Press Release
New Gold Inc. last week announced its 2017 third-quarter results and provided an update on the start-up of the company’s Rainy River mine north of Barwick, Ont.
“We are pleased to report that we continued to deliver on our priorities in the third quarter,” stated Hannes Portmann, president and CEO.
“Rainy River began processing ore in September and, since the end of the quarter, has achieved commercial production, ahead of plan,” he noted.
“At the same time, our producing mines continued to deliver operationally, which enabled us to generate $66 million in quarterly cash flow.
“We are proud that the Rainy River Mine has delivered on all of the major development and start-up milestones that our team established in January,” added Portmann.
“As Rainy River has now joined our portfolio of operating mines, our team’s focus shifts to operational execution and optimization of both the near and long-term mine plan.”
As planned, New Gold’s Rainy River Mine commenced processing ore on Sept. 14 and subsequently announced its first gold pour on Oct. 6.
Commercial production was achieved in mid-October.
From an accounting perspective, the company recognizes commercial production effective Nov. 1.
The capital cost estimate remains in line with New Gold’s updated plan announced on Jan. 30.
Mining activities at Rainy River progressed well during the third quarter. The company’s mining rate during the quarter averaged roughly 130,000 tonnes per day, which was in line with New Gold’s plan.
This represents a 13 percent increase compared to the average mining rate of 115,000 tonnes per day in the second quarter of 2017.
More importantly, the mining rate in October averaged roughly 135,000 tonnes per day.
Installation of mechanical, piping, electrical, and instrumentation in processing facilities has been fully completed, with start-up of the process plant successfully achieved on Sept. 14.
All construction-related activity in the process plant is complete.
Overall earthworks are more than 98 percent complete and are tracking in line with New Gold’s plan.
The start-up cell of the tailings management area has been fully completed.
Based on its location and scale, the start-up cell provides capacity for about six months of production tailings with the mill operating at full capacity.
The amendment to Schedule 2 of the Metal Mining Effluent Regulations, required to close two small creeks and deposit tailings, became effective on Sept. 27.
In addition, New Gold has finalized the engineering design to construct the creek closures using sheet pile at the centre of the portion of the dam that will cover the creeks.
The purpose of this approach is both to reduce the construction time and, most importantly, to be able to complete the work regardless of weather conditions.
New Gold has met with the Ontario Ministry of Natural Resources and Forestry to review the design and the permit amendment, and support of the design was received in the third quarter of 2017.
Project spending at Rainy River during the third quarter totalled $130 million, with estimated remaining development capital of roughly $100 million, which includes project working capital post commercial production.
