Blue Jay Gold Corp. press release
New Gold Reports 2022 Third Quarter Results
TSXV - TSX Venture Exchange · Canada
Canada NewsWire
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(All amounts are in U.S. dollars unless otherwise indicated)
TORONTO , Nov. 3, 2022 /CNW/ - New Gold Inc. ("New Gold" or the "Company") (TSX: NGD) (NYSE American: NGD) reports third quarter results for the Company as of September 30, 2022 . The Company will host a conference call and webcast today at 8:30 am Eastern Time to discuss the third quarter consolidated results (details are provided at the end of this news release). For detailed information, please refer to the Company's third quarter Management's Discussion and Analysis (MD&A) and Financial Statements that are available on the Company's website at www.newgold.com and on SEDAR at www.sedar.com . The Company uses certain non-GAAP financial performance measures throughout this news release. Please refer to the "Non-GAAP Financial Performance Measures" section of this news release and the MD&A for more information. Numbered note references throughout this news release are to endnotes which can be found at the end of this news release.
Consolidated Third Quarter Highlights
Gold equivalent 1 ("gold eq.") production for the quarter of 91,021 ounces (70,147 ounces of gold, 8.5 million pounds of copper and 142,672 ounces of silver) Operating expenses of $1,069 per gold eq. ounce 4 All-in sustaining costs 2 of $1,637 per gold eq. ounce, including total cash costs 2 of $1,114 per gold eq. ounce Average realized gold price 2 of $1,727 per ounce and average realized copper price 2 of $3.42 per pound Cash generated from operations of $54 million , or $0.08 per share Cash generated from operations, before changes in non-cash operating working capital 2 of $44 million , or $0.06 per share Net loss of $4 million , or $0.01 per share Adjusted net loss 2 of $13 million, or $0 .02 per share September 30, 2022 cash and cash equivalents of $247 million Subsequent to quarter end, the Company announced the receipt of the New Afton C-Zone Mines Act permit (re fer to the Company's October 7, 2022 news release for further information )
"The third quarter saw our operations recover from their respective challenges during the first half of the year," stated Renaud Adams , President & CEO. " Rainy River is focused on continuing its ramp-up of mining the open pit main ODM zone in the fourth quarter. Underground production commenced during the quarter and the priority continues to be feeding the mill with higher grade Intrepid underground material, which I anticipate in the very near term. At New Afton, receiving the C-Zone permit and completing B3 development and drawbell construction in late-October, were significant milestones. Our priority remains on ramping up B3 production during the fourth quarter and continuing to advance C-Zone development, with initial production from the C-Zone expected in the second half of 2023."
Consolidated Financial Highlights
| | Q3 2022 | Q3 2021 | 9M 2022 | 9M 2021 | | Revenue ($M) | 151.2 | 179.8 | 441.6 | 542.9 | | Operating expenses ($M) | 99.2 | 88.6 | 274.2 | 277.7 | | Net (loss) earnings ($M) | (4.2) | (11.3) | (49.9) | (10.3) | | Net (loss) per share ($) | (0.01) | (0.02) | (0.07) | (0.02) | | Adj. net (loss) earnings ($M) 2 | (13.4) | 23.4 | (19.8) | 58.2 | | Adj. net (loss) earnings, per share ($) 2 | (0.02) | 0.03 | (0.03) | 0.09 | | Cash generated from operations ($M) | 53.7 | 54.3 | 158.9 | 218.0 | | Cash generated from operations, per share ($) | 0.08 | 0.08 | 0.23 | 0.32 | | Cash generated from operations, before changes in non-cash operating working capital ($M) 2 | 43.6 | 81.3 | 137.4 | 229.8 | | Cash generated from operations, before changes in non-cash operating working capital, per share ($) 2 | 0.06 | 0.12 | 0.20 | 0.34 |
Revenue decreased over the prior-year periods due to lower copper sales volume and lower realized copper prices, partially offset by higher realized gold prices for the nine-month period ended September 30, 2022 . Operating expenses were higher than the prior-year period due to higher operating expenses at New Afton as production from B3 continues to ramp-up. For the nine-month period ended September 30, 2022, operating expenses were consistent with the prior-year period. Net loss decreased over the prior-year period primarily due to the gain on the revaluation of the Rainy River gold stream and New Afton free cash flow obligation, partially offset by lower revenue. For the nine-month period ended September 30, 2022 , net loss increased over the prior-year period primarily due to lower revenue, partially offset by the gain on the revaluation of the New Afton free cash flow obligation. Adjusted net loss 2 increased over the prior-year periods primarily due to lower revenue. Cash generated from operations decreased over the prior-year periods due to lower revenue, partially offset by positive working capital movements.
Consolidated Operational Highlights
| | Q3 2022 | Q3 2021 | 9M 2022 | 9M 2021 | | Gold eq. production (ounces) 1,3 | 91,021 | 105,628 | 249,230 | 307,359 | | Gold eq. sold (ounces) 1,3 | 92,634 | 97,196 | 247,678 | 293,235 | | Gold production (ounces) 3 | 70,147 | 72,210 | 190,679 | 205,849 | | Gold sold (ounces) 3 | 68,816 | 66,982 | 190,641 | 198,705 | | Copper production (Mlbs) 3 | 8.5 | 15.6 | 24.1 | 47.5 | | Copper sold (MIbs) 3 | 9.9 | 14.0 | 23.5 | 44.2 | | Gold revenue, per ounce ($) | 1,703 | 1,770 | 1,814 | 1,778 | | Copper revenue, per pound ($) | 3.17 | 4.02 | 3.75 | 3.94 | | Average realized gold price, per ounce ($) 2 | 1,727 | 1,788 | 1,831 | 1,798 | | Average realized copper price, per pound ($) 2 | 3.42 | 4.28 | 3.99 | 4.20 | | Operating expenses, per gold eq. ounce ($) 4 | 1,069 | 915 | 1,106 | 947 | | Total cash costs, per gold eq. ounce ($) 2 | 1,114 | 966 | 1,143 | 1,001 | | Depreciation and depletion, per gold eq. ounce ($) 4 | 599 | 497 | 580 | 496 | | All-in sustaining costs, per gold eq. ounce ($) 2 | 1,637 | 1,408 | 1,875 | 1,503 | | Sustaining capital and sustaining leases ($M) 2 | 42.4 | 35.3 | 157.9 | 123.2 | | Growth capital ($M) 2 | 30.3 | 23.1 | 72.1 | 74.8 | | Total capital and leases ($M) | 72.7 | 58.4 | 230.0 | 198.0 |
Rainy River Mine
Operational Highlights
| Rainy River Mine | Q3 2022 | Q3 2021 | 9M 2022 | 9M 2021 | | Gold eq. production (ounces) 1,3 | 60,319 | 60,785 | 163,973 | 172,462 | | Gold eq. sold (ounces) 1,3 | 56,932 | 57,800 | 165,396 | 168,682 | | Gold production (ounces) 3 | 58,719 | 58,557 | 160,069 | 166,113 | | Gold sold (ounces) 3 | 55,421 | 55,597 | 161,573 | 162,454 | | Gold revenue, per ounce ($) | 1,729 | 1,788 | 1,832 | 1,797 | | Average realized gold price, per ounce ($) 2 | 1,729 | 1,788 | 1,832 | 1,797 | | Operating expenses, per gold eq. ounce ($) 4 | 955 | 960 | 973 | 979 | | Total cash costs, per gold eq. ounce ($) 2 | 955 | 960 | 973 | 979 | | Depreciation and depletion, per gold eq. ounce ($) 4 | 687 | 635 | 665 | 647 | | All-in sustaining costs, per gold eq. ounce ($) 2 | 1,483 | 1,307 | 1,662 | 1,470 | | Sustaining capital and sustaining leases ($M) 2 | 28.4 | 17.6 | 108.0 | 76.9 | | Growth capital ($M) 2 | 6.0 | 4.3 | 13.5 | 9.3 | | Total capital and leases ($M) | 34.4 | 21.9 | 121.5 | 86.2 |
Operating Key Performance Indicators
| Rainy River Mine (Open Pit Mine only) | Q3 2022 | Q3 2021 | 9M 2022 | 9M 2021 | | Tonnes mined per day (ore and waste) | 112,055 | 149,630 | 113,597 | 152,980 | | Ore tonnes mined per day | 24,701 | 52,917 | 19,022 | 41,681 | | Operating waste tonnes per day | 44,469 | 88,216 | 33,110 | 75,077 | | Capitalized waste tonnes per day | 42,885 | 8,497 | 61,465 | 36,222 | | Total waste tonnes per day | 87,354 | 96,713 | 94,575 | 111,299 | | Strip ratio (waste:ore) | 3.54 | 1.83 | 4.97 | 2.67 | | Tonnes milled per calendar day | 24,439 | 25,245 | 24,020 | 25,628 | | Gold grade milled (g/t) | 0.89 | 0.89 | 0.83 | 0.83 | | Gold recovery (%) | 91 | 89 | 91 | 89 |
Rainy River's focus for the fourth quarter continues to be ramping up mining of the open pit main ODM zone and introducing the underground material to the mill. Steps were taken over the summer to better position the open pit operations, and substantially complete all of the remaining glacial till waste stripping, with only approximately 2.4 million tonnes left to be mined beginning in the fourth quarter. The strip ratio is expected to be below 3:1 for the remainder of the year, and approximately 2.1:1 for the remainder of the open pit life. Underground production has commenced from the Intrepid zone and will continue to ramp-up over the coming months.
Open pit tonnes mined per day decreased over the prior-year periods to minimize the amount of rehandling required to feed the mill, and to dewater the open pit early in the quarter. As of the beginning of September, mining from the main ODM zone had commenced and will continue to ramp-up in the coming months. Approximately 2.3 million ore tonnes and 8.0 million waste tonnes (including 3.9 million capitalized waste tonnes) were mined from the open pit at an average strip ratio of 3.54:1.
Mining from the underground Intrepid zone advanced during the quarter with the first stope blasted on September 13, 2022 . Gold grade from the first stope has reconciled positively to the modeled gold grade and production will continue to ramp-up over the coming months. Underground development advanced an additional 833 metres during the quarter, with the main decline ramp reaching the 200 metre level ahead of plan.
Tonnes milled per calendar day decreased over the prior-year periods primarily due to processing harder ore from the North Lobe. Mining from the North Lobe open pit is expected to be completed in the first half of 2023.
Gold eq. 1 production was 60,319 ounces (58,719 ounces of gold and 120,000 ounces of silver), in-line with the prior-year period. For the nine-month period ended September 30, 2022 , gold eq. 1 production was 163,973 ounces (160,069 ounces of gold and 292,831 ounces of silver), a decrease over the prior-year period primarily due to lower tonnes processed, partially offset by higher gold recoveries.
Operating expense per gold eq. ounce 4 was in-line with the prior-year periods as inflation-driven price increases were partially offset by a weakening of the Canadian dollar relative to the U.S. dollar.
All-in sustaining costs 2 per gold eq. ounce increased over the prior-year periods primarily due to higher sustaining capital spend.
Total capital and leases for the quarter were $34 million and $122 million for the nine-month period ended September 30, 2022 , an increase over the prior-year periods due to higher sustaining capitalized waste mining costs as a result of the higher strip ratio. Sustaining capital 2 during the quarter primarily related to $16 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.
Free cash flow 2 for the quarter and nine-month period ended September 30, 2022 was a net outflow of $0.7 million (net of a $5 million stream payment) and net inflow of $14 million (net of a $18 million stream payment), respectively, an improvement over the prior-year periods due to an increase in cash generated from operations partially offset by an increase in capital expenditures.
New Afton Mine
Operational Highlights
| New Afton Mine | Q3 2022 | Q3 2021 | 9M 2022 | 9M 2021 | | Gold eq. production (ounces) 1,3 | 30,701 | 44,843 | 85,257 | 134,898 | | Gold eq. sold (ounces) 1,3 | 35,702 | 39,395 | 82,282 | 124,553 | | Gold production (ounces) 3 | 11,427 | 13,653 | 30,610 | 39,735 | | Gold sold (ounces) 3 | 13,395 | 11,385 | 29,068 | 36,251 | | Copper production (Mlbs) 3 | 8.5 | 15.6 | 24.1 | 47.5 | | Copper sold (Mlbs) 3 | 9.9 | 14.0 | 23.5 | 44.2 | | Gold revenue, per ounce ($) | 1,595 | 1,681 | 1,712 | 1,692 | | Copper revenue, per ounce ($) | 3.17 | 4.02 | 3.75 | 3.94 | | Average realized gold price, per ounce ($) 2 | 1,721 | 1,789 | 1,825 | 1,803 | | Average realized copper price, per pound ($) 2 | 3.42 | 4.28 | 3.99 | 4.20 | | Operating expenses, per gold eq. ounce ($) 4 | 1,250 | 849 | 1,374 | 904 | | Total cash costs, per gold eq. ounce ($) 2 | 1,367 | 974 | 1,485 | 1,030 | | Depreciation and depletion, per gold eq. ounce ($) 4 | 455 | 288 | 403 | 285 | | All-in sustaining costs, per gold eq. ounce ($) 2 | 1,769 | 1,423 | 2,101 | 1,403 | | Sustaining capital and sustaining leases ($M) 2 | 13.8 | 17.4 | 48.9 | 45.1 | | Growth capital ($M) 2 | 24.3 | 18.8 | 58.6 | 65.5 | | Total capital and leases ($M) | 38.1 | 36.2 | 107.5 | 110.6 |
Operating Key Performance Indicators
| New Afton Mine | Q3 2022 | Q3 2021 | 9M 2022 | 9M 2021 | | Tonnes mined per day (ore and waste) | 6,523 | 12,861 | 6,674 | 13,125 | | Tonnes milled per calendar day | 7,764 | 13,068 | 9,836 | 13,474 | | Gold grade milled (g/t) | 0.59 | 0.43 | 0.43 | 0.42 | | Gold recovery (%) | 85 | 83 | 83 | 81 | | Copper grade milled (%) | 0.64 | 0.72 | 0.50 | 0.72 | | Copper recovery (%) | 85 | 82 | 81 | 82 |
New Afton's priority for the remainder of the year is to ramp-up B3 production and continue to advance C-Zone development, with first production from C-Zone expected in the second half of 2023. Gold and copper production are expected to significantly increase during the C-Zone period, with all-in sustaining costs to significantly decrease, leading to robust free cash flow during that time. Underground tonnes mined per day decreased over the prior-year periods due to the planned completion of Lift 1 mining activities, as well as the closure of the low grade-higher cost recovery level zone in June, earlier than planned. B3 production ramp-up continued on schedule during the quarter, with mining rates expected to reach 8,000 tonnes per day by early-2023. Tonnes milled per calendar day decreased over the prior-year periods as planned. During the quarter the site incorporated lower grade surface stockpiles into the mill feed to supplement the overall lower tonnes mined. Gold eq. 1 production was 30,701 ounces (11,427 ounces of gold and 8.5 million pounds of copper), and for the nine-month period ended September 30, 2022 , gold eq. 1 production was 85,257 ounces (30,610 ounces of gold and 24.1 million pounds of copper), a decrease over the prior-year periods due to lower tonnes processed and lower copper grades. Third quarter gold eq. 1 sales included approximately 7,500 gold eq. ounces which had been deferred from the second quarter due to the timing of concentrate shipments. Operating expense per gold eq. ounce 4 increased over the prior-year periods, primarily due to lower sales volume. All-in sustaining costs 2 per gold eq. ounce increased over the prior-year periods, primarily due to lower sales volume, and higher sustaining capital spend for the nine-month period ended September 30, 2022 . Total capital and leases for the quarter were $38 million and $107 million for the nine-month period ended September 30, 2022 , in-line with the prior-year periods. Sustaining capital 2 in the quarter primarily related to B3 mine development and tailings management and stabilization activities. Growth capital 2 in the quarter primarily related to C-Zone development, which advanced 998 metres during the quarter. Free cash flow 2 for the quarter and nine-month period ended September 30, 2022 was a net outflow of $20 million and $96 million , respectively, a decrease over the prior-year periods due to lower revenue.
Third 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 third quarter consolidated results.
Participants may listen to the webcast by registering on our website at www.newgold.com or via the following link https://app.webinar.net/rVqwoXNKjA9 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 79467062 A recorded playback of the conference call will be available until December 3, 2022 by calling North American toll free 1-888-390-0541, or 1-416-764-8677 outside of the U.S. and Canada , passcode 79467062. 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 an approximately 4% 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 Q3 2022 includes production of 120,000 ounces of silver (113,306 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 Q3 2022 includes 8.5 million pounds of copper produced (9.9 million pounds sold) and 22,672 ounces of silver produced (30,623 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" (or "AISC"), "adjusted net earnings/(loss)", "adjusted tax expense", "sustaining capital and sustaining leases", "growth capital", "cash generated from operations, before changes in non-cash operating working capital", "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. | | | | | 3. | Production is shown on a total contained basis while sales are shown on a net payable basis, including final product inventory and smelter payable adjustments, where applicable. | | | | | 4. | These are supplementary financial measures which are calculated as follows: "Operating expenses per gold eq. ounce sold" is total operating expenses divided by total gold equivalent ounces sold and "depreciation and depletion per gold eq. ounce sold" is total depreciation and depletion divided by total gold equivalent ounces sold. |
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.