Press release from CNW Group
New Gold Achieves Targeted Throughput Increase at New Afton Ahead of Schedule
Monday, October 21, 2013
New Gold Achieves Targeted Throughput Increase at New Afton Ahead of Schedule16:10 EDT Monday, October 21, 2013
Provides Preliminary Third Quarter Production and Cost Results
(All figures are in US dollars unless otherwise indicated)
VANCOUVER, Oct. 21, 2013 /CNW/ - New Gold Inc. ("New Gold") (TSX:NGD) (NYSE MKT:NGD) today announces that its New Afton Mine has successfully achieved the targeted increase in throughput to 12,000 tonnes per day, from a design capacity of 11,000 tonnes per day, three months ahead of schedule. The combination of the increased throughput, and higher grades and recoveries, resulted in increased production of both gold and copper during the third quarter at New Afton. As the company is hosting an analyst tour to New Afton on October 22, 2013, New Gold today provides preliminary third quarter production and cost results for New Afton as well as the balance of its portfolio of operating mines. The preliminary production and cost information provided reflects approximate figures and may differ slightly from the company's third quarter earnings, which will be announced on October 29, 2013.
New Afton Update
- Average mill throughput of 12,396 tonnes per day in September 2013
- Represents 13% increase over 11,000 tonne per day design capacity
- Average mill throughput of 11,967 tonnes per day during third quarter of 2013
- Gold grade continued to reconcile positively against block model
- 80% increase in gold production to 25,220 ounces from 14,014 ounces in the third quarter of 2012
- 88% increase in copper production to 20.9 million pounds from 11.1 million pounds
- Operation successfully tested over five-day period at rates of 14,000 to 15,500 tonnes per day
- Continued positive exploration results at both the C-Zone and East Cave Extension targets
Consolidated 2013 Third Quarter Production and Cost Summary
- Lowest cost quarter in the company's history
- All-in sustaining costs(1) of $779 per ounce
- Total cash costs(2) of $280 per ounce compared to $443 per ounce in the prior year period
- Gold production of 94,038 ounces compared to 104,577 ounces in the third quarter of 2012
- Copper production increased by 67% to 23.7 million pounds from 14.2 million pounds
- Cash and cash equivalents of $429 million at September 30, 2013
"The third quarter saw our company deliver on a number of very important objectives, however, it also brought with it certain challenges," stated Randall Oliphant, Executive Chairman. "The combination of successfully increasing New Afton's throughput and further reducing our costs positions us well going forward. At the same time, we are disappointed that the operational challenges we encountered at Cerro San Pedro and Mesquite have negatively impacted our quarterly and year-to-date production."
New Gold will provide an update on its production and cost outlook for the fourth quarter and full year 2013 as part of its third quarter earnings announcement on October 29, 2013.
New Afton Update
Successfully Achieved Targeted Throughput Increase Ahead of Schedule
New Afton continued to build on its strong first half performance during the quarter. New Afton achieved records in multiple key operational categories during the quarter, including: average daily throughput, gold and copper grades, gold recovery and, most importantly, gold and copper production. At the beginning of 2013, New Gold's objective was to steadily increase the throughput at New Afton beyond the 11,000 tonne per day design capacity, with the goal of averaging 12,000 tonnes per day by the end of the year. Through the dedicated efforts of the New Afton team, the mine reached this goal three months ahead of schedule, averaging 12,396 tonnes per day during the month of September. The combination of this record throughput, robust gold and copper grades, and steady recoveries resulted in continued increases in production of both gold and copper at New Afton. Gold grades were 0.82 grams per tonne, up from 0.67 grams per tonne in the prior year quarter and 0.78 grams per tonne in the second quarter of 2013. Copper grades were 0.98% compared to 0.72% in the prior year quarter and 0.96% in the second quarter of 2013. Recoveries were 87% for gold and 88% for copper, significantly higher than the third quarter of 2012 and consistent with the second quarter of 2013, despite the impact of the higher throughput. New Afton produced 25,220 ounces of gold and 20.9 million pounds of copper during the third quarter of 2013. With year-to-date production of 61,966 ounces of gold and 51.4 million pounds of copper, New Afton remains well on track to achieve its full year 2013 production estimates of 75,000 to 85,000 ounces of gold and 66 to 74 million pounds of copper.
Looking to Unlock Further Value with Additional Throughput Expansion Opportunity
In parallel with reaching the interim target of the 12,000 tonne per day throughput rate, the New Afton team has also been looking at opportunities to further increase the value of the operation by driving towards an even higher throughput level. During the third quarter, over a five-day period, the operation was run at rates between 14,000 and 15,500 tonnes per day to better assess which elements of the mining and milling processes could be further optimized at these higher levels. The underground mining operations performed well at the higher rates and demonstrated an ability to readily move well beyond 12,000 tonnes of ore to surface daily. The combination of 77 completed drawbells and the excess capacity of the crusher and conveyor system provides flexibility for the underground operations to move to a sustainably higher rate. The mill also handled the higher throughput levels, however, as anticipated, grind size increased and a decrease in recovery was seen as the mill moved to progressively higher rates. Currently, the company is evaluating low capital cost alternatives that should enable the mine to yield recoveries from the high 80% to low 90% rate, depending on ore type, when operating at higher throughput levels. Though the trade-offs are still in the process of being considered, this could include the addition of a tower mill for tertiary grinding at the back end of the grinding circuit as well as some additional flotation capacity.
As New Afton generated over 60% of New Gold's earnings from mine operations in the second quarter of 2013, the company believes that looking at low incremental capital cost alternatives to increase the annual production of gold and copper, thus further increasing near-term cash flow, is one of the most compelling strategies to generate value for the benefit of New Gold's shareholders.
After achieving the 12,000 tonne per day target ahead of schedule, New Gold's goal is to now move New Afton toward a sustainable 14,000 tonne per day operation. The company intends to provide a further update on the timeline and estimated capital cost to achieve this objective as part of its annual investor and analyst day in early 2014.
Focused on the Future with Ongoing Exploration
The company's exploration efforts at New Afton continue to focus on two key areas, the East Cave Extension and the C-Zone. The East Cave Extension is an area of mineralization that extends laterally from the main B-Zone reserve and lies beneath the previously mined Afton open pit. In the second half of 2012, the company successfully delineated additional resources in this area to extend New Afton's mine life. In 2013, New Gold's exploration team completed an additional 58 holes totaling 17,775 metres in this area with the goal of, once again, adding to the mineral reserve base. The results of the East Cave drilling program will be incorporated into an updated mineral resource and reserve estimate scheduled for completion at year-end.
The C-Zone resource, which represents the second area of exploration focus, lies immediately down plunge of the main B-Zone reserve currently being mined. The C-Zone mineral resource, summarized below, was last updated on May 1, 2013 and incorporated the results of the 2012 drill program and five holes completed in early 2013.
|New Afton C-Zone Mineral Resource Estimate|
|May 2013 Mineral Resource|
Total Measured & Indicated
The 2013 C-Zone exploration program concluded in the third quarter, with 41 holes totaling 26,800 metres having been completed. Highlights of the 2013 C-Zone exploration program post the May resource update are shown below:
|New Afton 2013 C-Zone Highlights|
Note: All of the C-Zone assay results are available under the company's profile on SEDAR at www.sedar.com as an Appendix to this news release as filed on SEDAR.
The 2013 New Afton drilling program has significantly increased the amount of drill hole data supporting the C-Zone mineral resource, both extending its limits and adding confidence to the distribution of metal grades and classification of the resource.
With the benefit of the completion of an updated C-Zone mineral resource estimate at year-end, the company plans to provide an update on how the C-Zone may factor into New Afton's longer-term mine plan at its annual investor and analyst day to be held in early 2014.
Preliminary Production and Cost Results
|New Gold 2013 Third Quarter Summary Operational Results|
|Three months ended||Nine months ended|
|September 30,||September 30,|
|Gold Production (thousand ounces)|
|Cerro San Pedro||24.0||34.5||80.6||105.4|
|Total Gold Production||94.0||104.6||291.2||299.0|
|Total Gold Sales||94.1||95.2||287.3||285.8|
|Average realized gold price ($ per ounce)||$1,359||$1,560||$1,375||$1,540|
|Silver Production (thousand ounces)|
|Cerro San Pedro||219.4||488.3||1,003.1||1,537.2|
|Total Silver Sales||223.7||492.3||997.2||1,506.1|
|Average realized silver price ($ per ounce)||$21.31||$30.09||$24.59||$30.32|
|Copper Production (million pounds)|
|Total Copper Production||23.7||14.2||61.4||21.9|
|Total Copper Sales||23.5||9.2||58.8||15.9|
|Average realized copper price ($ per pound)||$3.25||$3.69||$3.24||$3.60|
|Total Cash Costs(2) ($ per ounce)|
|Cerro San Pedro||723||218||605||205|
|Total Cash Costs(2)||$280||$443||$399||$486|
|All-in Sustaining Costs(1) ($ per ounce)|
|Cerro San Pedro||771||273||674||338|
|All-in Sustaining Costs(1)||$779||$869||$905||$830|
New Afton - As previously noted, New Afton's third quarter gold production increased by 80% when compared to the same period of the prior year. The combination of higher daily throughput, higher gold grades, which continue to reconcile favourably to the company's plans, and higher gold recoveries led to the strong production. Collectively, these positive factors culminated in New Afton's 2013 third quarter also delivering continued quarter-over-quarter improvement, with production increasing by 16% over the second quarter of 2013. The third quarter was the highest gold production quarter for New Afton since it commenced production in mid-2012.
Cerro San Pedro - Production at Cerro San Pedro was below that of the prior year periods due to a combination of lower ore tonnes placed on the leach pad and lower recoveries. The placement of lower ore tonnes was primarily driven by the impact of the previously announced pit wall movement. As noted in New Gold's August 28, 2013 news release regarding the pit wall movement, the company anticipated approximately 15,000 ounces of Cerro San Pedro's 2013 gold production would be deferred to future periods if the area immediately below the wedge of displaced material could not be accessed during the current phase of mining. The area impacted by the pit wall movement is now planned to be mined during the next phase of mining in 2014 and 2015.
As part of the same August news release, the company indicated that recoveries from the leach pad had been below expectations. The continuation of these lower recoveries also contributed to the lower production in the third quarter. Over the course of the quarter, the metallurgical team adjusted the leach solution by increasing cyanide and sodium hydroxide levels as well as adding more lime to the ore trucks. The goal of these adjustments is to optimize the leach solution in an effort to maximize the recoveries from the multiple ore types at Cerro San Pedro over time. At the same time, as a result of the above noted pit wall movement, the company had to shift its mining efforts further towards the bottom of the open pit, where the ore is more sulphidic and thus has lower recoveries, earlier than planned. Mining is scheduled to remain in this lower area through early 2014 after which the next phase of mining will move back to the top of the ore body where the material is more oxidized and should have recoveries more consistent with historical levels.
As previously disclosed, the combination of the pit wall movement and lower recoveries will result in Cerro San Pedro's 2013 gold production being below the previous expectation of 140,000 to 150,000 ounces.
Mesquite - Mesquite's production in both the three and nine month periods ended September 30, 2013 was below that of the prior year periods primarily due to mining of ore below both reserve grade and grades mined in the first nine months of 2012. The planned mining of lower grade ore was further impacted by a negative variance between realized and planned grades in the area of the pit that was mined during the third quarter. Per the mine plan, mining has since moved to a different area of the mine. As noted in the company's second quarter earnings results, due to the lower year-to-date production, Mesquite's 2013 gold production outlook will be below its guidance range of 130,000 to 140,000 ounces. Mesquite is, however, still expected to have its strongest quarter of the year in the fourth quarter.
Peak Mines - Gold production at the Peak Mines was in line with the prior year quarter. For the nine month period ended September 30, 2013, all of the key production drivers, tonnes processed, gold grades and recoveries increased, resulting in a 15% increase in gold production when compared to the same period of the prior year. With its strong year-to-date performance, Peak Mines' full year gold production target remains in line with the original guidance range of 95,000 to 105,000 ounces.
Copper production increased by 67% when compared to the third quarter of 2012, driven by New Afton's strong contribution. The continued throughput increases at New Afton, coupled with higher grades and steady recoveries, led to a 12% increase in copper production compared to the second quarter of 2013. At the Peak Mines, copper production was consistent with the prior year periods as increased tonnes processed largely offset the planned mining of lower copper grades. 2013 full year copper production remains in line with the company's guidance of 78 to 88 million pounds.
Silver production in both the three and nine month periods ended September 30, 2013 was below that of the prior year periods for reasons consistent with those noted above regarding Cerro San Pedro's gold production.
All-in Sustaining Costs(1) and Total Cash Costs(2)
On a consolidated basis, during the third quarter, both the all-in sustaining costs(1) and total cash costs(2) were the lowest in New Gold's history. All-in sustaining costs(1), which was formally adopted as the new industry cost standard earlier this year, decreased by $90 per ounce compared to the prior year quarter and $152 per ounce when compared to the second quarter of 2013. Total cash costs(2) decreased by $163 per ounce compared to the prior year quarter and $150 per ounce compared to the second quarter of 2013. The decreases in both cost measures were attributable to the significant contribution of the low cost New Afton Mine and the company's dedicated focus on maintaining its position as one of the industry's lowest cost producers.
New Afton - Costs decreased when compared to the third quarter of 2012 as a result of the mine's strong operating performance. The increase in copper production at New Afton more than offset the decrease in the average realized copper price when compared to the third quarter of the prior year. New Afton's robust copper revenue positions the operation well to continue being a high margin contributor to New Gold's portfolio going forward.
Cerro San Pedro - The increase in cash costs when compared to the prior periods is attributable to a combination of lower silver by-product revenue and the fixed portion of the operation's costs being attributed to a lower gold production base. Cerro San Pedro generated $10 million, or approximately $205 per ounce, less silver by-product revenue when compared to the third quarter of the prior year due to a combination of lower silver by-product sales volumes and lower average realized silver prices. Cerro San Pedro's all-in sustaining costs(1) of $771 per ounce continue to be well below the industry average.
Mesquite - Costs at Mesquite were higher than the prior year periods due to mining of lower grade ore, resulting in a lower production base. The impact of the lower production was partially offset by a decrease in the mine's gross operating costs during both the three and nine month periods ended September 30, 2013. Mesquite's all-in sustaining costs(1) decreased by $272 per ounce when compared to the second quarter of 2013.
Peak Mines - The change in total cash costs(2) at the Peak Mines during the quarter and year-to-date period was attributable to a combination of lower copper by-product revenue and increased mining costs from mining deeper portions of the Peak ore bodies. This was partially offset by the depreciation of the Australian dollar and the higher gold production base. As anticipated, total cash costs(2) decreased by $92 per ounce and all-in sustaining costs(1) decreased by $170 per ounce when compared to the second quarter of 2013.
Consistent with the World Gold Council's all-in sustaining costs(1) guidance announced on June 27, 2013, New Gold will report this new cost metric going forward. This new non-GAAP measure is intended to provide further transparency into costs associated with producing gold. For a period of time, New Gold will also continue to show its total cash costs(2) for purposes of comparability to the company's prior year periods.
New Gold's third quarter all-in sustaining costs(1) were $779 per ounce, demonstrating a steady and meaningful decrease from $1,004 per ounce in the first quarter of 2013 and $931 per ounce in the second quarter. The company continues to further establish itself as one of the lowest cost producers in the industry.
"Two of our four operations, Peak Mines and particularly New Afton, had strong quarters, while Cerro San Pedro and Mesquite faced challenges," stated Robert Gallagher, President and Chief Executive Officer. "We are very focused on improving the performance of our two open pit mines, while also ensuring New Afton and Peak Mines finish the year strongly."
At September 30, 2013, the key components of New Gold's consolidated statements of financial position included $429 million in cash and cash equivalents and $860 million in long-term debt. The components of the long-term debt are: $300 million of 7.00% face value senior unsecured notes due in April 2020, $500 million of 6.25% face value senior unsecured notes due in November 2022 and $76 million in El Morro funding loans, repayable out of a portion of New Gold's share of El Morro cash flow upon the start of production.
Webcast and Conference Call
New Gold plans to announce its third quarter financial results, including an update on its 2013 outlook, prior to the market opening on Tuesday, October 29, 2013. A webcast and conference call will be held on October 29th at 9:00 a.m. Eastern Time to discuss the results. Participants may listen to the webcast by registering on our website at www.newgold.com. You may also listen to the conference by calling toll-free 1-888-231-8191 or 1-647-427-7450 outside of Canada and the U.S. To listen to a recorded playback of the call after the event, please call toll-free 1-855-859-2056 or 1-416-849-0833 outside of Canada and the U.S. - Passcode 87299582. An archived webcast will also be available at www.newgold.com following the event.
About New Gold Inc.
New Gold is an intermediate gold mining company. The company has a portfolio of four producing assets and three significant development projects. The New Afton Mine in Canada, the Cerro San Pedro Mine in Mexico, the Mesquite Mine in the United States and the Peak Mines in Australia provide the company with its current production base. In addition, New Gold owns 100% of the Blackwater and Rainy River projects, both in Canada, as well as 30% of the El Morro project located in Chile. New Gold's objective is to continue to establish itself as a leading intermediate producer, focused on the environment and sustainability. For further information on the company, please visit www.newgold.com.
Cautionary Note Regarding Forward-Looking Statements
Certain information contained in this news release, including any information relating to New Gold Inc.'s ("New Gold) future financial or operating performance as well as information respecting its assets, may be deemed "forward looking". All statements in this news release, other than statements of historical fact that address events 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", "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. Without limiting the foregoing, examples of forward-looking information in this news release include, among others, statements with respect to: New Gold's guidance for production, planned modifications to operations (and the cost of any such modifications) and potential opportunities to increase recovery rates, throughput rates and value, the expected impact on recoveries of adjustments to the leach solution at Cerro San Pedro, the estimation of mineral reserves and resources and the realization of mineral reserves and resources (including grades), expected future mining activities, grades and recovery rates and the timing and amount of estimated future production (including mining and milling rates), the expected life of New Gold's mines,, exploration potential and the result of future exploration activities.
All such forward-looking statements are based on the reasonable 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. Forward-looking statements are necessarily based on estimates and assumptions. In addition to assumptions specifically identified in this news release, the key assumptions and estimates are discussed in New Gold's most recent interim management discussion and analysis and technical reports filed at www.sedar.com. The estimates and assumptions upon which the forward-looking statements in this news release are based 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; price volatility in the spot and forward markets for 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 Reserves and Resources and between actual and estimated metallurgical recoveries; changes in national and local legislation or regulation, or political or economic developments, in Canada, the United States, Australia and Mexico; the speculative nature of mineral exploration and development, including the risks of obtaining and maintaining the validity and enforceability of the necessary licences and permits and complying with the permitting requirements of each jurisdiction in which New Gold operates, including, but not limited to in Mexico, where Cerro San Pedro has a history of ongoing legal challenges related to New Gold's environmental authorization (EIS);; 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; diminishing quantities or grades of Reserves; loss of key employees; additional funding requirements; rising costs of labour, supplies, fuel and equipment; actual results of current exploration or reclamation activities; uncertainties inherent to mining economic studies; changes in parameters as plans continue to be refined; accidents; labour disputes; defective title to mineral claims or property or contests over claims to mineral properties; and unexpected delays and costs inherent to consulting and accommodating rights of First Nations. 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 the risk of inadequate insurance or inability to obtain insurance to cover these risks) as well as "Risk Factors" included in New Gold's (and, in respect to information related to the acquisition of Rainy River and/or the Rainy River Gold Project, in Rainy River'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 Measured, Indicated and Inferred 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 news release are Canadian mining terms as defined in accordance with National Instrument 43-101 ("NI 43-101") under guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") Standards on Mineral Resources and Mineral Reserves adopted by the CIM Council on November 27, 2010. 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. 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 calculation is made. As such, certain information contained in this news release concerning descriptions of mineralization and 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. It cannot be assumed that all or any part of an "Inferred Mineral Resource" will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies. Readers are cautioned not to assume that all or any part of Measured or Indicated Resources will ever be converted into Mineral Reserves. Readers are also cautioned not to assume that all or any part of an "Inferred Mineral Resource" exists, or is economically or legally mineable. 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.
The scientific and technical information in this news release has been reviewed and approved by Mark Petersen, a Qualified Person under National Instrument 43-101 and officer of New Gold. For additional information regarding such scientific and technical information, refer to New Gold's annual information form dated March 27, 2013, as well as the company's press release entitled "New Gold Announces 2013 First Quarter Results - Increases Gold and Copper Resources at New Afton C-Zone by Over 300 Percent" dated May 1, 2013.
All New Gold exploration drill hole samples are analyzed by independent analytical laboratories. Gold and copper analyses for the New Afton exploration project are done via fire assay with AA finish for gold and induction coupled plasma spectrophotometry for copper. The company maintains a strict Quality Assurance / Quality Control ("QA/QC") program using industry best practices that are consistent with the QA/QC protocols in use at all of its exploration and development projects. Key elements of New Gold's QA/QC program include verifiable chain of custody of samples, regular insertion of certified reference standards and blanks, and duplicate check and independent umpire assays. Industry standard 63.5 millimetre diameter diamond drill core is sampled at regular 2 metre intervals, halved and shipped in sealed bags to Activation Laboratories in Kamloops, British Columbia. Independent umpire check analyses are completed by SGS Laboratories, Vancouver, British Columbia.
(1) ALL-IN SUSTAINING COSTS
Consistent with the guidance announced earlier in 2013 from 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" as the sum of total cash costs, sustaining capital expenditures, corporate general & administrative costs, capitalized and expensed exploration that is sustaining in nature and environmental reclamation costs. New Gold believes this non-GAAP measure 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. All-in sustaining costs constitute a non-GAAP measure and are intended to provide additional information only and do not have any standardized meaning under IFRS. They should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Other companies may calculate these measures differently. A reconciliation to the nearest IFRS measure will be provided in the MD&A accompanying the quarterly financial statements.
(2) TOTAL CASH COSTS
"Total cash costs" per ounce figures are non-GAAP measures which are calculated in accordance with a standard developed by The Gold Institute, which was a worldwide association of suppliers of gold and gold products and included leading North American gold producers. The Gold Institute ceased operations in 2002, but the standard is widely accepted as the standard of reporting cash costs of production in North America. 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. Total cash costs include mine site operating costs such as mining, processing, administration, royalties and production taxes, but are exclusive of amortization, reclamation, capital and exploration costs. Total cash costs are reduced by any by-product revenue and is then divided by ounces sold to arrive at the total by-product cash cost of sales. The measure, along with sales, is considered to be a key indicator of a company's ability to generate operating earnings and cash flow from its mining operations. This data is furnished to provide additional information and is a non-IFRS measure. Total 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 as a substitute for measures of performance prepared in accordance with IFRS and is not necessarily indicative of operating costs presented under IFRS. A reconciliation to the nearest IFRS measure will be provided in the MD&A accompanying the quarterly financial statements.
SOURCE: New Gold Inc.
For further information:
Vice President, Corporate Development
Direct: +1 (416) 324-6014