New Gold Reports 1Q:22 Results

(New Gold, 2.May.2022)  New Gold Inc. (TSX: NGD) (NYSE: NGD) reports first quarter results for the company as of 31 March 2022. The company will host a conference call and webcast today at 8:30 am Eastern Time to discuss the first quarter consolidated results (details are provided at the end of this news release).

Consolidated First Quarter Highlights

Gold equivalent1 (“gold eq.”) production of 87,696 ounces (68,101 ounces of gold, 8.2 million pounds of copper and 109,511 ounces of silver)

— Operating expenses of $1,029 per gold eq. ounce

— All-in sustaining costs2 of $1,778 per gold eq. ounce, including total cash costs2 of $1,069 per gold eq. ounce

— Average realized gold price2 of $1,897 per ounce and average realized copper price2 of $4.53 per pound

— Cash generated from operations of $68 million, or $0.10 per share

— Cash generated from operations, before changes in non-cash operating working capital2 of $66 million, or $0.10 per share

— Net loss of $8 million, or ($0.01) per share

— Adjusted net earnings2 of $10mn, or $0.02 per share

— 31 March 2022 cash and cash equivalents of $432mn

“The first quarter saw New Gold continue to advance our objectives with a focus on delivering on our 2022 plan and securing and extending the Company’s longer-term future,” stated Renaud Adams, President & CEO. “We delivered solid total gold production at Rainy River, despite an increase in COVID-19 cases and during a quarter in which capitalized waste stripping was prioritized. While we faced the inflationary challenges experienced across the industry, our teams remained disciplined with their objectives and with the benefit of a weaker Canadian dollar, delivered strong operating cash flow in the first quarter. We currently expect to deliver on our 2022 guidance, and our operations continue to review optimization opportunities and assess cost reduction initiatives to mitigate against inflationary pressures. We also continued to advance our longer-term priorities, including advancing the development of the Intrepid underground zone at Rainy River and the B3 ramp-up and C-Zone development at New Afton.”

“Additionally, we continue to transform the future of the Company, both operationally and financially. During the first quarter, our team delivered an updated Rainy River Technical Report, extending Rainy River’s mine life to 2031, which is another positive milestone for future production, and something we will continue to build on. We added an experienced Chief Operating Officer which will be invaluable to the Company as we continue to advance multiple projects at both sites. We also announced our intention to redeem the remaining $100 million aggregate principal amount of our outstanding 2025 senior notes in mid-May, further improving our financial flexibility during this period of optimization for our Company,” added Mr. Adams.

Consolidated Financial Highlights

Q1 2022Q1 2021
Revenue ($M)174.7164.9
Operating expenses ($M)95.293.9
Net (loss) earnings ($M)(7.8)15.1
Net (loss) earnings, per share ($)(0.01)0.02
Adj. net earnings ($M)210.38.1
Adj. net earnings, per share ($)20.020.01
Operating cash flow ($M)67.853.3
Operating cash flow, per share ($)0.100.08
Cash generated from operations, before changes
in non-cash operating working capital ($M)2
66.463.7
Cash generated from operations, before changes in
non-cash operating working capital, per share ($)2
0.100.09
  • Revenues increased over the prior-year period due to higher gold and copper prices and higher gold sales volume, partially offset by lower copper sales volume.
  • Operating expenses were consistent with the prior-year period.
  • Net loss for the quarter compared to net earnings in the prior-year period primarily due to an unrealized loss on the revaluation of the gold stream obligation derivative resulting from the updated Technical Report for Rainy River.
  • Adjusted net earnings2 increased over the prior-year period due to higher revenues, partially offset by higher depreciation and depletion and exploration.
  • Operating cash flow increased over the prior-year period due to higher revenues and negative working capital movements in the prior-year period.

Consolidated Operational Highlights

Q1 2022Q1 2021
Gold eq. production (ounces)187,69696,026
Gold eq. sold (ounces)192,53691,818
Gold production (ounces)68,10166,650
Gold sold (ounces)70,56263,539
Copper production (Mlbs)8.213.8
Copper sold (MIbs)9.213.3
Gold revenue, per ounce ($)1,8811,769
Copper revenue, per pound ($)4.263.62
Average realized gold price, per ounce ($)21,8971,788
Average realized copper price, per pound ($)24.533.83
Operating expenses, per gold eq. ounce ($)1,0291,022
Total cash costs, per gold eq. ounce ($)21,0691,067
Depreciation and depletion, per gold eq. ounce ($)529498
All-in sustaining costs, per gold eq. ounce ($)21,7781,550
Sustaining capital and sustaining leases ($M)255.537.9
Growth capital ($M)222.918.5
Total capital and leases ($M)78.456.4

Rainy River Mine

Operational Highlights

Rainy River MineQ1 2022Q1 2021
Gold eq. production (ounces)159,89556,513
Gold eq. sold (ounces)161,68453,577
Gold production (ounces)58,83454,656
Gold sold (ounces)60,63551,796
Gold revenue, per ounce ($)1,8911,786
Average realized gold price, per ounce ($)21,8911,786
Operating expenses, per gold eq. ounce ($)9481,006
Total cash costs, per gold eq. ounce ($)29481,006
Depreciation and depletion, per gold eq. ounce ($)628635
All-in sustaining costs, per gold eq. ounce ($)21,5921,586
Sustaining capital and sustaining leases ($M)237.229.3
Growth capital ($M)24.91.3
Total capital and leases ($M)42.230.6

Operating Key Performance Indicators

Rainy River Mine (Open Pit Mine only)Q1 2022Q1 2021
Tonnes mined per day (ore and waste)118,657150,767
Ore tonnes mined per day20,01935,681
Operating waste tonnes per day35,19965,643
Capitalized waste tonnes per day63,43849,442
Total waste tonnes per day98,637115,085
Strip ratio (waste:ore)4.933.23
Tonnes milled per calendar day24,31826,301
Gold grade milled (g/t)0.920.80
Gold recovery (%)9189
  • Open pit tonnes mined per day decreased over the prior-year period due to an increase in COVID-19 cases at site in the first part of the quarter impacting equipment utilization, and cold weather conditions affecting drilling productivity. Approximately 1.8 million ore tonnes and 8.9 million waste tonnes (including 5.7 million capitalized waste tonnes) were mined from the open pit at an average strip ratio of 4.93:1. During the second half of the year, the strip ratio is expected to decrease as the mine is prioritizing capitalized waste during the colder weather months.
  • Tonnes milled per calendar day decreased over the prior-year period due to mechanical maintenance on both the SAG mill and crusher, and cold weather conditions impacting stockpile movement.
  • Gold eq.1 production was 59,895 ounces (58,834 ounces of gold and 79,621 ounces of silver), an increase over the prior-year period due to higher gold grade and gold recovery, partially offset by lower tonnes processed. Production is expected to strengthen in the second half of the year and represent approximately 55% of the annual production.
  • Operating expense per gold eq. ounce decreased over the prior-year period primarily due to higher sales volume.
  • All-in sustaining costs2 per gold eq. ounce slightly increased over the prior-year period due to higher sustaining capital spend, partially offset by higher sales volume.
  • Total capital and leases increased over the prior-year period due to higher sustaining and growth capital. Sustaining capital primarily related to $20mn of capitalized waste, as well as capital maintenance, and the advancement of the annual tailings dam raise. Growth capital2 primarily related to the development of the Intrepid underground zone, which advanced 512 metres.
  • Free cash flow2 for the quarter was $15mn, an increase over the prior-year period due to an increase in cash generated from operations, partially offset by higher capital spend.

New Afton Mine

Operational Highlights

New Afton MineQ1 2022Q1 2021
Gold eq. production (ounces)127,80039,512
Gold eq. sold (ounces)130,85238,241
Gold production (ounces)9,26711,994
Gold sold (ounces)9,92711,744
Copper production (Mlbs)8.213.8
Copper sold (Mlbs)9.213.3
Gold revenue, per ounce ($)1,8181,698
Copper revenue, per ounce ($)4.263.62
Average realized gold price, per ounce ($)21,9351,799
Average realized copper price, per pound ($)24.533.83
Operating expenses, per gold eq. ounce ($)1,1921,046
Total cash costs, per gold eq. ounce ($)21,3131,153
Depreciation and depletion, per gold eq. ounce ($)325296
All-in sustaining costs, per gold eq. ounce ($)21,9131,388
Sustaining capital and sustaining leases ($M)217.88.5
Growth capital ($M)218.017.2
Total capital and leases ($M)35.925.8

Operating Key Performance Indicators

New Afton MineQ1 2022Q1 2021
Tonnes mined per day (ore and waste)7,02811,395
Tonnes milled per calendar day10,29913,564
Gold grade milled (g/t)0.380.39
Gold recovery (%)8379
Copper grade milled (%)0.490.64
Copper recovery (%)8180
  • Underground tonnes mined per day decreased over the prior-year period due to the planned completion of Lift 1 mining activities, with the exception of the recovery level, and the continued ramp-up of the B3 zone.
  • Tonnes milled per calendar day decreased over the prior-year period and is currently incorporating lower grade surface stockpiles to supplement the overall lower tonnes mined.
  • Gold eq.1 production was 27,800 ounces (9,267 ounces of gold and 8.2 million pounds of copper), a decrease over the prior-year period due to lower tonnes processed and lower copper grade.
  • Operating expense per gold eq. ounce increased over the prior-year period, primarily due to lower sales volume.
  • All-in sustaining costs2 per gold eq. ounce increased over the prior-year period due to higher sustaining capital spend and lower sales volume.
  • Total capital and leases increased over the prior-year period, primarily due to higher sustaining capital spend. Sustaining capital primarily related to B3 mine development and tailings management and stabilization activities. Growth capital2 primarily related to C-Zone development, which advanced 931 metres in the quarter.
  • Free cash flow2 for the quarter was a net outflow of $33mn, a decrease over the prior-year period due to lower revenue, planned higher capital spend, and an increase in the free cash flow interest payment.

First Quarter 2022 Conference Call and Webcast

The Company will host a webcast and conference call today at 8:30 am Eastern Time to discuss the Company’s first quarter consolidated results.

  • Participants may listen to the webcast by registering on our website at www.newgold.com or via the following link https://produceredition.webcasts.com/starthere.jsp?ei=1536194&tp_key=0e2e702de9
  • Participants may also listen to the conference call by calling North American toll free 1-888-664-6383, or 1-416-764-8650 outside of the U.S. and Canada, passcode 93425158
  • A recorded playback of the conference call will be available until June 2, 2022 by calling North American toll free 1-888-390-0541, or 1-416-764-8677 outside of the U.S. and Canada, passcode 425158. An archived webcast will also be available at www.newgold.com.

About New Gold

New Gold is a Canadian-focused intermediate mining company with a portfolio of two core producing assets in Canada, the Rainy River gold mine and the New Afton copper-gold mine. The company also holds a 5% equity stake in Artemis Gold Inc., and other Canadian-focused investments. New Gold’s vision is to build a leading diversified intermediate gold company based in Canada that is committed to the environment and social responsibility. For further information on the company, visit www.newgold.com.  

Endnotes
1Total gold eq. ounces include silver and copper produced/sold converted to a gold equivalent. All copper is produced/sold by the New Afton Mine. Gold eq. ounces for Rainy River in Q1 2022 includes production of 79,621 ounces of silver (78,640 ounces sold) converted to a gold eq. based on a ratio of $1,800 per gold ounce and $24.00 per silver ounce used for 2022 guidance estimates. Gold eq. ounces for New Afton in Q1 2022 includes 8.2 million pounds of copper produced (9.2 million pounds sold) and 29,890 ounces of silver produced (32,575 ounces of silver sold) converted to a gold eq. based on a ratio of $1,800 per gold ounce, 4.00 per copper pound and $24.00 per silver ounce used for 2022 guidance estimates.
2.“Total cash costs”, “all-in sustaining costs”, “adjusted net earnings/(loss)”, “adjusted tax expense”, “sustaining capital and sustaining leases”, “growth capital”, “cash generated from operations”, “free cash flow”, and “average realized gold/copper price per ounce/pound” are all non-GAAP financial performance measures that are used in this news release. These measures do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For more information about these measures, why they are used by the Company, and a reconciliation to the most directly comparable measure under IFRS, see the “Non-GAAP Financial Performance Measures” section of this news release.

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