
|
270.6
|
Change in non-cash
operating working capital
|
(16.8)
|
(3.0)
|
(19.6)
|
(13.8)
|
Income taxes (paid)
refunded
|
(4.2)
|
2.8
|
(6.0)
|
5.8
|
Cash generated from
operations
|
51.7
|
84.9
|
282.2
|
262.6
|
INVESTING
ACTIVITIES
|
|
|
|
|
Mining
interests
|
(164.8)
|
(169.7)
|
(567.0)
|
(389.5)
|
Proceeds from the
sale of assets
|
0.5
|
0.3
|
1.4
|
1.2
|
Proceeds from
disposal of El Morro
|
-
|
87.6
|
-
|
87.6
|
Tax on proceeds from
disposal of El Morro
|
(0.9)
|
(25.2)
|
(0.9)
|
(25.2)
|
Interest
received
|
0.8
|
0.4
|
1.4
|
1.4
|
Gold price option
contract and other investment costs
|
(0.4)
|
-
|
(3.5)
|
-
|
Cash used by
investing activities
|
(164.8)
|
(106.6)
|
(568.6)
|
(324.5)
|
|
|
|
|
|
FINANCING
ACTIVITY
|
|
|
|
|
Proceeds received
from exercise of options and warrants
|
1.2
|
0.2
|
9.7
|
0.4
|
Gold stream agreement
cash flow
|
75.0
|
-
|
75.0
|
100.0
|
Drawdown of revolving
credit facility
|
100.0
|
-
|
100.0
|
-
|
Financing initiation
costs
|
(0.7)
|
0.2
|
(1.0)
|
(2.4)
|
Interest
paid
|
(27.0)
|
(26.2)
|
(55.3)
|
(52.3)
|
Cash generated from
financing activities
|
148.5
|
(25.8)
|
128.4
|
45.7
|
Effect of exchange
rate changes on cash and cash equivalents
|
(0.7)
|
(1.6)
|
8.4
|
(18.8)
|
|
|
|
|
|
Change in cash and
cash equivalents
|
34.7
|
(49.1)
|
(149.6)
|
(35.0)
|
Cash and cash
equivalents, beginning of period
|
151.2
|
384.6
|
335.5
|
370.5
|
Cash and cash
equivalents, end of year
|
185.9
|
335.5
|
185.9
|
335.5
|
|
|
|
|
|
Cash and cash
equivalents are comprised of:
|
|
|
|
|
Cash
|
135.7
|
229.7
|
135.7
|
229.7
|
Short-term money
market instruments
|
50.2
|
105.8
|
50.2
|
105.8
|
|
185.9
|
335.5
|
185.9
|
335.5
|
SOURCE New Gold Inc.