New Gold rallies on 45% production rise in Q2
New Gold Inc. (NGD-TSX, NYSE American) said Tuesday it produced 102,374 ounces of gold equivalent in the second quarter of 2023, a 45% increase over the prior-year period.
The company’s shares advanced on the news, rising 8.2% or 12 cents to $1.58 on volume of 1.26 million. The shares are currently trading in a 52-week range of $1.95 and 80 cents.
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, 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.
“At Rainy River, strong quarterly production results were attributed to higher mill availability due to the team’s proactive measures taken during the planned maintenance activities,’’ said New Gold President and CEO Patrick Godin.
“In addition to a great operating quarter, we continued to make meaningful progress on advancing our growth activities, securing the future production of our company,’’ he said. “C-Zone development at New Afton continued and remains on-track for first ore production in the fourth quarter of this year, and development of the underground Main zone at Rainy River has commenced as planned.’’
Total gold equivalent ounces include silver and copper produced/sold converted to gold equivalent. All copper is produced by New Afton. Gold equivalent ounces at Rainy River in the second quarter of 2023 include production of 122,211 ounces of silver (120,579 ounces sold) converted to gold based on a ration of US$1,750 per gold ounce and US$22 per silver ounce.
Gold equivalent ounces at New Afton in the second quarter includes 12 million pounds of copper and 29,997 ounces of silver. That metal is converted to gold based on a ratio of US$1,750 per gold ounce, US$3.50 copper pound and US$22 per silver ounce.
The company has said gold and copper production are expected to significantly increase during the C-Zone period, while a significant decrease in all-in-sustaining costs is likely to lead to a significant free cash flow.
Meanwhile, the company remains well positioned to meet all annual production guidance metrics outlined earlier in 2023. The company has said it expects to produce between 365,000 and 425,000 ounces of gold equivalent (AuEq) this year.
New Gold was in the news recently when the company appointed Godin as CEO, replacing Renaud Adams, who had been CEO of New Gold since 2018.
Godin joined New Gold earlier this year after serving as Chief Operating Officer at Pretium Resources Inc. prior to the acquisition. He has over 30 years of technical and operating experience, including a spell as Vice-President, Project Development for G Mining Services.He also served as CEO with Stornoway Diamonds Corp.