New Gold Inc. (TSX-NGD, NYSE American) said strong operational performance in the third quarter of 2023 has positioned the company to achieve the top end of its annual production targets for this year and the low end of cost guidance.
Production totaled 111,204 gold equivalent ounces at an all-in-sustaining cost of US$1,477 per-gold equivalent (AuEq) ounce (82,986 ounces of gold, 13.2 million pounds of copper and 145,452 ounces of silver), marking the highest quarterly production since 2021 and a 22% increase over the prior-year period. Solid production and low costs in the third quarter resulted in strong cash flow from operations of $100 million and free cash flow of $22 million.
The shares eased 0.34% or $0.005 to $1.47 and trade in a 52-week range of $1.99 and $1.12.
New Gold is a Canada-focused intermediate gold mining company. Its two core producing assets are the Rainy River mine in Ontario and the New Afton copper-gold mine in British Columbia. The company also holds a 5.0% equity stake in Artemis Gold Inc. [TSXV-ARTG], a company that acquired the Blackwater Project in central B.C. from New Gold in August 2020.
New Gold expects to produce between 365,000 and 425,000 ounces of AuEq this year, including 235,000 to 265,000 ounces from Rainy River and 130,000 to 160,000 ounces from New Afton. The New Afton mine is located 10 kilometres west of Kamloops and 350 kilometres northeast of Vancouver.
The company’s third quarter highlights included a standout quarter from New Afton, exceeding planned copper and gold production, mostly as a result of higher tonnes processed. Q3 extraction rates continue to exceed plan at Afton, where production is tracking to the top end of 2023 guidance.
The company said Rainy River continues to deliver stable production quarter-over-quarter. Both the open pit and underground mines are well positioned to deliver fourth quarter mill feed and the processing plant is running well. Production is tracking the top end of 2023 guidance.
Meanwhile, New Gold reported a third quarter net loss of $2.7 million ($0.00) per share, which compared to a loss of $4.2 million $0.01 in the equivalent period in 2022. Adjusted net earnings in the third quarter came in at $23 million or $0.03 per share.
“The third quarter was an impressive one for New Gold,’’ said New Gold President and CEO Patrick Godin. “We delivered a 22% increase in gold equivalent production over the prior-year period, with a meaningful decrease in all-in-sustaining costs, leading to positive free cash flow during the quarter for the company while continuing to invest in our growth projects,’’ he said.
Godin said key milestones have been achieved at the New Afton mine with the first draw bell at the C-Zone and the final commissioning of all 29 dewatering wells. “This is a pivotal moment for the New Afton mine with production growth and declining costs expected in the near term, and all major capital expenditures for tailings stabilization completed.