New Gold Reports 2021 Third Quarter Results
TSX - Toronto Stock Exchange
Canada NewsWire
On-Track to Achieve Updated Consolidated Production and Cost Guidance
(All amounts are in U.S. dollars unless otherwise indicated)
TORONTO , Nov. 12, 2021 /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, 2021 . 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.
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"The Company responded well to the challenges experienced in the third quarter, positioning us to meet our updated guidance," stated Renaud Adams , President & CEO. "On a consolidated basis, all-in sustaining costs were down over 9% compared to the first half, with Rainy River's all-in sustaining costs improving by almost 16%. We continue to expect an improvement in fourth quarter production from Rainy River with lower contribution from the East Lobe."
"As we look beyond 2021, we continue to advance the B3 ramp up and C-Zone development at New Afton and the development of the decline towards the Intrepid underground ore zone at Rainy River . We also continue to work on an optimized underground mine plan study at Rainy River , the results of which are expected to be released in the first quarter of 2022 along with our annual 2022 consolidated guidance and year-end Mineral Reserve and Mineral Resource update," added Mr. Adams.
Consolidated Third Quarter Highlights
Total production for the quarter was 105,628 gold equivalent 1 ("gold eq.") ounces (72,210 ounces of gold, 226,679 ounces of silver and 15.6 million pounds of copper). For the nine-month period ended September 30, 2021 , production was 307,359 gold eq. 1 ounces (205,849 ounces of gold, 653,932 ounces of silver and 47.5 million pounds of copper). The Company is currently on track to meet the updated annual consolidated gold equivalent 1 production guidance range (405,000 to 450,000 ounces) and consolidated all-in sustaining costs 2 range ( $1,415 to $1,495 per gold eq. ounce) ( refer to the Company's September 13, 2021 news release for further information ). Revenues for the quarter were $180 million . Operating expense for the quarter was $915 per gold eq. ounce. Total cash costs 2 for the quarter were $966 per gold eq. ounce. All-in sustaining costs 2 for the quarter were $1,408 per gold eq. ounce. Average realized gold price 2 of $1,788 per ounce and average realized copper price 2 of $4.28 per pound. Net loss for the quarter was $11 million ( $0.02 per share). Adjusted net earnings 2 for the quarter were $23 million ( $0.03 per share). Cash generated from operations for the quarter was $54 million ( $0.08 per share). Cash generated from operations for the quarter, before changes in non-cash operating working capital 2 , was $81 million ( $0.12 per share). At the end of the quarter, the Company had a cash position of $151 million and a strong liquidity position of $477 million .
Consolidated Financial Highlights
| | Q3 2021 | Q3 2020 | 9M 2021 | 9M 2020 | | Revenue ($M) | 179.8 | 173.7 | 542.9 | 444.5 | | Operating expenses ($M) | 88.6 | 86.7 | 277.7 | 242.6 | | Net (loss) earnings, per share ($) | (0.02) | 0.02 | (0.02) | (0.09) | | Adj. net earnings (loss), per share ($) 2 | 0.03 | 0.02 | 0.09 | (0.01) | | Operating cash flow, per share ($) | 0.08 | 0.14 | 0.32 | 0.29 | | Adj. operating cash flow, per share ($) 2 | 0.12 | 0.12 | 0.34 | 0.27 |
Revenues for the quarter were $180 million and $543 million for the nine-month period ended September 30, 2021 , an increase compared to the prior-year periods due to higher gold and copper prices, partially offset by lower sales volume. Operating expenses for the quarter and nine-month period ended September 30, 2021 , were higher than the prior-year periods due to the strengthening of the Canadian dollar relative to the U.S. dollar and the prior-year period benefitting from the wage subsidy. Net loss for the quarter ended September 30, 2021 , was $11 million ( $0.02 per share) compared to net earnings for the prior-year period of $16 million ( $0.02 per share). The change was primarily due to an unrealized loss on the revaluation of investments, partially offset by lower finance costs. Net loss for the nine-month period ended September 30, 2021 , was $10 million ( $0.02 per share), a decrease compared to the prior-year period primarily due to higher revenue and lower finance costs, partially offset by an increase in operating expenses and an unrealized loss on the revaluation of investments. Additionally, the prior-year period included a loss on the sale of the Blackwater Project. Adjusted net earnings 2 for the quarter were $23 million ( $0.03 per share) and $58 million ( $0.09 per share) for the nine-month period ended September 30, 2021 , an increase compared to the prior-year periods primarily due to higher revenue and lower finance costs.
Consolidated Operational Highlights
| | Q3 2021 | Q3 2020 | 9M 2021 | 9M 2020 | | Gold eq. production (ounces) 1 | 105,628 | 115,536 | 307,359 | 317,050 | | Gold eq. sold (ounces) 1 | 97,196 | 110,905 | 293,235 | 306,231 | | Gold production (ounces) | 72,210 | 78,959 | 205,849 | 210,043 | | Gold sold (ounces) | 66,982 | 75,760 | 198,705 | 205,385 | | Copper production (Mlbs) | 15.6 | 18.2 | 47.5 | 53.6 | | Copper sold (Mlbs) | 14.0 | 17.5 | 44.2 | 50.5 | | Average realized gold price, per ounce 2 | 1,788 | 1,613 | 1,798 | 1,532 | | Average realized copper price, per pound 2 | 4.28 | 2.99 | 4.20 | 2.69 | | Operating expenses, per gold eq. ounce | 915 | 778 | 947 | 791 | | Total cash costs, per gold eq. ounce 2 | 966 | 822 | 1,001 | 839 | | Depreciation and depletion, per gold eq. ounce | 497 | 452 | 496 | 469 | | All-in sustaining costs, per gold eq. ounce 2 | 1,408 | 1,313 | 1,503 | 1,349 | | Sustaining capital and sustaining leases ($M) 2 | 34.9 | 46.1 | 122.4 | 136.3 | | Growth capital ($M) 2 | 23.1 | 16.4 | 74.8 | 46.6 |
Rainy River
Operational Highlights
| Rainy River Mine | Q3 2021 | Q3 2020 | 9M 2021 | 9M 2020 | | Gold eq. production (ounces) 1 | 60,785 | 64,221 | 172,462 | 164,960 | | Gold eq. sold (ounces) 1 | 57,800 | 61,726 | 168,682 | 163,137 | | Gold production (ounces) | 58,557 | 63,004 | 166,113 | 162,185 | | Gold sold (ounces) | 55,597 | 60,592 | 162,454 | 160,438 | | Average realized gold price, per ounce 2 | 1,788 | 1,615 | 1,797 | 1,533 | | Operating expenses, per gold eq. ounce | 960 | 833 | 979 | 924 | | Total cash costs, per gold eq. ounce 2 | 960 | 833 | 979 | 924 | | Depreciation and depletion, per gold eq. ounce | 635 | 602 | 647 | 634 | | All-in sustaining costs, per gold eq. ounce 2 | 1,307 | 1,469 | 1,470 | 1,592 | | Sustaining capital and sustaining leases ($M) 2 | 17.6 | 37.4 | 76.9 | 103.9 | | Growth capital ($M) 2 | 4.3 | 0.1 | 9.3 | 0.3 |
Operating Key Performance Indicators
| Rainy River Mine (Open Pit Mine only) | Q3 2020 | Q4 2020 | Q1 2021 | Q2 2021 | Q3 2021 | | Tonnes mined per day (ore and waste) | 145,701 | 158,638 | 150,767 | 158,556 | 149,630 | | Ore tonnes mined per day | 36,515 | 42,918 | 35,681 | 36,256 | 52,917 | | Operating waste tonnes per day | 62,818 | 73,921 | 65,643 | 71,124 | 88,216 | | Capitalized waste tonnes per day | 46,368 | 41,799 | 49,442 | 51,176 | 8,497 | | Total waste tonnes per day | 109,186 | 115,720 | 115,085 | 122,300 | 96,713 | | Strip ratio (waste:ore) | 2.99 | 2.70 | 3.23 | 3.37 | 1.83 | | Tonnes milled per calendar day | 26,998 | 26,999 | 26,301 | 25,349 | 25,245 | | Gold grade milled (g/t) | 0.88 | 0.93 | 0.80 | 0.82 | 0.89 | | Gold recovery (%) | 89 | 90 | 89 | 87 | 89 | | Mill availability (%) | 90 | 94 | 89 | 88 | 91 | | Gold production (ounces) | 63,004 | 66,734 | 54,656 | 52,901 | 58,557 | | Gold eq. production (ounces) 1 | 64,221 | 68,241 | 56,513 | 55,163 | 60,785 |
Third quarter gold eq. 1 production was 60,785 ounces (58,557 ounces of gold and 160,461 ounces of silver), a decrease compared to the prior-year period due to lower tonnes milled. For the nine-month period ended September 30, 2021 , gold eq. 1 production was 172,462 ounces (166,113 ounces of gold and 457,069 ounces of silver), an increase over the prior-year period due to higher tonnes processed, with the prior-year period including a two-week voluntary shutdown due to COVID-19. Operating expense and total cash costs 2 were $960 per gold eq. ounce for the quarter, an increase over the prior-year period due to lower sales volumes, the strengthening of the Canadian dollar relative to the U.S. dollar, and the prior-year period benefitting from the wage subsidy. The strengthening of the Canadian dollar and the loss of the wage subsidy increased costs by approximately $90 per gold eq. ounce in the quarter. For the nine-month period ended September 30, 2021 , operating expense and total cash costs 2 were $979 per gold eq. ounce, an increase over the prior-year period due to the strengthening of the Canadian dollar relative to the U.S. dollar, and the receipt of the wage subsidy in the prior-year period. Sustaining capital and sustaining lease 2 payments for the quarter were $18 million , including $2 million of capitalized mining costs. Sustaining capital spend during the quarter primarily included the advancement of the annual tailings dam raise. For the nine-month period ended September 30, 2021 , sustaining capital and sustaining lease 2 payments were $77 million , including $29 million of capitalized mining costs. All-in sustaining costs 2 were $1,307 per gold eq. ounce for the quarter, a decrease over the prior-year period primarily due to lower sustaining capital spend, partially offset by lower sales volumes and higher total cash costs. For the nine-month period ended September 30, 2021 , all-in sustaining costs 2 were $1,470 per gold eq. ounce, a decrease over the prior-year period primarily due to higher sales volumes and lower sustaining capital spend. Growth capital 2 for the quarter was $4 million and $9 million for the nine-month period ended September 30, 2021 , related to the development of the Intrepid underground ore zone. During the quarter, development of the decline towards the Intrepid underground ore zone advanced 215 metres. The open pit mine achieved 149,630 tonnes per day during the quarter, in-line with the 2021 overall target of ~151,000 tonnes per day. Approximately 4.9 million ore tonnes and 8.9 million waste tonnes (including 0.8 million capitalized waste tonnes) were mined from the open pit at an average reduced strip ratio of 1.83:1. As planned, the strip ratio is expected to remain approximately 2:1 for the remainder of the year to achieve the original 2021 guidance of approximately 2.7:1. The mill processed 25,245 tonnes per day for the quarter, a decrease compared to the prior-year period due to maintenance activities performed on the gyratory crusher impacting mill throughput. The mill processed an average grade of 0.89 grams per tonne at a gold recovery of 89%. Mill availability for the quarter averaged 91%. There are currently no active cases of COVID-19 at the Rainy River Mine. Rainy River has implemented measures to mitigate and limit the spread of COVID-19 to protect the well-being of its employees, contractors, their families, local communities, and other stakeholders. For more information see: http://newgold.com/covid-19/ .
New Afton Mine
Operational Highlights
| New Afton Mine | Q3 2021 | Q3 2020 | 9M 2021 | 9M 2020 | | Gold eq. production (ounces) 1 | 44,843 | 51,315 | 134,898 | 152,090 | | Gold eq. sold (ounces) 1 | 39,395 | 49,179 | 124,553 | 143,094 | | Gold production (ounces) | 13,653 | 15,955 | 39,735 | 47,858 | | Gold sold (ounces) | 11,385 | 15,168 | 36,251 | 44,948 | | Copper production (Mlbs) | 15.6 | 18.2 | 47.5 | 53.6 | | Copper sold (Mlbs) | 14.0 | 17.5 | 44.2 | 50.5 | | Average realized gold price, per ounce 2 | 1,789 | 1,606 | 1,803 | 1,529 | | Average realized copper price, per pound 2 | 4.28 | 2.99 | 4.20 | 2.69 | | Operating expenses, per gold eq. ounce | 849 | 708 | 904 | 640 | | Total cash costs, per gold eq. ounce 2 | 974 | 807 | 1,030 | 742 | | Depreciation and depletion, per gold eq. ounce | 288 | 255 | 285 | 272 | | All-in sustaining costs, per gold eq. ounce 2 | 1,423 | 988 | 1,403 | 971 | | Sustaining capital and sustaining leases ($M) 2 | 17.4 | 8.7 | 45.1 | 32.0 | | Growth capital ($M) 2 | 18.8 | 16.1 | 65.5 | 37.2 |
Operating Key Performance Indicators
| New Afton Mine | Q3 2020 | Q4 2020 | Q1 2021 | Q2 2021 | Q3 2021 | | Tonnes mined per day (ore and waste) | 17,249 | 17,259 | 11,395 | 15,104 | 12,861 | | Tonnes milled per calendar day | 15,483 | 15,358 | 13,564 | 13,795 | 13,068 | | Gold grade milled (g/t) | 0.44 | 0.46 | 0.39 | 0.43 | 0.43 | | Gold recovery (%) | 80 | 79 | 79 | 80 | 83 | | Gold production (ounces) | 15,955 | 16,362 | 11,994 | 14,088 | 13,653 | | Copper grade milled (%) | 0.71 | 0.73 | 0.64 | 0.79 | 0.72 | | Copper recovery (%) | 82 | 81 | 80 | 83 | 82 | | Copper production (Mlbs) | 18.2 | 18.5 | 13.8 | 18.2 | 15.6 | | Mill availability (%) | 98 | 99 | 96 | 98 | 98 | | Gold eq. production (ounces) 1 | 51,315 | 52,326 | 39,512 | 50,542 | 44,843 |
Third quarter gold eq. 1 production was 44,843 ounces (13,653 ounces of gold, and 15.6 million pounds of copper), a decrease compared to the prior-year period primarily due to lower tonnes milled. For the nine-month period ended September 30, 2021 , gold eq. 1 production was 134,898 ounces (39,735 ounces of gold and 47.5 million pounds of copper), a decrease over the prior-year period primarily due to lower tonnes processed. Operating expense and total cash costs 2 were $849 and $974 per gold eq. ounce for the quarter, an increase over the prior-year period due to lower sales volumes, the strengthening of the Canadian dollar relative to the U.S. dollar, and the prior-year period benefitting from the wage subsidy. The strengthening of the Canadian dollar and the loss of the wage subsidy increased costs by approximately $70 per gold eq. ounce in the quarter. For the nine-month period ended September 30, 2021 , operating expense and total cash costs 2 were $904 and $1,030 per gold eq. ounce, an increase over the prior-year period due to lower sales volumes, the strengthening of the Canadian dollar relative to the U.S. dollar, and the receipt of the wage subsidy in the prior-year period. Sustaining capital and sustaining lease 2 payments for the quarter were $17 million , primarily related to B3 mine development and the advancement of the planned tailings dam raise. For the nine-month period ended September 30, 2021 , sustaining capital and sustaining lease 2 payments were $45 million . All-in sustaining costs 2 were $1,423 per gold eq. ounce for the quarter and $1,403 per gold eq. ounce for the nine-month period ended September 30, 2021 . The increases over the prior-year periods were due to lower sales volumes, higher total cash costs and higher sustaining capital spend. Growth capital 2 was $19 million for the quarter, and $66 million for the nine-month period ended September 30, 2021 , primarily related to C-Zone development and the thickened and amended tailings project. C-Zone development advanced by approximately 790 metres in the quarter and continues to advance on plan. The underground mine averaged 12,861 tonnes per day during the quarter as the mine focused on recovery level activities and the progressive ramp-up of the B3 zone. The mining rate is expected to increase as more drawpoints become available and as the B3 zone continues to ramp-up. The mill averaged 13,068 tonnes per day, below the prior-year period, but in-line with mining rates and the plan to optimize metal recoveries while processing higher grade supergene ore. The mill processed gold grades of 0.43 grams per tonne and copper grades of 0.72%, with gold and copper recoveries of 83% and 82%, respectively. There is currently one active case of COVID-19 at the New Afton Mine. New Afton has implemented measures to mitigate and limit the spread of COVID-19 to protect the well-being of its employees, contractors, their families, local communities, and other stakeholders. For more information see: http://newgold.com/covid-19/ .
Sustainability and ESG
New Gold has four sustainability focus areas: Indigenous Peoples, Tailings Management, Water and Climate. New Gold has adapted its sustainability efforts to align with the most pressing ESG issues facing the Company and the mining industry. As such, our ESG approach continues to prioritize the health, safety, and well-being of our people and the people in the communities in which we operate. The protection of our people is central to our success as we believe people are our greatest asset. New Gold is committed to providing training, opportunities, and progression paths for our teams, and we actively seek to ensure that we promote diversity within our teams at all levels of the organization. We have adopted an approach to execute on our sustainability strategy that aligns with ESG reporting standards.
Third Quarter 2021 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://produceredition.webcasts.com/starthere.jsp?ei=1503407&tp_key=ffe45e2c74 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 50065410. A recorded playback of the conference call will be available until December 12, 2021 by calling North American toll free 1-888-390-0541, or 1-416-764-8677 outside of the U.S. and Canada , passcode 065410. 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 8% gold stream on the Artemis Gold Blackwater project located in Canada , 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 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 eq. based on a ratio of $1,800 per gold ounce, $25.00 per silver ounce and $3.50 per copper pound used for 2021 guidance estimates. All copper is produced/sold by the New Afton Mine. Gold eq. ounces for Rainy River in Q3 2021 includes production of 160,461 ounces of silver (158,676 ounces sold) converted to a gold eq. based on a ratio of $1,800 per gold ounce and $25.00 per silver ounce used for 2021 guidance estimates. Gold eq. ounces for New Afton in Q3 2021 includes 15.6 million pounds of copper produced (14.0 million pounds sold) and 66,218 ounces of silver produced 54,792 ounces of silver sold) converted to a gold eq. based on a ratio of $1,800 per gold ounce, 3.50 per copper pound and $25.00 per silver ounce used for 2021 guidance estimates. | | | | | 2. | "Total cash costs", "all-in sustaining costs", "adjusted net earnings/(loss)", "sustaining capital and sustaining leases", "growth capital", "cash generated from operations", and "average realized gold/copper price per ounce/pound" are all non-GAAP financial performance measures that are used in this press 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. |