New Gold has suspended milling ops until it can pump excess water from the tailings management area to the water management pond.
In the late afternoon of April 24, management at the Rainy River mine temporarily shut down the mill to assess a buildup of water in the tailings management area.
Over the next few days, it was determined that 700,000 cubic metres of excess water was stored in the tailings management area. The buildup of excess water was caused by the rapid spring melt and large snow pack in northern Ontario.
To manage the excess water, the company is transferring water from the tailings management area to the water management pond.
The company said extra pumping capacity has been installed and more pumping capacity is being added to expedite the water transfer.
It is expected that the mill will be fully operational within five days, depending on precipitation during this period.
Mining and crushing operations have not been impacted, with ore being stockpiled for processing when the mill is restarted.
In related news, New Gold now holds 100 percent of the Blackwater Project, located 110 km southwest of Vanderhoof, B.C.
New Gold shares went into freefall last year when the company reduced production forecasts at Rainy River to between 210,000 and 250,000 ounces from an earlier target of between 310,000 and 350,000 ounces. Three years ago, the shares were trading at close to $8.
That prompted a management restructuring that resulted in the elimination of five vice-president positions. The company also reduced its core asset base to two operating assets including the Rainy River and New Afton mines. This follows the divestment of the Mesquite and Peak mines last year.
Yesterday, the company said management anticipates that any production delays stemming from the excess water and mill closure at Rainy River will be offset so that the company will still be in a position to achieve its annual production guidance.
New Gold shares advanced 2.6% or $0.03 to $1.18. The shares trade in a 52-week range of 90 cents and $3.22.
