Exhibit
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Description
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NEW GOLD INC.
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By:
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/s/ Sean Keating |
Date: July 14, 2020
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Sean Keating
Vice President, General Counsel and Corporate Secretary
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Total production for the second quarter was 98,079 gold equivalent (gold eq.) ounces (64,294 ounces of gold, 134,282 ounces of silver and 16.9 million pounds of copper).
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The Rainy River Mine produced 49,633 gold eq. ounces (48,800 ounces of gold and 70,394 ounces of silver) for the quarter. Following a 12-day voluntary shutdown related to COVID-19 in the first quarter,
operations resumed on April 3.
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The New Afton Mine produced 48,446 gold eq. ounces (15,494 ounces of gold and 16.9 million pounds of copper) for the quarter.
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During the quarter, the Company announced that it entered into a definitive agreement with Artemis Gold Inc. to divest its Blackwater Project for C$190 million in cash, an 8% gold stream and a C$20 million equity stake in Artemis (refer to the Company's June 9, 2020 news release for further information).
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During the quarter, the Company completed a $400 million senior notes offering yielding 7.50% due in 2027 that was used, along with cash on hand, to fund the full redemption of its outstanding 6.25% senior
notes due in 2022 completed on July 10, 2020 (refer to the Company's June 24, 2020 and July 10, 2020 news releases for further information).
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On April 15, 2020 annual guidance was withdrawn until the Company could better understand the impact of COVID-19. Updated annual guidance is expected to be released along with the Company's second quarter
financial results on July 30, 2020.
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Q2 2020
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H1 2020
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Gold eq. production (ounces)1
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98,079
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201,514
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Gold production (ounces)
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64,294
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131,084
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Copper production (Mlbs)
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16.9
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35.4
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Average realized gold price, per ounce2
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1,516
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1,485
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Average realized copper price, per pound2
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2.55
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2.56
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1. Total gold equivalent ounces include silver and copper produced (excluding production from the Cerro San Pedro Mine) converted to a gold equivalent based on a ratio of $1,500 per gold ounce, $17.75 per silver
ounce and $2.85 per copper pound. Throughout the year the Company will report gold equivalent ounces using a constant ratio of those prices. All copper is produced by the New Afton Mine.
2. Refer to the “Non-GAAP Financial Performance Measures" section of this press release. |
Rainy River Mine
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Q2 2020
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H1 2020
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Gold eq. production (ounces)1
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49,633
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100,739
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Gold eq. sold (ounces)
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47,873
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101,411
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Gold production (ounces)
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48,800
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99,181
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Gold sold (ounces)
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47,064
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99,846
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Average realized gold price, per ounce2
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1,514
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1,483
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1. Gold equivalent ounces for Rainy River in Q2 2020 includes 70,394 ounces of silver converted to a gold equivalent based on a ratio of $1,500 per gold ounce and $17.75 per silver ounce.
2. Refer to the “Non-GAAP Financial Performance Measures" section of this press release.
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Rainy River Mine
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FY 2018
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Q1 19
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Q2 19
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Q3 19
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Q4 19
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Q1 2020
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Q2 2020
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Tonnes mined per day (ore and waste)
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108,392
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111,679
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114,544
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111,078
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136,124
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127,684
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126,512
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Ore tonnes mined per day
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33,687
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15,739
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21,368
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18,220
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19,485
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26,012
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23,101
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Operating waste tonnes per day
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47,128
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62,955
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82,488
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75,206
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74,020
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75,596
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72,575
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Capitalized waste tonnes per day
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25,576
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32,986
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10,688
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17,652
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42,619
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26,077
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30,836
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Total waste tonnes per day
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74,705
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95,941
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93,176
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92,858
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116,639
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101,673
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103,411
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Strip ratio (waste: ore)
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2.22
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6.10
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4.36
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5.10
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5.99
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3.91
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4.48
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Tonnes milled per calendar day
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17,934
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19,725
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21,117
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24,500
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22,521
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18,441
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23,880
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Gold grade milled (g/t)
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1.25
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1.19
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1.15
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1.14
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0.85
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1.03
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0.78
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Gold recovery (%)
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86
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90
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93
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91
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91
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90
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89
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Mill availability (%)
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77
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89
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88
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88
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89
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91
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90
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Gold production (oz)
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227,284
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61,557
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66,013
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75,080
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51,122
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50,381
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48,800
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Gold eq. production1 (oz)
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230,349
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62,278
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66,765
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76,092
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51,915
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51,106
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49,633
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1. Gold equivalent ounces for Rainy River in Q2 2020 includes 70,394 ounces of silver converted to a gold equivalent based on a ratio of $1,500 per gold ounce and $17.75 per silver ounce.
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The Rainy River mine resumed operations on April 3, following a temporary two-week shutdown that allowed the workforce to follow a 14-day period of self-isolation
relating to travel outside of Canada related to COVID-19. Following the recent approval by Health Canada, three rapid testing devices were procured and will be rolled out for use in July and August, with the third device exclusively for
community use. These devices will initially test for the virus and provide results within three hours of testing, adding another level of protection against the transmission of COVID-19 as we continue to prioritize the safety and
well-being of our employees and our local and Indigenous communities.
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Early in the second quarter, the mine utilized its local workforce and gradually began to safely reintroduce a portion of the non-local workforce to advance the
ramp-up of operations. During the quarter, the open pit averaged approximately 125,000 tonnes per day. Mining productivity increased during the quarter from approximately 100,000 tonnes per day in early April to approximately 140,000
tonnes per day in June, achieving pre-suspension productivity levels. Most of the non-local workforce has now been reintegrated and it is expected that the mine will complete the ramp-up to full capacity early in the third quarter.
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For the second quarter, gold eq. production was 49,633 ounces (48,800 ounces of gold and 70,394 ounces of silver), which was lower than plan. Production was
impacted by reduced mine productivity as described above, resulting in the processing of a higher than planned proportion of the medium grade ore from stockpile and pit rehandling. The averaged grade processed for the quarter was 0.78
grams per tonne at gold recovery of 89%.
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During the quarter, approximately 2.1 million ore tonnes and 9.4 million waste tonnes (including 2.8 million capitalized waste tonnes) were mined from the open
pit at an average strip ratio of 4.48:1.
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Since the April 3 restart, the mill has ramped up to full capacity, achieving an average run rate of approximately 24,700 tonnes per day, including downtime
during the quarter, primarily to complete a liner change as well as other maintenance related to the SAG mill. Mill availability for the quarter averaged 90%, in line with plan.
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During the quarter, key capital projects were advanced including a planned tailings dam raise, wick drain installation for stabilization of the east waste dump, final stage
construction of the maintenance and warehouse facilities, as well as the commissioning of a bio-chemical reactor (BCR2) to allow clean water discharge. It is expected that all key construction projects will be substantially completed by
the end of the third quarter with all planned capital projects expected to be completed by year end. A small portion of the Tailings Management Area (TMA) construction that was originally scheduled for completion in 2021 is now planned
for completion in 2020, thereby reducing planned capital requirements for 2021.
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New Afton Mine
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Q2 2020
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H1 2020
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Gold eq. production (ounces) 1
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48,446
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100,775
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Gold eq. sold (ounces)
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43,517
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93,915
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Gold production (ounces)
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15,494
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31,903
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Gold sold (ounces)
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13,789
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29,780
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Copper production (Mlbs)
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16.9
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35.4
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Copper sold (Mlbs)
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15.3
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33.0
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Average realized gold price, per ounce2
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1,520
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1,490
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Average realized copper price, per pound2
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2.55
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2.56
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1. Gold equivalent ounces for New Afton in Q2 2020 includes 16.9 million pounds of copper and 63,889 ounces of silver converted to a gold equivalent based on a ratio of $1,500 per gold ounce, $2.85 per copper
pound and $17.75 per silver ounce.
2. Refer to the “Non-GAAP Financial Performance Measures" section of this press release.
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New Afton Mine
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FY 2018
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Q1 19
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Q2 19
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Q3 19
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Q4 19
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Q1 2020
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Q2 2020
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Tonnes mined per day (ore and waste)
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16,156
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15,824
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16,357
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15,773
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14,539
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16,727
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15,358
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Tonnes milled per calendar day
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14,668
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14,759
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14,992
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15,572
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15,861
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15,377
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14,240
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Gold grade milled (g/t)
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0.53
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0.50
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0.53
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0.43
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0.42
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0.45
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0.46
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Gold recovery (%)
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85
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83
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83
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80
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79
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81
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81
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Gold production (oz)
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77,329
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17,841
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19,203
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16,007
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15,734
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16,409
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15,494
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Copper grade milled (%)
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0.87
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0.80
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0.86
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0.76
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0.70
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0.73
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0.72
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Copper recovery (%)
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83
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83
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83
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84
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81
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82
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83
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Copper production (Mlbs)
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85.1
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19.5
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21.6
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20.1
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18.3
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18.5
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16.9
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Mill availability (%)
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98
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98
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97
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96
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98
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98
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92
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Gold eq. production1 (oz)
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279,755
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60,986
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65,791
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52,807
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49,507
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52,329
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48,446
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1. Gold equivalent ounces for New Afton in Q2 2020 includes 16.9 million pounds of copper and 63,889 ounces of silver converted to a gold equivalent based on a ratio of $1,500 per gold ounce, $2.85 per copper
pound and $17.75 per silver ounce.
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The New Afton Mine reached a significant safety milestone, achieving 3 million person-hours lost-time injury-free.
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The mine produced 48,446 gold eq. ounces for the quarter (15,494 ounces of gold, and 16.9 million pounds of copper), below plan primarily due to lower copper and
gold grades. During the quarter, scheduled mine and mill shutdowns were completed for maintenance, including the replacement of 2 kilometers of underground conveyor belts and replacement of SAG mill liners, with the original completion
date extended due to COVID-19 safety protocols. There are no further planned major shutdowns expected over the balance of the year.
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During the quarter, total development towards the B3 and C-zone advanced by approximately 1,253 metres, achieving 95% of planned levels year to date.
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The underground mine averaged 15,358 tonnes per day for the quarter, the lower production was primarily due to a planned maintenance shutdown.
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The mill averaged 14,240 tonnes per day for the quarter, including the maintenance shutdowns as described above, at an average gold and copper grade of 0.46 grams
per tonne gold and 0.72% copper, respectively, with gold and copper recoveries of 81% and 83%, respectively, in-line with plan.
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During the quarter, the mill continued to process lower than planned copper and gold grades as the mine continued to experience lower grades mined during the
quarter. The 2020 and 2021 mine plans incorporate multiple sources of mined ore, including depletion of the east and west caves and rehabilitation and pillar recoveries of medium-high grade zones. In the first and second quarters of 2020,
higher than expected dilution was experienced in portions of the east and west caves. Additionally, the rehabilitation and pillar recovery productivities were lower than planned contributing to the lower grades mined in the first half of
the year. Management continues to work on optimization scenarios, but based on current information, lower grades are expected to continue over the balance of the year and potentially into 2021 as we complete mining in these areas. It is
not expected that the lower grades currently being experienced in the east and west cave zones will be encountered in the SLC, B3 and C-zones. Ore extraction from the B3 cave is expected to begin in second half of 2021.
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During the quarter, key capital projects were advanced including the development of the C-zone as well as detailed engineering and earthworks related to the
thickened and amended tailings (TAT) plant.
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Exploration activities in the quarter included underground delineation drilling on the East Extension zone and refinement of exploration targets for the planned
drilling campaign within the Cherry Creek Trend area.
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Participants may also listen to the conference call by calling toll free 1-833-502-0493, or 1-778-560-2562 outside of the U.S. and Canada.
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A recorded playback of the conference call will be available until by calling toll free 1-800-585-8367, or 1-416-621-4642 outside of the U.S. and Canada, passcode 3546224. An archived webcast will also be
available until August 30, 2020 at www.newgold.com.
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