New Gold consolidates 100% interest in B.C. gold-copper mine
New Gold Inc. (NGD-TSX, NYSE American) has struck a deal with Ontario Teachers’ Pension Plan to acquire the remaining 19.9% free cash flow interest in the company’s New Afton Mine in British Columbia.
Following the transaction, the company will have fully consolidated its free cash flow interest in New Afton to 100%. Ontario Teachers’ interest in the mine will be fully eliminated for a cash payment of $300 million, which New Gold plans to fund using cash on hand, borrowing from its existing revolving credit facility and a $100 million gold prepayment financing.
“This is an excellent transaction allowing New Gold to fully consolidate the free cash flow exposure to one of Canada’s highest quality gold/copper assets which we already own and operate,’’ said New Gold President and CEO Patrick Godin. “With the C-Zone ramp up progressing well, New Afton is on the verge of exceptional production growth and cost improvement that should lead to increased free cash flow generation,’’ he said. “Our goal is to maximize this free cash flow generation at the mine, while continuing our exploration program to extend mine life and create further value for our stakeholders and shareholders.’’
New Gold shares were virtually unchanged on the news, easing 0.23% or $0.01 to $4.26. The shares trade in a 52-week range of $5.39 and $2.29.
New Gold recently released a three-year operational outlook for both New Afton and the company’s Rainy River operation, which is located in Ontario.
The company said it expects its consolidated gold production this year to be in the 325,000 to 365,000 ounces range, marking a roughly 16% increase from 2024, driven by increased production from the company’s Rainy River mine in Ontario.
The gold production target for 2025 includes 60,000 to 70,000 ounces from the New Afton mine in British Columbia, and 265,000 to 295,000 ounces from Rainy River, where the company is anticipating a 20% increase over the previous year due to a 25% rise in the gold grade as the underground mining rate is expected to increase.
Copper production this year is expected to be in the 50 to 60 million pounds range. In 2024, the company produced 54.0 million pounds of copper, achieving the midpoint of its guidance range. All of the copper production comes from the New Afton mine.
Looking further ahead, New Gold is guiding investors to anticipate gold production of 435,000 to 490,000 ounces in 2026 and 375,000 to 445,000 ounces in 2027. Copper production is forecast to increase to 85 million to 100 million pounds in 2026, rising to 95 million to 115 million pounds in 2027.