On-Track to Meet Annual Guidance
New Gold Inc. (“New Gold” or the “Company”) (TSX and NYSE
American: NGD) reports first quarter results for the Company as
of March 31, 2019. (All amounts are in U.S. dollars unless
otherwise indicated)
A conference call and webcast will follow to discuss these
results at 8:30 a.m. Eastern time (details are provided at the end
of this press release).
(For detailed information, please refer to the Company’s First
Quarter Management’s Discussion and Analysis (MD&A) and
Financial Statements that are available on the Company’s website at
www.newgold.com and on SEDAR at www.sedar.com. The Company uses
certain non-GAAP financial performance measures throughout this
press release. Please refer to the “Non-GAAP Financial Performance
Measures” section of this press release and in the MD&A.)
First Quarter Highlights
Highlights for the first quarter include:
- Total production of 123,263 gold
equivalent (eq.) ounces (79,398 ounces of gold, 136,513 ounces of
silver and 19.5 million pounds of copper) at average realized gold
and copper prices1 of $1,301 per ounce and $2.79 per pound,
respectively. Production is on track to meet annual guidance of
465,000 to 520,000 gold equivalent ounces.
- Revenues of $167.9 million.
- Operating expense of $645 per gold eq.
ounce, on track to meet annual guidance of $690 to $790.
- All-in sustaining costs (AISC)1 of
$1,083 per gold eq. ounce, on track to meet annual guidance of
$1,330 to $1,430.
- Net loss from continuing operations of
$13.4 million ($0.02 per share).
- Adjusted net loss1 from continuing
operations, which excludes other gains and losses, was $1.8 million
($0.00 per share).
- Operating cash flow generated from
continuing operations of $74.3 million ($0.13 per share). Operating
cash flow generated from continuing operations, before changes in
non-cash operating working capital1, was $71.1 million ($0.12 per
share).
“We are encouraged by the progress made at Rainy River during
the first quarter as we re-position the operation for efficient and
sustainable mining. Over the course of the year, we expect to drive
further efficiencies throughout the operation with the objective of
delivering free cash flow starting in late 2020,” stated Renaud
Adams, CEO. “The New Afton Mine reported another strong quarter of
operating results as the team further advanced the development of
the C-zone. We are particularly encouraged with the organic growth
potential of the D-zone with the first hole of the exploration
drilling program intersecting 140 metres of mineralization located
360 metres below the C-zone and a second hole is currently
underway.”
Financial Highlights (Continuing
Operations1)
First Quarter 2019 First Quarter
2018 Revenues from mining operations 167.9 147.5
Net earnings (loss), per share (0.02) (0.05) Adj. net
earnings (loss)2 per share (0.00) (0.03) Operating
cash flow, per share 0.13 0.07 Adj. operating cash
flow2, per share 0.12 0.09 1. Continuing operations
include the Rainy River, New Afton and Cerro San Pedro Mines.
2. Refer to the “Non-GAAP Performance
Measures” section of this press release.
1. Refer to the “Non-GAAP Performance Measures section of this
press release.
- Revenues for the quarter from
continuing operations were $167.9 million, an increase over the
prior-year quarter due to an increase in gold ounces sold, offset
by a decrease in average realized prices.
- Net loss for the quarter was $13.4
million, or $0.02 per share, and adjusted net loss was $1.8
million, or $0.00 per share, which improved over the prior-year
quarter due to the increase in revenue.
- The March 31, 2019 cash balance was
$132.3 million.
Operational Highlights (Continuing
Operations1)
First Quarter 2019 First Quarter
2018 Guidance 2019 Gold eq. production (ounces)
2,3 123,263 119,075 465,000 – 520,000 Gold
production (ounces) 79,398 63,771 300,000 –
335,000 Copper production (Mlbs) 19.5 22.2 75
– 85 Average realized gold price, per ounce4 1,301
1,331 - Average realized copper price, per pound4
2.79 3.14 - Operating expense, per gold eq. ounce3
645 760 - Total cash costs, per gold eq.
ounce3,4 697 828 740 - 820 AISC, per gold eq.
ounce3,4 1,083 1,373 1,330 - 1,430 Sustaining
capital and sustaining leases ($M)4
44.7
55.5 255 - 285 Growth capital ($M)4 7.8
12.7 50 - 55 1. Continuing operations include the Rainy
River, New Afton and Cerro San Pedro Mines.
2. All production and cost figures exclude
production from Cerro San Pedro residual leaching.
3. Gold equivalent ounces produced
includes silver ounces and copper pounds converted to a gold
equivalent based on a ratio of the average spot market prices for
the commodities for each period.
4. Refer to the “Non-GAAP Performance
Measures” section of this press release.
Rainy River Mine Highlights
First Quarter 2019 First Quarter
2018 Guidance 2019 Gold eq. production (ounces) 1
62,278 40,016 250,000 – 275,000 Gold eq. sold
(ounces)1 71,483 41,621 - Gold produced
(ounces) 61,557 39,325 245,000 – 270,000 Gold
sold (ounces) 70,695 40,880 - Average realized
gold price, per ounce2 1,295 1,328 - Operating
expense, per gold eq. ounce 801 1,240 - Total
cash costs, per gold eq. ounce2 801 1,240 870
- 950 AISC, per gold eq. ounce2 1,330 2,427
1,690 - 1,790 Sustaining capital and sustaining leases ($M)2
36.6 48.9 210 - 230 Growth capital ($M)2 3.8
10.2 ~3.0 1. Gold equivalent ounces for Rainy River
include silver ounces produced converted to a gold equivalent based
on a ratio of the average spot market prices for the commodities
for each period. The ratio for Q1 2019 was calculated based on
average spot market prices of $1,304 per gold ounce and $15.57 per
silver ounce. The ratio for Q1 2018 was calculated based on average
spot market prices of $1,329 per gold ounce and $16.77 per silver
ounce.
2. Refer to the “Non-GAAP Performance
Measures” section of this press release.
Q1 18 Q2 18 Q3 18
Q4 18 Q1 2019 Tonnes ex-pit mined per
day (ore and waste) 112,432 107,416 102,290
111,507 111,679 Ore tonnes mined per day
36,296 36,043 30,439 32,054 15,739
Operating waste tonnes per day 54,321 43,570
23,333 67,406 62,955 Capitalized waste tonnes per day
21,816 27,802 48,518 12,047
32,986 Strip ratio (waste:ore) 2.1 1.98 2.36
2.48 6.10 Tonnes milled per calendar day
17,534 16,549 16,962 20,668 19,725 Gold
grade milled (g/t) 1.08 1.24 1.21 1.42
1.19 Gold recovery (%) 81% 87% 87%
89% 90% Mill availability (%) 77% 74%
76% 80% 89% Gold production (oz) 39,325
55,219 55,538 77,202 61,557
- The Rainy River Mine reported in-line
gold equivalent production of 62,278 ounces (61,557 ounces of gold
and 60,383 ounces of silver) for the quarter. As previously
disclosed, production during the quarter included planned lower
grades as mining operations continued the transition to phase 2 of
the mine plan.
- Operating expense per gold eq. ounce
was $801 for the quarter, which is a 35% decrease over the
prior-year quarter, driven by improved operational performance and
increased metal production and sales volumes achieved in the
current year quarter.
- All-in sustaining costs (AISC) per gold
eq. ounce for the quarter were $1,330, which included $10 million
of capitalized stripping costs ($140 per gold eq. ounce), and $27
million of other sustaining capital expenditure and lease payments.
AISC per gold eq. ounce for the quarter declined by 45% over the
prior-year quarter due to improved operational performance and an
increase in metal production and sales volumes coupled with a
decrease in sustaining capital. It is expected that sustaining
capital will be higher in the second and third quarters when
weather conditions are more favourable for infrastructure and
tailings construction and will decline in the fourth quarter.
- Growth capital for the quarter was $3.8
million, related to underground mine development, working capital
payments and the transfer of infrastructure from the
contractor.
- During the quarter, approximately 1.4
million ore tonnes and 8.6 million waste tonnes (including 2.97
million capitalized waste tonnes) were mined at an operating strip
ratio of 6.10:1. Mining operations in the quarter were primarily
focused on waste stripping to expose ore for mining in future
quarters. Additionally, 0.9 million tonnes of out-pit non-acid
generating (NAG) material were mined in preparation for planned dam
raises scheduled to begin during the second quarter.
- Mill throughput for the quarter
averaged 19,725 tonnes per day, below the annual target of 22,000
to 24,000 tonnes per day. The lower average mill throughput was
negatively impacted by the significant buildup of ice in the
crushed ore stockpile above the apron feeders. Average mill
throughput returned to target levels at the end of the
quarter.
- Mill availability for the quarter was a
record 89% (95% in March), despite the planned downtime to replace
the ball mill trunnion and complete repairs.
- Gold recovery improved to average 90%
for the quarter, a significant improvement over the 89% reported in
the fourth quarter when considering the 16% lower average grade
milled. Recoveries are expected to continue to improve throughout
the year to an average of 90-92% for the year.
- During the first quarter of 2019, the
Company launched a comprehensive optimization study that includes
the review of alternative open pit and underground mining scenarios
with the overall objective of reducing capital and improving the
return on investment over the life of mine. An updated life of mine
plan is anticipated to be completed in the fourth quarter.
- A strategic exploration drill program
is expected to begin in the second quarter that will test near-mine
targets in the Intrepid North area.
New Afton Mine Highlights
First Quarter 2019 First Quarter
2018 Guidance 2019 Gold eq. produced (ounces) 1
60,986 73,717 215,000 – 245,000 Gold eq. sold
(ounces) 1 63,216 69,914 - Gold produced
(ounces) 17,841 19,998 55,000 – 65,000 Gold
sold (ounces) 18,617 18,485 - Copper produced
(Mlbs) 19.5 22.2 75 – 85 Copper sold (Mlbs)
20.2 21.3 - Average realized gold price, per
ounce2 1,327 1,336 - Average realized copper
price, per pound2 2.79 3.14 - Operating
expense, per gold eq. ounce 468 405 -
Operating expense, per gold ounce 477 408 480
- 520 Operating expense, per copper pound 1.00 0.96
0.95 - 1.15 Total cash costs, per gold ounce (net of
by-product credits)2 (1,132) (1,702) (1,350 -
1,310) Total cash costs, per gold eq. ounce2 578 523
600 - 640 AISC, per gold ounce (net of by-product credits)2
(673) (1,313) (500) – (420) AISC, per gold eq.
ounce2 714 626 810 - 890 Sustaining capital
and sustaining leases ($M)2 8.0 6.6 45 - 55
Growth capital ($M)2 2.6 0.5 40 - 45 1. Gold
equivalent ounces for New Afton includes silver ounces and copper
pounds produced converted to a gold equivalent based on a ratio of
the average spot market prices for the commodities for each period.
The ratio for Q1 2019 was calculated based on average spot market
prices of $1,304 per gold ounce, $15.57 per silver ounce and $2.82
per copper pound. The ratio for Q1 2018 was calculated based on
average spot market prices of $1,329 per gold ounce, $16.77 per
silver ounce and $3.16 per copper pound.
2. Refer to the “Non-GAAP Performance
Measures section of this press release.
Q1 18 Q2 18 Q3 18
Q4 18 Q1 19 Total ore tonnes mined per
day 16,108 13,654 17,105 17,099
15,352 Gold grade milled (g/t) 0.57 0.50 0.55
0.51 0.50 Gold recovery (%) 84.1 85.5
84.7 83.5 83.2 Gold production (oz)
19,998 18,637 19,916 18,778 17,841
Copper grade milled (%) 0.94 0.82 0.89
0.82 0.80 Copper recovery (%) 83.2 83.8
83.0 83.0 83.20 Copper production (Mlbs) 22.2
20.4 21.7 20.8 19.53
- The New Afton mine produced 60,986 gold
equivalent ounces for the quarter, including 17,841 ounces of gold,
and 19.5 million pounds of copper, in line with plan.
- Operating expense per gold eq. ounce
was $468 for the quarter, which is an increase from the prior-year
quarter primarily due to a decrease in sales volume.
- All-in sustaining costs (AISC) per gold
eq. ounce for the quarter was $714. AISC per gold ounce (net of
by-product credits) for the quarter was ($673). All-in sustaining
costs have increased over the prior-year quarter due to an increase
in sustaining capital as well as a decrease in metal sales volume
and revenue.
- Sustaining capital and sustaining lease
payments for the quarter was $8.0 million, primarily related to
tailings dam raises and equipment purchases and sustaining mine
development.
- Growth capital for the quarter was $2.6
million, primarily related to the C-zone.
- The second phase of a planned mill
upgrade to address supergene ore recovery advanced during the
quarter with commissioning scheduled for the third quarter.
- Development of the B3-zone is currently
underway, which will sustain ongoing production during the C-zone
development period.
- Efforts during the quarter continued to
focus on de-risking the execution of C-zone project, primarily on
the finalization of the tailings disposal plan and advancing
permitting efforts with the objective of updating the life of mine
plan in the latter part of the year. During the quarter,
exploration-heading development towards the C-zone commenced and
advanced by approximately 50 metres.
- An underground drilling program is
currently underway that will test the down plunge extension of the
C-zone (the D-zone) that could increase the resource inventory and
extend mine life beyond 2030. The first hole of the 10-hole program
has been completed, which intersected C-zone style mineralization
over an approximate 140-metre interval (from 662 metres to 802
metres depth) and ended at the planned target, 360 vertical metres
below the C-zone (assays pending). A second drill hole is currently
underway and the program is expected to be completed by the end of
the third quarter.
Blackwater Project Highlights
- On April 15, 2019, the federal Minister
of Environment and Climate Change issued a positive Decision
Statement regarding the Blackwater project’s environmental
assessment, which is a very significant milestone for the project.
The Company expects a decision from the province of British
Columbia on the environmental assessment by the end of 2019.
- On April 18, 2019, the Company entered
into a trilateral Participation Agreement with the Lhoosk’uz Dene
Nation and Ulkatcho First Nation, the two Indigenous groups whose
traditional territories overlap the project’s mine site. Engagement
and negotiations with other First Nations continue.
Conference Call and Webcast Information
The Company will host a webcast and conference call on Thursday,
April 25, 2019 at 8:30 am (EDT) to discuss the Company’s first
quarter financial and operating results.
Via Webcast: Available on the Company’s website at
www.newgold.com or from the following link:
https://event.on24.com/wcc/r/1975620/0AAB421FD47B45BB007F5F7D94728049
Via Telephone: Please dial 1-647-427-2311 or toll free
1-866-521-4909
Replay Archive: Please dial 1-416-621-4642 or toll free
1-800-585-8367, access code 3885697
The recorded playback of the conference call will be available
until May 25, 2019. An archived webcast will be available until
July 25, 2019.
About New Gold Inc.
New Gold is a Canadian-focused intermediate gold mining company.
The Company has a portfolio of two core producing assets, the Rainy
River and New Afton Mines in Canada. 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 located in Canada. New Gold’s objective is to be
a leading intermediate gold producer, focused on the environment
and social responsibility. For further information on the Company,
please visit www.newgold.com.
Cautionary Note Regarding Forward-Looking Statements
Certain information contained in this news release, including
any information relating to New Gold's future financial or
operating performance are "forward looking". All statements in this
news release, other than statements of historical fact, which
address events, results, outcomes or developments that New Gold
expects to occur are "forward-looking statements". Forward-looking
statements are statements that are not historical facts and are
generally, but not always, identified by the use of forward-looking
terminology such as "plans", "expects", "is expected", "budget",
"scheduled", "targeted", "estimates", "forecasts", "intends",
"anticipates", "projects", "potential", "believes" or variations of
such words and phrases or statements that certain actions, events
or results "may", "could", "would", "should", "might" or "will be
taken", "occur" or "be achieved" or the negative connotation of
such terms. Forward-looking statements in this news release
include, among others, statements with respect to: guidance for
production, operating expenses per gold ounce sold, total cash
costs and all-in sustaining costs, and the factors contributing to
those expected results, including throughput and recoveries, as
well as expected capital expenditures; planned development and
exploration activities for 2019 and beyond at the Company’s
operations; and the expected timing of a revised life-of-mine plan
for Rainy River and decision from the province of British Columbia
on the environmental assessment of Blackwater.
All forward-looking statements in this news release are based on
the opinions and estimates of management as of the date such
statements are made and are subject to important risk factors and
uncertainties, many of which are beyond New Gold's ability to
control or predict. Certain material assumptions regarding such
forward-looking statements are discussed in this news release, New
Gold's latest annual management's discussion and analysis
("MD&A"), Annual Information Form and Technical Reports filed
at www.sedar.com and on EDGAR at www.sec.gov. In addition to, and
subject to, such assumptions discussed in more detail elsewhere,
the forward-looking statements in this news release are also
subject to the following assumptions: (1) there being no
significant disruptions affecting New Gold's operations; (2)
political and legal developments in jurisdictions where New Gold
operates, or may in the future operate, being consistent with New
Gold's current expectations; (3) the accuracy of New Gold's current
mineral reserve and mineral resource estimates; (4) the exchange
rate between the Canadian dollar and U.S. dollar, and to a lesser
extent, the Mexican Peso, being approximately consistent with
current levels; (5) prices for diesel, natural gas, fuel oil,
electricity and other key supplies being approximately consistent
with current levels; (6) equipment, labour and materials costs
increasing on a basis consistent with New Gold's current
expectations; (7) arrangements with First Nations and other
Aboriginal groups in respect of the Rainy River, New Afton and
Blackwater being consistent with New Gold's current expectations;
and (8) all required permits, licenses and authorizations being
obtained from the relevant governments and other relevant
stakeholders within the expected timelines and the absence of
material negative comments during the applicable regulatory
processes; (9) the result of feasibility studies and other studies
being realized, and (10) metals and other commodity prices and
exchange rates being consistent with those estimated for the
purposes of 2019 guidance.
Forward-looking statements are necessarily based on estimates
and assumptions that are inherently subject to known and unknown
risks, uncertainties and other factors that may cause actual
results, level of activity, performance or achievements to be
materially different from those expressed or implied by such
forward-looking statements. Such factors include, without
limitation: significant capital requirements and the availability
and management of capital resources; additional funding
requirements; price volatility in the spot and forward markets for
metals and other commodities; fluctuations in the international
currency markets and in the rates of exchange of the currencies of
Canada, the United States and, to a lesser extent, Mexico;
discrepancies between actual and estimated production, between
actual and estimated mineral reserves and mineral resources and
between actual and estimated metallurgical recoveries; risks
related to early production at the Rainy River Mine, including
failure of equipment, machinery, the process circuit or other
processes to perform as designed or intended; fluctuation in
treatment and refining charges; changes in national and local
government legislation in Canada, the United States and, to a
lesser extent, Mexico or any other country in which New Gold
currently or may in the future carry on business; taxation;
controls, regulations and political or economic developments in the
countries in which New Gold does or may carry on business; the
speculative nature of mineral exploration and development,
including the risks of obtaining and maintaining the validity and
enforceability of the necessary licenses and permits and complying
with the permitting requirements of each jurisdiction in which New
Gold operates, the lack of certainty with respect to foreign legal
systems, which may not be immune from the influence of political
pressure, corruption or other factors that are inconsistent with
the rule of law; the uncertainties inherent to current and future
legal challenges New Gold is or may become a party to; diminishing
quantities or grades of mineral reserves and mineral resources;
competition; loss of key employees; rising costs of labour,
supplies, fuel and equipment; actual results of current exploration
or reclamation activities; uncertainties inherent to mining
economic studies; changes in project parameters as plans continue
to be refined; accidents; labour disputes; defective title to
mineral claims or property or contests over claims to mineral
properties; unexpected delays and costs inherent to consulting and
accommodating rights of Indigenous groups; risks, uncertainties and
unanticipated delays associated with obtaining and maintaining
necessary licenses, permits and authorizations and complying with
permitting requirements. In addition, there are risks and hazards
associated with the business of mineral exploration, development
and mining, including environmental events and hazards, industrial
accidents, unusual or unexpected formations, pressures, cave-ins,
flooding and gold bullion losses and risks associated with a mine
with relatively limited history of commercial production, such as
Rainy River, (and the risk of inadequate insurance or inability to
obtain insurance to cover these risks) as well as "Risk Factors"
included in New Gold's Annual Information Form, MD&A and other
disclosure documents filed on and available at www.sedar.com and on
EDGAR at www.sec.gov. Forward-looking statements are not guarantees
of future performance, and actual results and future events could
materially differ from those anticipated in such statements. All of
the forward-looking statements contained in this news release are
qualified by these cautionary statements. New Gold expressly
disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information,
events or otherwise, except in accordance with applicable
securities laws.
Technical Information
The scientific and technical information relating to the Mineral
Reserves contained herein has been reviewed and approved by Mr.
Nicholas Kwong, Director of Technical Services for the Company. The
scientific and technical information relating to the Mineral
Resources contained herein has been reviewed and approved by Mr.
Mark A. Petersen, a consultant to New Gold and its former Vice
President, Exploration. All other scientific and technical
information in this news release has been reviewed and approved by
Mr. Eric Vinet, Vice President, Technical Services for the Company.
Mr. Kwong is a Professional Engineer and a member of the
Association of Professional Engineers and Geoscientists of British
Columbia. Mr. Petersen is a Professional Geoscientist (P.Geo.) and
Practicing Member of the Association of Professional Geoscientists
of Ontario, an SME Registered Member and an AIPG Certified
Professional Geologist. Mr. Vinet is a Professional Engineer and
member of the Ordre des ingénieurs du Québec. Mr. Kwong, Mr.
Petersen and Mr. Vinet are "Qualified Persons" for the purposes of
NI 43-101.
Cautionary Note to U.S. Readers Concerning Estimates of
Mineral Reserves and Mineral Resources
Information concerning the properties and operations of New Gold
has been prepared in accordance with Canadian standards under
applicable Canadian securities laws, and may not be comparable to
similar information for United States companies. The terms "Mineral
Resource", "Measured Mineral Resource", "Indicated Mineral
Resource" and "Inferred Mineral Resource" used in this news release
are Canadian mining terms as defined in the Canadian Institute of
Mining, Metallurgy and Petroleum ("CIM") Definition Standards for
Mineral Resources and Mineral Reserves adopted by CIM Council on
May 10, 2014 and incorporated by reference in National Instrument
43101. While the terms "Mineral Resource", "Measured Mineral
Resource", "Indicated Mineral Resource" and "Inferred Mineral
Resource" are recognized and required by Canadian securities
regulations, they are not defined terms under standards of the
United States Securities and Exchange Commission. As such, certain
information contained in this news release concerning descriptions
of mineralization and mineral resources under Canadian standards is
not comparable to similar information made public by United States
companies subject to the reporting and disclosure requirements of
the United States Securities and Exchange Commission.
An "Inferred Mineral Resource" has a great amount of uncertainty
as to its existence and as to its economic and legal feasibility.
Under Canadian rules, estimates of inferred mineral resources may
not form the basis of feasibility or pre-feasibility studies. It
cannot be assumed that all or any part of an "Inferred Mineral
Resource" will ever be upgraded to a higher confidence category.
Readers are cautioned not to assume that all or any part of an
"Inferred Mineral Resource" exists or is economically or legally
mineable.
Under United States standards, mineralization may not be
classified as a "Reserve" unless the determination has been made
that the mineralization could be economically and legally produced
or extracted at the time the reserve estimation is made. Readers
are cautioned not to assume that all or any part of the measured or
indicated mineral resources will ever be converted into mineral
reserves. In addition, the definitions of "Proven Mineral Reserves"
and "Probable Mineral Reserves" under CIM standards differ in
certain respects from the standards of the United States Securities
and Exchange Commission.
Non-GAAP Financial Performance Measures
All-in sustaining costs (AISC) per equivalent gold ounce, total
cash costs per gold ounce and per gold equivalent ounce, sustaining
capital and growth capital, Adjusted net earnings/(loss), operating
cash flows generated from operations, before changes in non-cash
operating working capital and average realized price and are
non-GAAP financial measures that do not have a standardized meaning
under IFRS and may not be comparable to similar measures presented
by other mining companies. It should not be considered in isolation
or as a substitute for measures of performance prepared in
accordance with IFRS. The Company believes that these measures,
together with measures determined in accordance with IFRS, provide
investors with an improved ability to evaluate the underlying
performance of the Company. In addition, certain non-GAAP measures
are utilized, along with other measures, in the Company scorecard
to set incentive compensation goals and assess performance of its
executives.
All-In Sustaining Costs per Gold Equivalent Ounce
"All-in sustaining costs per gold equivalent ounce” is a
non-GAAP financial measure. Consistent with guidance announced in
2013 by the World Gold Council, an association of various gold
mining companies from around the world New Gold defines "all-in
sustaining costs" per ounce as the sum of total cash costs, capital
expenditures that are sustaining in nature, corporate general and
administrative costs, capitalized and expensed exploration that is
sustaining in nature, lease payments that are sustaining in nature,
and environmental reclamation costs, all divided by the ounces of
gold equivalent sold to arrive at a per ounce figure.
In addition to gold the Company produces copper and silver. Gold
equivalent ounces of copper and silver produced in a quarter are
computed by calculating the ratio of the average spot market copper
and silver prices to the average spot market gold price in a
quarter and multiplying this ratio by the pounds of copper and
silver ounces produced during that quarter. Gold equivalent ounces
produced in a period longer than one quarter are calculated by
adding the number of gold equivalent ounces in each quarter of that
period. Notwithstanding the impact of copper and silver sales, as a
Company focused on gold production, New Gold aims to assess the
economic results of its operations in relation to gold, which is
the primary driver of New Gold’s business.
New Gold believes this non-GAAP financial measure provides
further transparency into costs associated with producing gold and
assists analysts, investors and other stakeholders of the Company
in assessing the Company's operating performance, its ability to
generate free cash flow from current operations and its overall
value. This data is furnished to provide additional information and
is a non-GAAP financial measure. All-in sustaining costs presented
do not have a standardized meaning under IFRS and may not be
comparable to similar measures presented by other mining companies.
It should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS and is not
necessarily indicative of cash flow from operations under IFRS or
operating costs presented under IFRS.
"Sustaining costs" is a non-GAAP financial measure. New Gold
defines sustaining costs as the difference between all-in
sustaining costs and total cash costs, being the sum of net capital
expenditures that are sustaining in nature, corporate general and
administrative costs, capitalized and expensed exploration that is
sustaining in nature, lease payments that are sustaining in nature.
and environmental reclamation costs. New Gold terms non-sustaining
capital costs to be “growth capital”. Management uses sustaining
costs to understand the aggregate net result of the drivers of
all-in sustaining costs other than total cash costs. The line items
between cash costs and all-in sustaining costs in the tables below
break down the components of sustaining costs. Sustaining costs is
intended to provide additional information only, does not have any
standardized meaning under IFRS, and may not be comparable to
similar measures presented by other mining companies. It should not
be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS.
Total Cash Costs
"Total cash costs per ounce” and total cash costs per gold
equivalent ounce are non-GAAP financial measures which are
calculated in accordance with a standard developed by The Gold
Institute, a worldwide association of suppliers of gold and gold
products that ceased operations in 2002. Adoption of the standard
is voluntary and the cost measures presented may not be comparable
to other similarly titled measures of other companies. New Gold
reports total cash costs on a sales basis. The Company believes
that certain investors use this information to evaluate the
Company's performance and ability to generate liquidity through
operating cash flow to fund future capital expenditures and working
capital needs. This measure, along with sales, is considered to be
a key indicator of the Company's ability to generate operating
earnings and cash flow from its mining operations. Total cash costs
include mine site operating costs such as mining, processing and
administration costs, royalties, production taxes, but are
exclusive of amortization, reclamation, capital and exploration
costs. Total cash costs per gold ounce are net of by-product sales
and are divided by gold ounces sold to arrive at a per ounce
figure. Total cash costs per gold equivalent ounce are divided by
gold equivalent ounces sold to arrive at a per ounce figure.
Unless otherwise indicated, all total cash cost information in
this news release is on a gold equivalent ounce basis. Gold
equivalent ounces of copper and silver produced in a quarter are
computed by calculating the ratio of the average spot market copper
and silver prices to the average spot market gold price in a
quarter and multiplying this ratio by the pounds of copper and
silver ounces produced during that quarter. Gold equivalent ounces
produced in a period longer than one quarter are calculated by
adding the number of gold equivalent ounces in each quarter of that
period. This data is furnished to provide additional information
and is a non-GAAP financial measure. Total cash costs presented do
not have a standardized meaning under IFRS and may not be
comparable to similar measures presented by other mining companies.
It should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS and is not
necessarily indicative of cash flow from operations under IFRS or
operating costs presented under GAAP.
Adjusted Net Earnings/(Loss)
"Adjusted net earnings/(loss)" and "adjusted net earnings/(loss)
per share" are non-GAAP financial measures. Net earnings/(loss)
have been adjusted and tax affected for the group of costs in
"Other gains and losses" on the condensed consolidated income
statement. The adjusted entries are also impacted for tax to the
extent that the underlying entries are impacted for tax in the
unadjusted net earnings/(loss) from continuing operations. The
Company uses this measure for its own internal purposes.
Management's internal budgets and forecasts and public guidance do
not reflect items which are included in other gains and losses.
Consequently, the presentation of adjusted net earnings and
adjusted net earnings per share enables investors and analysts to
better understand the underlying operating performance of our core
mining business through the eyes of management. Management
periodically evaluates the components of adjusted net earnings and
adjusted net earnings per share based on an internal assessment of
performance measures that are useful for evaluating the operating
performance of our business and a review of the non-GAAP measures
used by mining industry analysts and other mining companies.
Adjusted net (loss)/earnings and adjusted net (loss)/earnings per
share are intended to provide additional information only and do
not have any standardized meaning under IFRS and may not be
comparable to similar measures presented by other companies. They
should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS. The
measures are not necessarily indicative of operating profit or cash
flows from operations as determined under IFRS.
Operating Cash Flows Generated from Operations, before
Changes in Non-Cash Operating Working Capital
“Operating cash flows generated from operations, before changes
in non-cash operating working capital” is a non-GAAP financial
measure with no standard meaning under IFRS, which excludes changes
in non-cash operating working capital. Management uses this measure
to evaluate the Company’s ability to generate cash from its
operations before temporary working capital changes.
Operating cash flows generated from operations, before non-cash
changes in working capital is intended to provide additional
information only and does not have any standardized meaning under
IFRS; it should not be considered in isolation or as a substitute
for measures of performance prepared in accordance with IFRS. Other
companies may calculate this measure differently and this measure
is unlikely to be comparable to similar measures presented by other
companies.
Average Realized Price
"Average realized price per ounce or pound sold" is a non-GAAP
financial measure with no standard meaning under IFRS.
Management uses this measure to better understand the price
realized in each reporting period for gold, silver, and copper
sales. Average realized price is intended to provide additional
information only and does not have any standardized definition
under IFRS; it should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS. Other companies may calculate this measure differently and
this measure is unlikely to be comparable to similar measures
presented by other companies.
For additional information with respect to the non-GAAP measures
used by the Company, including reconciliation to the nearest IFRS
measures, refer to the detailed Non-GAAP performance measure
disclosure in the Management’s Discussion and Analysis for the year
ended December 31, 2018 filed at www.sedar.com and on EDGAR at
www.sec.gov.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190425005170/en/
Anne DayVice President, Investor RelationsDirect: +1
(416) 324-6003Email: anne.day@newgold.com
Julie TaylorDirector, Corporate Communications and
Investor RelationsDirect: +1 (416) 324-6015Toll free: +1 (888)
315-9715Email: info@newgold.com
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