New Gold axes five vice-presidents in reorganization
New Gold Inc. [NGD-TSX, NYSE American] said Monday December 10 its senior management team has been reorganized to better align the company’s corporate structure with a smaller asset base.
As part of the announced restructuring, New Gold has eliminated five vice-president positions. To strengthen the depth of technical and operational experience at the senior corporate level, New Gold will be appointing a vice-president, technical services in the near future.
Reporting directly to the CEO, this position will assume the responsibilities for creating organic growth, including projects and exploration, as well as providing technical and operational oversight to the organization.
New Gold shares declined on the news, falling 3.51% or $0.04 to $1.10. The stock is trading in a 52-week range of $4.45 and $0.92.
New Gold has recently reduced its core asset base to two operating assets including the Rainy River Mine in Ontario and New Afton Mine in British Columbia. This follows the divestment of the Mesquite and Peak mines earlier this year.
The divestment follows news of operating problems at the Rainy River Mine, prompting the company to shuffle its executive suite twice in the space of four months.
Renaud Adams was recently named President and CEO, replacing Raymond Threlkeld, who was appointed to the role in early May 2018.
In a note to investors, Scotiabank said Adams is well-respected by investors after his success with Richmont Mines. He was President and CEO of Richmont when the company was sold to Alamos Gold Inc. [AGI-TSX, NYSE] in November 2017. Prior to that, Adams was Chief Operating Officer at Primero Mining and General Manager with Iamgold Corp. [IMG-TSX; IAG-NYSE] at the Rosebel Mine in Suriname.
New Gold acquired the Rainy River Mine in October, 2013 by snapping up Rainy River Resources Ltd. in a deal that was valued at $310 million. Rainy River is now the company’s flagship asset.
However, its shares went into freefall earlier this year when the company reduced production forecasts at Rainy River to between 210,000 and 250,000 ounces from an earlier target of between 310,000 and 350,000 ounces. This was due to problems that included variability in the process facility’s start-up performance as well as lower gold grades and recoveries.
“Today’s announcement marks another step forward in our strategy to reposition New Gold for the future,” said Adams in a press release.
In addition to Rainy River and New Afton, the company also operates the Cerro San Pedro Mine in Mexico (which transitioned to residual leaching in 2016). In addition, New Gold owns 100% of the Blackwater Project southwest of Prince George, central British Columbia. Proven and probable reserves at Blackwater stand at 8.2 million ounces of gold and 60.8 million ounces of silver.