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NEW GOLD REPORTS FOURTH QUARTER AND FULL YEAR 2023 RESULTS

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NEW GOLD REPORTS FOURTH QUARTER AND FULL YEAR 2023 RESULTS

 

 

 

 

 

Achieves Top End of Consolidated Production Guidance and Midpoint of All-In Sustaining Cost Guidance

 

New Gold Inc. (TSX: NGD) (NYSE American: NGD) reports fourth quarter and full year 2023 results. Full year 2023 production totaled 423,517 gold equivalent1 ounces at all-in sustaining costs2 of $1,545 per gold eq. ounce, achieving the top end of the Company’s 2023 gold equivalent production guidance range. Another solid quarterly performance delivered strong cash flow from operations of $71 million and positive free cash flow, while still investing in and advancing growth projects that are expected to significantly increase production in the coming years.

 

Focus on Operational Excellence Leads to Achieving 2023 Production and Cost Guidance Ranges

 

“2023 was a successful year for New Gold. We executed on our key priority of stabilizing our operations and delivered consistent results throughout the year,” stated Patrick Godin, President and CEO. “As a result, New Gold achieved the top end of its 2023 gold equivalent production guidance, and the midpoint of all-in sustaining cost guidance set out at the start of 2023. The Company was able to once again demonstrate the free cash flow generation potential in the fourth quarter, despite the capital investment in our projects.”

  • Fourth quarter consolidated gold eq.1 production of 105,082 ounces (79,187 ounces of gold, 12.0 million pounds of copper and 157,788 ounces of silver) at all-in sustaining costs2 of $1,575 per gold eq. ounce.
  • Full year consolidated gold eq.1 production was 423,517 ounces (321,178 ounces of gold, 47.4 million pounds of copper and 593,146 ounces of silver), achieving the top end of 2023 consolidated production guidance.
  • Full year consolidated all-in sustaining costs2 of $1,545 per gold eq. ounce achieved the midpoint of 2023 consolidated cost guidance.
  • During the fourth quarter, the Company generated positive free cash flow2 of $1 million after investing over $61 million in advancing growth projects. Rainy River had another excellent quarter generating $24 million in free cash flow2, net of $24 million in capital expenditures and $7 million in stream payments.

 

2024 an Inflection Point as Growth Projects Set for Completion, Company Expected to Enter Prolonged Free Cash Flow Generation Period in the Second Half of the Year

 

“Last week we outlined our Operational Outlook for the next three years highlighting an approximately 35% increase in gold production and approximately 60% increase in copper production by 2026. As we work towards completing our growth projects this year, the reduction in operating costs and capital expenditures should see consistent free cash flow generation commencing in the second half of this year. This free cash flow growth is expected to increase over the next three years in-line with our increasing production profiles. We have reached the free cash flow inflection point, and I look forward to sharing progress throughout the year,” added Mr. Godin.

  • 2024 consolidated gold production is expected to be 310,000 to 350,000 ounces, compared to 321,178 in 2023. Production is expected to strengthen in the second half of the year, with the second half of 2024 expected to represent approximately 60% of annual production as waste stripping at Rainy River is sequenced in the first half of the year. 2024 copper production is expected to be 50 to 60 million pounds, approximately 16% higher than 2023 driven by increased contribution from C-Zone at New Afton.
  • 2024 total capital is expected to be $290 to $330 million, as growth projects at both operations are completed in the year. Commercial production at C-Zone remains on-track for the second half of 2024, along with commissioning of the underground crusher and conveyor. Initial production from Rainy River’s underground Main Zone remains on-track for the fourth quarter of 2024.
  • 2024 is expected to be the final year of significant capital spending, as the Company starts to realize the benefits of these expenditures. As a result, consolidated gold production is expected to increase by approximately 35% over 2023 to 410,000 to 460,000 ounces in 2026. Copper production is expected to increase by approximately 60% compared to 2023 to 71 to 81 million pounds in 2026. All-in sustaining costs (on a by-product basis)2 are expected to decrease by over 50% compared to 2023 to between $650 and $750 per ounce in 2026.
  • The higher production, lower total cash costs, and lower capital spend over the next three years are expected to drive significant free cash flow for the Company.

 

Consolidated Financial Highlights

 

Q4 2023 Q4 2022 FY 2023 FY 2022
Revenue ($M) 199.2 162.8 786.5 604.4
Operating expenses ($M) 120.8 108.5 450.4 382.7
Net (loss) earnings ($M) (27.4) (16.9) (64.5) (66.8)
Net (loss) earnings per share ($) (0.04) (0.02) (0.09) (0.10)
Adj. net (loss) earnings ($M)2 (4.7) (6.3) 48.4 (26.1)
Adj. net (loss) earnings, per share ($)2 (0.01) (0.01) 0.07 (0.04)
Cash generated from operations ($M) 70.6 31.9 287.6 190.7
Cash generated from operations, per share ($) 0.10 0.05 0.42 0.28
Cash generated from operations, before changes in non-cash operating working capital ($M)2 64.9 44.3 293.4 181.6
Cash generated from operations, before changes in non-cash operating working capital, per share ($)2 0.09 0.06 0.43 0.27
  • Revenue increased over the prior-year periods primarily due to higher sales volumes and higher gold prices, partially offset by lower copper prices.
  • Operating expenses were higher than the prior-year periods due to higher production.
  • Net loss for the quarter increased over the prior-year period primarily due to higher unrealized losses on the revaluation of the Rainy River gold stream obligation and the New Afton free cash flow interest obligation, partially offset by higher revenue. For the year ended December 31, 2023, net loss was consistent compared to the prior-year period.
  • Adjusted net earnings2 for the quarter was consistent compared to the prior-year period. For the year ended December 31, 2023, adjusted net earnings2 increased compared to the prior-year period primarily due to higher revenue and lower finance costs, partially offset by higher operating expenses, and depreciation and depletion.
  • Cash generated from operations increased over the prior-year periods primarily due to higher revenue.

 

Consolidated Operational Highlights

 

Q4 2023 Q4 2022 FY 2023 FY 2022
Gold eq. production (ounces)1,3 105,082 97,824 423,517 347,054
Gold eq. sold (ounces)1,3 103,504 95,161 415,181 342,839
Gold production (ounces)3 79,187 80,694 321,178 271,373
Gold sold (ounces)3 77,870 78,507 319,116 269,147
Copper production (Mlbs)3 12.0 6.9 47.4 31.1
Copper sold (MIbs)3 11.9 6.8 44.4 30.2
Gold revenue, per ounce ($)4 1,977 1,736 1,920 1,791
Copper revenue, per pound ($)4 3.52 3.53 3.61 3.70
Average realized gold price, per ounce ($)2 2,001 1,751 1,944 1,808
Average realized copper price, per pound ($)2 3.72 3.74 3.84 3.94
Operating expenses, per gold eq. ounce ($)4 1,167 1,140 1,085 1,116
Total cash costs, per gold eq. ounce ($)2 1,209 1,167 1,128 1,150
Depreciation and depletion, per gold eq. ounce ($)4 640 551 566 572
All-in sustaining costs, per gold eq. ounce ($)2 1,575 1,668 1,545 1,818
Sustaining capital ($M)2 24.1 34.1 121.6 183.6
Growth capital ($M)2 36.5 37.1 144.3 109.2
Total capital ($M) 60.6 71.2 265.9 292.8

 

Rainy River Mine

 

Operational Highlights

 

Rainy River Mine Q4 2023 Q4 2022 FY 2023 FY 2022
Gold eq. production (ounces)1,3 64,290 71,221 259,679 235,194
Gold eq. sold (ounces)1,3 62,650 68,392 260,897 233,788
Gold production (ounces)3 62,692 69,753 253,745 229,822
Gold sold (ounces)3 61,086 66,992 254,932 228,565
Gold revenue, per ounce ($)4 1,999 1,748 1,939 1,807
Average realized gold price, per ounce ($)2 1,999 1,748 1,939 1,807
Operating expenses, per gold eq. ounce ($)4 1,222 1,014 1,091 985
Total cash costs, per gold eq. ounce ($)2 1,222 1,014 1,091 985
Depreciation and depletion, per gold eq. ounce ($)4 769 559 640 634
All-in sustaining costs, per gold eq. ounce ($)2 1,600 1,467 1,554 1,605
Sustaining capital ($M)2 20.2 26.2 102.8 127.1
Growth capital ($M)2 4.2 4.2 17.8 17.7
Total capital ($M) 24.5 30.4 120.6 144.8

 

Operating Key Performance Indicators

 

Rainy River Mine Q4 2023 Q4 2022 FY 2023 FY 2022
Open Pit Only
Tonnes mined per day (ore and waste) 109,895 110,536 119,948 112,826
Ore tonnes mined per day 29,377 34,667 34,007 22,965
Operating waste tonnes per day 47,838 56,547 53,537 39,017
Capitalized waste tonnes per day 32,681 19,323 32,404 50,843
Total waste tonnes per day 80,519 75,870 85,942 89,860
Strip ratio (waste:ore) 2.74 2.19 2.53 3.91
Open Pit and Underground
Tonnes milled per calendar day 25,046 22,225 24,012 23,568
Gold grade milled (g/t) 0.94 1.16 0.99 0.91
Gold recovery (%) 90 92 91 91
  • Fourth quarter gold eq.1 production was 64,290 ounces (62,692 ounces of gold and 127,138 ounces of silver), a decrease over the prior-year period due to lower gold grade and recovery, partially offset by higher tonnes processed. Full year gold eq.1 production was 259,679 ounces (253,745 ounces of gold and 472,018 ounces of silver), an increase over the prior year primarily due to higher tonnes processed and higher gold grade. Full year gold eq.1 production achieved the top end of the 2023 guidance range of 235,000 to 265,000 ounces.
  • Operating expense4 per gold eq. ounce for the quarter increased over the prior-year period due to lower sales volume. Full year operating expense per gold eq. ounce increased over the prior-year period due to lower capitalized tonnes, and increased costs associated with mill maintenance, partially offset by higher sales volume. Full year operating expense per gold eq. ounce was above the annual guidance range of $905 to $985 per gold eq. ounce as a result of the lower capitalized tonnes, previously outlined in the Company’s third quarter 2023 earnings release.
  • All-in sustaining costs2 per gold eq. ounce for the quarter increased over the prior-year period primarily due to lower sales volume, partially offset by a lower sustaining capital. Full year all-in sustaining costs2 per gold eq. ounce decreased over the prior-year period primarily from higher sales volume and lower sustaining capital. Full year all-in sustaining costs2 per gold eq. ounce was within the 2023 guidance range of $1,475 to $1,575 per gold eq. ounce.
  • Total capital for the quarter and full year was $24 million and $121 million, respectively, a decrease over the prior-year periods due to lower capitalized waste mining costs in the year, and lower capital development in the Intrepid underground zone. Sustaining capital2 primarily related to capitalized waste and tailings dam raise. Growth capital2 is related to the continued development of the Intrepid underground zone. Full year total capital is below the 2023 guidance range of $145 million to $165 million, with $25 million of capitalized waste deferred to 2024.
  • Free cash flow2 for the quarter and year ended December 31, 2023 was $24 million and $55 million (net of $7 million and $29 million stream payments), respectively, an improvement over the prior-year periods primarily due to higher revenue and a decrease in capital expenditures.

 

New Afton Mine

 

Operational Highlights

 

New Afton Mine Q4 2023 Q4 2022 FY 2023 FY 2022
Gold eq. production (ounces)1,3 40,792 26,603 163,838 111,860
Gold eq. sold (ounces)1,3 40,853 26,769 154,284 109,051
Gold production (ounces)3 16,495 10,941 67,433 41,551
Gold sold (ounces)3 16,784 11,514 64,185 40,582
Copper production (Mlbs)3 12.0 6.9 47.4 31.1
Copper sold (Mlbs)3 11.9 6.8 44.4 30.2
Gold revenue, per ounce ($)4 1,898 1,668 1,846 1,699
Copper revenue, per ounce ($)4 3.52 3.53 3.61 3.70
Average realized gold price, per ounce ($)2 2,009 1,766 1,964 1,808
Average realized copper price, per pound ($)2 3.72 3.74 3.84 3.94
Operating expenses, per gold eq. ounce ($)4 1,081 1,461 1,074 1,395
Total cash costs, per gold eq. ounce ($)2 1,187 1,557 1,191 1,503
Depreciation and depletion, per gold eq. ounce ($)4 439 527 437 434
All-in sustaining costs, per gold eq. ounce ($)2 1,302 1,870 1,331 2,044
Sustaining capital ($M)2 3.8 7.9 18.7 56.5
Growth capital ($M)2 32.2 32.9 126.5 91.5
Total capital ($M) 36.1 40.8 145.2 148.0

 

Operating Key Performance Indicators

 

New Afton Mine Q4 2023 Q4 2022 FY 2023 FY 2022
New Afton Mine Only
Tonnes mined per day (ore and waste) 9,933 7,978 9,771 7,003
Tonnes milled per calendar day 8,181 6,8145 8,289 9,0065
Gold grade milled (g/t) 0.73 0.625 0.72 0.475
Gold recovery (%) 90 865 90 845
Copper grade milled (%) 0.79 0.57 0.77 0.51
Copper recovery (%) 91 87 91 83
Gold eq. production (ounces)1 40,792 26,603 163,838 111,860
Gold production (ounces) 15,942 9,356 62,637 37,788
Copper production (Mlbs) 12.0 6.9 47.4 31.1
Ore Purchase Agreements5
Gold production (ounces) 553 1,585 4,796 3,763
  • Fourth quarter gold eq.1 production was 40,792 ounces (16,495 ounces of gold and 12.0 million pounds of copper), and for the year ended December 31, 2023, gold eq.1 production was 163,838 ounces (67,433 ounces of gold and 47.4 million pounds of copper). The increase over the prior-year periods was due to higher grades and recovery. Full year gold eq.1 production exceeded the 2023 guidance range of 130,000 to 160,000 ounces.
  • Operating expense4 per gold eq. ounce decreased over the prior-year periods, primarily due to higher sales volume. Full year operating expense4 per gold eq. ounce was within the 2023 guidance range of $1,035 to $1,115 per gold eq. ounce.
  • All-in sustaining costs2 per gold eq. ounce decreased over the prior-year periods, primarily due to higher sales volume and lower sustaining capital spend. Full year all-in sustaining costs2 per gold eq. ounce was at the low end of the 2023 guidance range of $1,320 to $1,420 per gold eq. ounce.
  • Total capital for the quarter and full year was $36 million and $145 million, respectively, relatively in-line with prior-year periods. Sustaining capital2 is primarily related to the continuation of tailings management and stabilization activities. Growth capital2 primarily related to C-Zone development, which advanced 1,242 meters during the quarter. Full year total capital is at the low end of the 2023 guidance range of $145 million to $185 million.
  • Free cash flow2 for the quarter and year ended December 31, 2023 was a net outflow of $11 million and $44 million, respectively, an improvement over the prior-year periods primarily due to an increase in revenue and a decrease in capital expenditure.

 

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 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.

 

Endnotes

  1. Total 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 Q4 2023 includes production of 127,138 ounces of silver (124,421 ounces of silver sold) converted to a gold eq. based on a ratio of $1,750 per gold ounce and $22.00 per silver ounce used for 2023 guidance estimates. Gold eq. ounces for New Afton in Q4 2023 includes 12.0 million pounds of copper produced (11.9 million pounds sold) and 30,651 ounces of silver produced (28,838 ounces of silver sold) converted to a gold eq. based on a ratio of $1,750 per gold ounce, $3.50 per copper pound and $22.00 per silver ounce used for 2023 guidance estimates.
  2. “Total cash costs”, “all-in sustaining costs”, “adjusted net earnings/(loss)”, “adjusted tax expense”, “sustaining capital and sustaining leases”, “growth capital”, “cash generated from operations, before changes in non-cash operating working capital”, “free cash flow”, and “average realized gold/copper price per ounce/pound” are all non-GAAP financial performance measures that are used in this news release. These measures do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For more information about these measures, why they are used by the Company, and a reconciliation to the most directly comparable measure under IFRS, see the “Non-GAAP Financial Performance Measures” section of this news release.
  3. Production is shown on a total contained basis while sales are shown on a net payable basis, including final product inventory and smelter payable adjustments, where applicable.
  4. These are supplementary financial measures which are calculated as follows: “revenue per ounce/pound” is revenue divided by gold ounces or copper pounds sold, “operating expenses per gold eq. ounce” is operating expenses divided by gold equivalent ounces sold, “depreciation and depletion per gold eq. ounce” is depreciation and depletion divided by gold equivalent ounces sold, “operating expenses ($/oz gold, co-product)” and “operating expenses ($/lb copper, co-product)” is operating expenses apportioned to each metal produced on a percentage of activity basis, and subsequently divided by the total gold ounces, or pounds of copper sold, as the case may be, to arrive at per ounce or per pound figures.
  5. Key performance indicator data is inclusive of ounces from ore purchase agreements for New Afton. The New Afton Mine purchases small amounts of ore from local operations, subject to certain grade and other criteria. These ounces represented approximately 3% of total gold ounces produced at New Afton during the quarter, and 7% for the year ended December 31, 2023, using New Afton’s excess mill capacity. All other ounces are mined and produced at New Afton.

 

Posted February 14, 2024

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