New Gold CEO sees smoother production profile in Ontario
New Gold Inc. (NGD-TSX, NYSE American) has released a technical report containing an update on the open pit and expanded underground mine plans for its Rainy River gold mine in Ontario.
The company said the life of mine has been extended to 2031 with the conversion of an additional 569,000 gold ounces in the underground main zones to mineral reserves. It said the remaining open pit will be mined using an optimized selective mining approach which, combined with stockpile movement, leads to both a smoother and sustainable mill grade and gold production profile, before transitioning to a cost-effective batch processing underground operation.
New Gold is a Canada-focused intermediate gold mining company. It’s two core producing assets are the Rainy River mine and the New Afton copper-gold mine, which is located in British Columbia. The company also holds a 5.0% equity stake in Artemis Gold Inc. [ARTG-TSXV], a company that acquired the Blackwater Project in central B.C. from New Gold in August 2020.
The company produced 418,933 gold equivalent ounces (AuEq) (including 286,921 ounces of gold, and 61.7 million pounds of copper) in 2021, down from 437,617 AuEq ounces (including 293,139 ounces of gold and 72.1 million pounds of copper) in 2020.
AuEq production at Rainy River was 242,961 ounces in 2021, consisting of 234,469 ounces of gold and 611,433 ounces of silver (open pit only).
New Gold is forecasting total AuEq production of between 380,000 and 440,000 ounces this year,
including 265,000-295,000 ounces from Rainy River and 115,000-145,000 ounces from New Afton.
The updated technical report for Rainy River was released after the close of trading on March 31, 2022, when New Gold shares closed unchanged at $2.27 on volume of 953,140. The shares are currently trading in a 52-week range of $2.68 and $1.29.
“The filing of the updated Rainy River technical report is another positive milestone towards delivering sustainable production,” said New Gold President and CEO Renaud Adams. “I am confident that our updated approach for mining the remaining open pit should lead to a smoother, more consistent grade and production profile,” he said.
Annual AuEq production is expected to average approximately 310,000 ounces annually during the 2022 to 2027 period. Total gold equivalent production for the balance balance of the mine life is forecast at 2.58 million ounces.
The updated mine plan predominantly focuses on the remaining ounces from the main ODM zone, which has historically reconciled well with the resource model, from the second half of 2022 to 2025. It was prepared using mineral reserves and mineral resources as at December 31, 2021, and assuming metal prices of US$1,400 per gold ounce and US$19 per silver ounce and a foreign exchange rate of $1.25 Canadian dollars to $1.00 US dollar.