Heather Latter
Given the results of New Gold’s feasibility study and its final Environmental Assessment report, both released last week, it’s evident the company is forging ahead with plans to build a mine at its Rainy River Project site north of Barwick—despite the recent drop in gold prices.
“New Gold has obviously been excited to purchase this project from Rainy River Resources,” noted Kyle Stanfield, director of environment and sustainability.
“And really what they wanted to do is just make sure all of the project economics are consistent with market expectations, given the changes in gold prices, particularly the last six months of 2013,” he explained.
“Last year we saw some considerable decline in gold price and a lot of that was tied to the potential upside to the U.S. economy,” Stanfield continued.
“But gold is still certainly showing a very strong and robust value in and around $1,200 [U.S./oz].
“We think it’s going to go higher and the analysts do, as well,” he remarked.
Stanfield indicated the feasibility study reaffirms the economic viability of the Rainy River Project.
“We wanted to make sure that we were recognizing some of the improvements in supplier costs,” he said about some of the study’s minor adjustments.
“Some of the suppliers, including Caterpillar and others that supply heavy equipment, and others that supply . . . everything you need to build a processing plant, a lot of these suppliers have seen reductions in their orders in recent months,” Stanfield noted.
“So what that meant for us is we could adjust our cost base against what we had done previously.
“It gives us a much better picture of where we sit today when we’re ready to start ordering the heavy equipment in the next six months, so it’s an important step for us,” he stressed.
Stanfield also said that while the final Environmental Assessment has been released, people still can comment on it until the end of February.
“We say final EA, it’s kind of a pre-final,” he explained. “If people feel they still want to see some adjustments, there may be some opportunity for updating the report.
“But really at this point the project is fixed,” Stanfield added. “We have detailed designs for the mine now.
“The EA is based on those detailed designs.
“Really, what we’re going to be looking for in commentary is final support for the project so we can stay on schedule to get our permits by the end of this year,” he remarked.
Stanfield said the draft Environmental Assessment report was released last summer and the company updated it based on all the comments received.
“We had close to 1,000 comments from agencies, First Nations, Métis, [and] non-governmental organizations,” he noted.
“Most of the comments were related to things like making sure water quality is protected; making sure aboriginal rights are protected.
“We also had comments about ensuring the tax base in Barwick is supported,” Stanfield added, noting Barwick is very worried about its tax base given tax reductions that all municipalities are seeing in the current economic environment.
“We’re trying our best to balance all those concerns across the board and at the end of the day, we want to employee people, we want people to have great jobs, and we want to make sure the district is better off in the short- and long-term,” he reasoned.
“That’s a big order to ask for but we’re going to do our best to continue to support that goal,” Stanfield vowed.
“And that is the goal of sustainability—to end up somewhere better than you were before you started.”
Stanfield added the schedule for the mine remains on target, with the two-year construction period expected to start in just 12 months.
“There’s always risks in the marketplace,” he cautioned. “It’s hard for us to understand that and remember that. . . .
[But] our hope is we get this thing built on time, that we don’t have a delay with the environmental assessment in the approval process, so that we can get our shovels in and get it built and the mine running.
“We have a 14-year mine life today, but I know that mine life is going to continue a lot longer as long as the gold price stays robust,” he predicted.
In fact, Stanfield noted several company employees and their families have relocated to both Fort Frances and Emo.
“We have our own technical people that are starting to come on and move into the area to prepare and lay that groundwork,” he explained.
“It is a risk for them because we don’t have the project started yet.
“But I think that for the district residents, once they see the project construction starting, you’re going to start to see those people come back and that’s what is exciting for many local residents,” Stanfield said.
“Myself and others who have been on this project for four years now have always said that many skilled people who are from the Rainy River District are going to come back to want to be employed with this project once the construction is started,” he reiterated.
“I’ve always felt that a big advantage of this project is that there is a ready workforce there that wants to stay in the district or wants to come back to be their families, to be with their parents, and to have that family time,” he stressed.
Meanwhile, a pair of open houses have been scheduled in order for New Gold to share details of the Environmental Assessment.
The first is set for next Tuesday (Jan. 28) from 4-7 p.m. at the Barwick Hall, with a second slated for next Wednesday (Jan. 29) at La Place Rendez-Vous here from 4-7 p.m.
For more information, visit www.newgold.com or call New Gold’s Emo office at 482-2501.
