Algoma Steel Group Inc. press release
New Gold Reports 2022 First Quarter Results
TSX - Toronto Stock Exchange · Canada
Canada NewsWire
(All amounts are in U.S. dollars unless otherwise indicated)
TORONTO , May 2, 2022 /CNW/ - 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.
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Consolidated First Quarter Highlights
Gold equivalent 1 ("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 costs 2 of $1,778 per gold eq. ounce, including total cash costs 2 of $1,069 per gold eq. ounce Average realized gold price 2 of $1,897 per ounce and average realized copper price 2 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 capital 2 of $66 million , or $0.10 per share Net loss of $8 million , or ($0.01) per share Adjusted net earnings 2 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 ($) 2 | 0.10 | 0.09 |
Revenues increased over the prior-year period due to higher gold and copper prices and higher gold sales volume, partially offset by lower copper sales volume. Operating expenses were consistent with the prior-year period. Net loss for the quarter compared to net earnings in the prior-year period primarily due to an unrealized loss on the revaluation of the gold stream obligation derivative resulting from the updated Technical Report for Rainy River . Adjusted net earnings 2 increased over the prior-year period due to higher revenues, partially offset by higher depreciation and depletion and exploration. Operating cash flow increased over the prior-year period due to higher revenues and negative working capital movements in the prior-year period.
Consolidated Operational Highlights
| | Q1 2022 | Q1 2021 | | Gold eq. production (ounces) 1 | 87,696 | 96,026 | | Gold eq. sold (ounces) 1 | 92,536 | 91,818 | | Gold production (ounces) | 68,101 | 66,650 | | Gold sold (ounces) | 70,562 | 63,539 | | Copper production (Mlbs) | 8.2 | 13.8 | | Copper sold (MIbs) | 9.2 | 13.3 | | Gold revenue, per ounce ($) | 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 costs 2 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 capital 2 primarily related to the development of the Intrepid underground zone, which advanced 512 metres. Free cash flow 2 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 costs 2 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 capital 2 primarily related to C-Zone development, which advanced 931 metres in the quarter. Free cash flow 2 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.