Standard Lithium Ltd. press release
NEW GOLD ANNOUNCES MINE LIFE EXTENSION AT BOTH NEW AFTON AND RAINY RIVER; OUTLINES STRONG FREE CASH FLOW PROFILE OVER NEXT THREE YEARS
TSXV - TSX Venture Exchange · Lithium · Bromine · Potash · Sodium · Canada
PR Newswire
Provides Three-Year Operational Outlook and Files Updated Technical Reports for New Afton and Rainy River Mines
(All amounts are in U.S. dollars unless otherwise indicated)
TORONTO , Feb. 12, 2025 /PRNewswire/ - New Gold Inc. ("New Gold" or the "Company") (TSX: NGD) (NYSE American: NGD) is pleased to provide its three-year operational outlook and announces the filing of Technical Reports for the New Afton and Rainy River mines. The Technical Reports were prepared in compliance with National Instrument 43-101 ("NI 43-101"). The Company is also providing its updated Mineral Reserve and Mineral Resource Statement as of December 31, 2024 . The Technical Reports are available on SEDAR+ at www.sedarplus.com and on the Company's website at www.newgold.com . The Company will be hosting a conference call and webcast on Thursday, February 13, 2025 at 1:00 pm Eastern Time to discuss its operational outlook and Technical Report highlights.
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The Company uses certain non-GAAP financial performance measures throughout this release. Please refer to the "Non-GAAP Financial Performance Measures" section of this news release for more information. Numbered note references throughout this news release are to endnotes which can be found at the end of this news release.
New Projects Drive Mine Life Extensions at Both Assets with Significant Upside Remaining
"Today's life-of-mine plans successfully outline New Gold's strong production profile with reducing costs, strong free cash flow generation and increasing net asset value, while also highlighting exciting opportunities to build on over the longer-term," stated Patrick Godin , President and CEO. "Our exploration efforts translated to successfully replacing mining depletion of Reserves in 2024. At New Afton, the East Extension expansion adds high-grade material to a low risk, low-cost operation while C-Zone's increased draw height extends mine life at no additional capital. At Rainy River , the Phase 5 expansion extends the open pit, accomplishing our main mine plan objectives to push processing of the low-grade stockpile into the future and keep the mill full to the end of 2029. The life-of-mine plans described in the two Technical Reports provide an excellent base on which the Company can build in the years to come. Significant upside and opportunities have been outlined at each project and I look forward to updating you on our progress."
New Afton Life -of-Mine Highlights
Copper and gold Mineral Reserves increased by 15% and 13%, respectively, compared to year-end 2023. C-Zone Mineral Reserves tonnes increased by 27% year-over-year with an increase in draw height to 450 metres, extending the New Afton reserve mine life to 2031. These additional Mineral Reserves come at no additional capital cost. The East Extension zone is added to Mineral Reserves for the first time, following completion of a technical study in 2024. East Extension, with copper and gold grades more than double C-Zone grades, adds high-grade, supplementary mill feed during the C-Zone production period, while providing a platform for further growth in the Eastern Sector of the mine. The increased Mineral Reserves are the basis for the life-of-mine plan outlined in the updated New Afton Technical Report. With the C-Zone block cave ramping-up production as planned, copper and gold production are expected to increase significantly through 2025 and over the next three-years. With the production rate returning to 16,000 tonnes per day by 2026, New Afton is established to deliver strong operating margins, driven by life-of-mine total operating costs averaging less than $30 per tonne. Together with a tapering capital cost profile, New Afton is expected to generate significant cash flow. Upside to the Technical Report remains with opportunities to optimize and extend mine life from the prospective K-Zone, HW Zone, and D-Zone. K-Zone, the focus of drilling in 2024, is not yet included in the Mineral Reserve and Mineral Resource estimates as the zone remains open at depth and to the east and further drilling is required to define the extent of the mineralization. Drilling will benefit from the completion of a new underground exploration drift expected to be completed in 2025.
Rainy River Life -of-Mine Highlights
The Rainy River Mineral Reserve, Mineral Resource, and Technical Report updates are the culmination of a comprehensive technical review, resulting in a 2% reduction in Mineral Reserves on top of mining depletion and providing a solid foundation for the life-of-mine plan. Open pit Mineral Reserves have decreased compared to year-end 2023, partly offset by increased Mineral Reserves in the planned Phase 5 pushback. The Phase 5 pit design has been optimized to reduce the strip ratio. No additional open pit mining equipment is required for mining Phase 5 and total capital waste stripping, for Phase 4 and Phase 5 combined, is estimated at $116 million . Underground Mineral Reserves increased to approximately 1.34 million ounces of gold, more than replacing depletion from underground mining, mostly through the expansion of underground mining zones. Gold Mineral Resources have increased by 76% compared to year-end 2023, driven by a significant expansion of the open pit resource pit shell. Technical studies are planned to evaluate these opportunities, with an objective to further extend the open pit mine life. The updated Rainy River life-of-mine plan maintains a strong gold production profile, averaging approximately 300,000 ounces per year over the next three years. Inclusion of Phase 5 for the first time extends open pit mining to 2028, defers processing of the low-grade stockpile, and keeps the mill at full capacity until the end of 2029, while providing a platform for further open pit extension. The total unit operating cost is expected to remain relatively flat at $27 to $34 per tonne over the next five years, increasing from 2030 when only higher-grade underground ore is processed. Underground unit mining costs are expected to reduce as the underground mine ramps up to a steady-state production rate of approximately 5,800 tonnes per day by 2027, and as development requirements taper off. In addition to the open pit conversion opportunities noted above, further potential exists to expand existing near-surface and underground zones and identify new targets. 2024 was the first major drilling campaign at Rainy River since 2017, and initial results are already providing promising results.
2025 to Highlight Increasing Production and Decreasing Costs Leading to Strong Free Cash Flow Generation
"In 2024, the Company reached a free cash flow inflection point and 2025 will continue to build on that. This year, we expect to see the value from the significant investments made in recent years on our growth projects through increased production, decreasing costs, and substantial free cash flow generation," added Mr. Godin.
Consolidated gold production is expected to increase by approximately 16% to 325,000 to 365,000 ounces in 2025, compared to 2024, driven by increasing production at Rainy River . Copper production is expected to be in-line with 2024 at 50 to 60 million pounds as the ramp-up in C-Zone throughput is offset by planned lower grades from both the exhaustion of the B3 cave and first draw bells from C-Zone. All-in sustaining costs (on a by-product basis) 1 are expected to decrease by $215 per ounce or 17% compared to the 2024 midpoint of guidance to between $1,025 to $1,125 per ounce in 2025, driven by higher production and lower operating costs from the New Afton C-Zone crusher and conveyor system and as the Rainy River Phase 4 strip ratio decreases. Total capital is expected to be $270 to $315 million , in-line with the 2024 guidance range, as New Afton C-Zone and Rainy River underground Main continue to ramp up and as development starts at the New Afton East Extension and Rainy River Phase 5 expansions.
Strong Free Cash Flow Yield Over Three-Year Period
"Our three-year outlook illustrates the significant margins our low-cost operations plan to achieve. Given the significant reduction in costs and expanding margins, at current commodity prices, New Gold is expected to generate significant cash flow over the next three years, translating to an impressive free cash flow yield through 2027," added Mr. Godin.
2026 and 2027 consolidated gold production is expected to be 55% higher (435,000 to 490,000 ounces) and 37% higher (375,000 to 445,000 ounces), respectively compared to 298,303 ounces in 2024 driven by increasing production profiles at both Rainy River and New Afton as growth projects are completed and ramped up in the near-term. Copper production continues to increase with 2027 copper production expected to be between 95 to 115 million pounds, approximately 94% higher than 2024 driven by increased grade and throughput from New Afton's C-Zone. All-in sustaining costs (on a by-product basis) 1 are expected to decrease by approximately 70% compared to the 2024 midpoint of guidance to between $400 and $500 per ounce driven by lower total cash costs, higher production from both operations, higher copper by-product and lower sustaining capital as the Rainy River Phase 5 expansion is completed in 2026. 2027 total capital is expected to be $70 to $95 million , decreasing significantly compared to 2024 as the New Afton C-Zone and East Extension infrastructure, Rainy River underground Main infrastructure and Rainy River Phase 5 expansion are completed. The higher production, lower costs, and lower capital spend over the 2025 to 2027 period are expected to drive increasing margins and generate significant free cash flow 2 for the Company.
Continuing to Prioritize Organic Growth Through Exploration
"With the free cash flow inflection point behind us and a clear corporate road map outlined in our updated technical reports, the Company remains focused on unlocking long-term value for our shareholders. Our 2025 exploration program is robust and will build on the successful results we released throughout 2024. At New Afton, there is a strong focus on advancing K-Zone, while continuing to explore for new copper-gold zones. At Rainy River , we are building on recent near-surface exploration successes, while continuing to target underground extension opportunities," added Mr. Godin.
Consolidated exploration budget is approximately $30 million for 2025, building on the successful 2024 exploration program. 2025 exploration efforts at New Afton will build on discoveries of 2024, specifically around K-Zone. The Company reported encouraging results in the spring and again in the fall of 2024, in the area now known as the Eastern Sector. 2025 exploration will continue to prioritize and advance these organic growth targets, focusing on mine life extension with minimal incremental capital spend. Development of a second exploration drift utilizing the C-Zone infrastructure at the 4500 Level will accelerate underground drilling and provide the ideal drill platforms to support and maximize exploration efforts. Rainy River exploration efforts will continue to focus on adding high-tonnage open pit material to maintain mill feed at full capacity beyond 2029. The inclusion of Phase 5 into Mineral Reserves last year and into the mine plan this year exemplifies our near-surface exploration success leading to mill feed extension. In addition, the Company is reviewing the viability of additional pushbacks to the open pit which could represent significant additions to the life-of-mine without requiring additional exploration drilling. The 2025 exploration program will also focus on enhancing the production profile by targeting high-grade underground growth. Following the successful conversion to reserves at the Intrepid Zone, an underground drilling platform is being developed to accelerate exploration and definition drilling, and is expected be in operation in the fourth quarter of 2025.
Consolidated Three-Year Operational Outlook
The Company has assumed $30.00 per silver ounce and $4.00 per copper pound, and a foreign exchange rate of $1.40 Canadian dollars to $1.00 US dollar in its outlook.
| Operational Estimates | 2025 Guidance | 2026 Guidance | 2027 Guidance | | Gold production (ounces) 2 | 325,000 – 365,000 | 435,000 – 490,000 | 375,000 – 445,000 | | New Afton gold production (ounces) 2 | 60,000 – 70,000 | 110,000 – 125,000 | 130,000 – 150,000 | | Rainy River gold production (ounces) 2 | 265,000 – 295,000 | 325,000 – 365,000 | 245,000 – 295,000 | | Copper production (M lbs) | 50 – 60 | 85 – 100 | 95 – 115 | | Cash costs per gold ounce sold (by-product) 1 | $600 - $700 | $200 - $300 | $125 - $225 | | All-in sustaining costs per gold ounce sold (by-product) 1 | $1,025 - $1,125 | $675 - $775 | $400 - $500 | | Capital Investment | 2025 Guidance | 2026 Guidance | 2027 Guidance | | Total capital ($M) | $270 - $315 | $200 - $240 | $70 - $95 | | Sustaining capital ($M) 1 | $95 - $110 | $140 - $160 | $40 - $55 | | Growth capital ($M) 1 | $175 - $205 | $60 - $80 | $30 - $40 |
2025 Consolidated Outlook
Gold production 2 is expected to be 325,000 to 365,000 ounces, approximately 16% higher than 2024 driven by increased production at Rainy River. Production is expected to strengthen in the second half of the year, with the first half of 2025 representing approximately 38% of annual production and the first quarter representing approximately 14%, as significant waste stripping at Rainy River is sequenced in the first quarter, and New Afton expedites exhaustion of the B3 cave. Copper production is expected to be between 50 to 60 million pounds, in-line with 2024 as the increased throughput from C-Zone at New Afton is offset by lower grades from the remaining life of the B3 cave. Copper production is expected to strengthen in the second half of the year, with the first half of 2025 representing approximately 43% of annual production and the first quarter representing approximately 20%
2025 total cash costs (on a by-product basis) 1 are expected to decrease by approximately 20% compared to the 2024 midpoint of guidance to between $600 and $700 per ounce driven by increased production from both operations. 2025 all-in sustaining costs (on a by-product basis) 1 are expected to decrease by approximately 17% compared to the 2024 midpoint of guidance to between $1,025 and $1,125 per ounce driven by lower total cash costs and higher production from both operations. Total cash costs (on a by-product basis) 1 and all-in sustaining costs (on a by-product basis) 1 are expected to decrease quarter-over-quarter throughout 2025 due to increasing production and a lower strip ratio at Rainy River in the second half of 2025.
Total capital is expected to be $270 to $315 million , of which, sustaining capital 1 is expected to be $95 to $110 million , and growth capital 1 is expected to be $175 to $205 million .
Sustaining capital 1 is expected to be approximately $15 million or 13% lower than the 2024 midpoint of guidance. The sustaining capital 1 spend primarily relates to capital stripping activities at Rainy River and tailings dam raises and maintenance. As previously disclosed, 2024 sustaining capital is expected to be $20 million lower than the low end of the guidance range and included lower capitalized stripping at Rainy River . 2025 sustaining capital includes approximately $40 million in Phase 4 capital stripping due to the focus on waste stripping in the first quarter at Rainy River (and the resulting capitalization of mining costs) and approximately $10 million related to the Phase 5 expansion. Sustaining capital 1 is expected to trend lower through the second half of the year, as Phase 4 stripping activities at Rainy River are completed. The first half of 2025 is expected to represent approximately 75% of the sustaining capital spend.
Growth capital 1 at New Afton relates to completing the C-Zone development and starting East Extension development and at Rainy River relates to advancing underground development at the Intrepid and underground Main zones. The first half of 2025 is expected to represent approximately 55% of the growth capital spend.
New Afton Operational Outlook
2025 New Afton Outlook
| Operational Estimates | 2025 Guidance | | Gold production (ounces) 2,3 | 60,000 – 70,000 | | Copper production (Mlbs) | 50 - 60 | | Cash costs per gold ounce sold (by-product) 1 | ($675) – ($575) | | Cash costs per gold ounce sold (co-product) 1 | $725 - $825 | | Cash costs per copper pound sold (co-product) 1 | $2.00 - $2.50 | | All-in sustaining costs per gold ounce sold (by-product) 1 | ($625) – ($525) | | All-in sustaining costs per gold ounce sold (co-product) 1 | $775 - $875 | | All-in sustaining costs per copper pound sold (co-product) 1 | $2.00 - $2.50 | | Capital Investment | 2025 Guidance | | Total capital ($M) | $115 - $135 | | Sustaining capital ($M) 1 | $5 - $10 | | Growth capital ($M) 1 | $110 - $125 |
Gold production 2,3 is expected to be 60,000 to 70,000 ounces, in-line with 2024 (excluding gold produced from ore purchase agreements). Copper production is expected to be 50 to 60 million pounds, in-line with 2024. Higher throughput from C-Zone is offset by lower grades as the B3 cave is exhausted during the first half of 2025. C-Zone is expected to average approximately 8,300 tonnes per day in 2025 and remains on-track to reach the throughput rate of 16,000 tonnes per day in 2026. Production is expected to significantly strengthen in the second half of the year as the B3 cave is exhausted and C-Zone continues its ramp-up. The first half of 2025 is expected to represent approximately 45% of the annual gold and copper production, with the first quarter expected to represent approximately 20%.
Total cash costs (on a by-product basis) 1 are expected to decrease compared to the 2024 midpoint of guidance to between ($675) and ($575) per ounce due to C-Zone production increasing at lower mining costs and as a result of the elimination of truck haulage from the B3 cave. All-in sustaining costs (on a by-product basis) 1 are expected to decrease compared to the 2024 midpoint of guidance to between ($625) and ($525) per ounce due to lower total cash costs, higher production and lower sustaining capital. Total cash costs 1 and all-in sustaining costs 1 are expected to decrease on a quarterly basis throughout 2025 as throughput increases as C-Zone continues to ramp up.
Total capital is expected to be $115 to $135 million . Sustaining capital 1 is expected to be $5 to $10 million , including approximately $5 million related to tailings management and $5 million related to equipment. Growth capital 1 is expected to be $110 to $125 million related to the completion of the C-Zone project and starting the East Extension expansion. East Extension capital is expected to be $10 to $20 million . C-Zone project capital is primarily focused on mine development and other infrastructure installation, and continued progress on stabilization and includes $15 million of carry over from 2024. East Extension capital is primarily related to mine development and equipment purchases. Growth capital is expected to be generally consistent throughout the year, with C-zone spend the focus of the first half and East Extension the second half.
The exhaustion of B3 earlier in the year and the continued ramp-up of mining at C-Zone through the year position New Afton to generate increasing free cash flow quarter over quarter through 2025.
2025 New Afton Exploration Outlook
2025 exploration expenditures at New Afton are expected to be approximately $17 million . New Afton is continuing to advance its organic growth strategy focusing on new mining zones that have the potential to extend mine life with minimal capital investment. There is a strong focus on K-Zone in 2025, where the Company is strengthening its position to delineate the zone's high-grade core and grow its overall footprint. 2025 K -Zone drilling will benefit from the development of a 700-metre exploration drift located at the 4500 level. The new drift will accelerate underground exploration drilling and provide ideal drill platforms for delineation. Drift development has commenced, and the first exploration drill bay is expected to be operational in the second quarter of 2025, with full completion scheduled for the third quarter.