New Gold Announces Record 2009 Production, Provides 2010 Annual Guidance and
Updates Reserves and Resources
(All figures are in US dollars unless otherwise indicated)
Fourth Quarter and Full Year 2009 Highlights
Results presented below are for the period of ownership for the Mesquite (
- Highest quarterly gold production for the company in the fourth
quarter with an increase of 41% to 111,672 ounces from 78,950 ounces
in the same period in 2008
- Total cash cost(1) in the fourth quarter decreased 17% to $473 per
ounce sold, net of by-product sales, from $567 per ounce sold in the
same period in 2008
- Gold production in 2009 increased 29% to 301,773 ounces from 233,103
ounces in 2008
- Total cash cost(1) in 2009 decreased 18% to $462 per ounce sold, net
of by-product sales, from $566 per ounce sold in 2008
- New Afton achieved its highest quarterly underground advance in 2009
with 634 metres
All three of New Gold's operating mines had excellent gold production results with Cerro San Pedro and Peak Mines also producing silver and copper, respectively, above guidance. As anticipated, the Mesquite mine achieved its highest quarterly production since the mine was brought back into production in
"We are extremely pleased with the company's operating performance in 2009; our operations bettered production and cash cost guidance and New Afton continues on its steady path toward production," stated
Fourth quarter and full year results for 2009 are presented in the table below, for the period of ownership for the Mesquite (
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Full Year Full Year
Q4-2008 Q4-2009 2008 2009
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Production
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Mesquite Gold oz - 61,245 - 99,298
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Cerro San Pedro
Gold oz 21,231 25,781 45,618 95,502
Silver oz 290,520 312,848 572,575 1,496,958
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Peak Mines
Gold oz 27,618 24,646 100,493 93,247
Copper m lbs 2.5 3.9 8.2 15.6
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Amapari Gold oz 30,101 - 86,992 13,726
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Total Production
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Gold oz 78,950 111,672 233,103 301,773
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Copper m lbs 2.5 3.9 8.2 15.6
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Silver oz 290,520 312,848 572,575 1,496,958
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Gold sales oz 78,194 106,475 237,586 292,407
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Total cash cost/oz $567 $473 $566 $462
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2010 Guidance
As New Gold looks forward to 2010, the company expects to realize an increase in gold production primarily resulting from the benefit of a full year of production from Mesquite. The company also expects increased production of silver and copper helping to further reduce costs when compared to 2009.
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Mine Actual 2009 Forecast 2010 Actual 2009 Forecast 2010
Gold Gold Total Cash Total Cash
Production (oz.) Production (oz.) Cost(1) Cost(1)
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Mesquite 99,298 145,000-155,000 $596 $540-$560
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Cerro
San Pedro 95,502 95,000-105,000 $405 $390-$410
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Peak Mines 93,247 90,000-100,000 $335 $360-$380
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Amapari 13,726 -- $696 --
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Total 301,773 330,000-360,000 $462 $445-$465
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Note: Cerro San Pedro and Peak Mines total cash cost(1) are net of
by-product sales. Amapari was put on Care and Maintenance on January 2,
2009.
Assumptions used in the 2010 forecast include silver and copper prices of
Reserve and Resource Update
At
- Mesquite gold reserves increased by 19% to 3.1 million ounces from
2.6 million ounces
- Cerro San Pedro gold reserves increased by 11% to 1.4 million ounces
from 1.3 million ounces
- Cerro San Pedro Measured and Indicated resources, inclusive of
reserves, increased by 33% to 2.3 million ounces from 1.7 million
ounces, attributable to the addition of 0.9 million ounces of sulphide
resources
- Peak Mines continued its long history of reserve replacement with
December 31, 2009 gold reserves of 0.6 million ounces more than
replacing the ounces mined during 2009
"We are pleased with the increase in reserves as we began the year with 7.4 million ounces, mined approximately 0.5 million ounces and added 1.3 million ounces," stated
For additional detail on Reserves and Resources, including related disclosure, please refer to section entitled Detailed Reserve and Resource Summary at the conclusion of the press release.
Fourth Quarter and 2009 Operations Overview and 2010 Guidance
Historical results presented below include gold production, sales and total cash cost(1) for the full year of 2009 and 2008 which includes periods prior to the acquisition of the Mesquite (
Mesquite Mine Achieves Record Production
Gold production in the fourth quarter at Mesquite increased by 116% to 61,245 ounces from 28,378 ounces produced in the fourth quarter 2008. Gold sales were 55,861 ounces compared to 30,625 ounces in the same period 2008. Consistent with expectations, in the fourth quarter 2009, Mesquite achieved its highest quarterly gold production since its
Total cash cost(1) per ounce of gold sold for the fourth quarter of 2009 was
For full year 2009, gold production increased by 38% to 150,002 ounces from 108,325 ounces produced in 2008. Gold sales were 143,508 ounces compared to 110,880 in 2008. As Mesquite transitioned into its second year of production, operations benefited from increased recoveries from secondary leaching and more tonnes placed on the leach pad.
Total cash cost(1) per ounce of gold sold for full year 2009 was
The Mesquite mine is forecast to produce 145,000 to 155,000 ounces of gold in 2010 at total cash cost(1) of
Cerro San Pedro Mine Achieves Guidance Despite Temporary Shutdown
Gold production in the fourth quarter at Cerro San Pedro increased by 21% to 25,781 ounces from 21,231 ounces produced in the fourth quarter of 2008. Gold sales were 24,455 ounces compared to 21,180 ounces in the same period in 2008. The increase in production was due to increased tonnes of ore mined and further improved leach pad recoveries. Silver production increased in the fourth quarter to 312,848 ounces from 290,520 ounces in the fourth quarter of 2008. The increase in silver production over the same quarter in 2008 can be attributed to higher tonnes of ore mined and increased silver recoveries during the quarter.
Total cash cost(1) per ounce of gold sold, net of by-product sales, for the fourth quarter was
For full year 2009, gold production increased by 13% to 95,502 ounces from 84,561 ounces produced in 2008. Gold sales were 93,312 ounces compared to 85,362 ounces in 2008. The increase in gold production was due to higher tonnes placed on the pad which was partially offset by lower gold grade. For full year 2009, silver production was 1.5 million ounces compared to 1.1 million ounces produced in 2008. The increase in silver production year over year was attributable to higher silver grade and tonnes mined during this period as well as higher recoveries from secondary leaching.
Total cash cost(1) per ounce of gold sold, net of by-product sales, for full year 2009 was
Cerro San Pedro is forecast to produce 95,000 to 105,000 ounces of gold and 1.4 to 1.6 million ounces of silver in 2010. Total cash cost(1) is forecast to be
Peak Mines Continues Steady Performance
Gold production in the fourth quarter at Peak Mines was 24,646 ounces versus 27,618 ounces produced in the fourth quarter of 2008. Gold sales were 26,159 ounces compared to 28,815 ounces in the same period in 2008. Ore tonnes, gold grade and recoveries were similar to those experienced in the same period of the prior year. Copper production increased by 56% in the fourth quarter to 3.9 million pounds from 2.5 million pounds in the fourth quarter of 2008. The increase in copper production over the same quarter in 2008 was a result of mining in higher grade copper zones.
Total cash cost(1) per ounce of gold sold, net of by-product sales, for the fourth quarter was
For full year 2009, gold production was 93,247 ounces compared to 100,493 ounces produced in 2008. Gold sales were 87,812 ounces compared to 102,929 ounces in 2008. The decrease in gold production was primarily due to a lower average realized gold grade when compared to 2008. For full year 2009, copper production increased 90% to 15.6 million pounds from 8.2 million pounds produced in 2008. The increase in copper production year over year was attributable to mining of higher grade copper zones during the year.
Total cash cost(1) per ounce of gold sold, net of by-product sales, for full year 2009 was
Peak Mines is forecast to produce 90,000 to 100,000 ounces of gold and 15 to 17 million pounds of copper in 2010. Total cash cost(1) is forecast to be
New Afton Project Progressing Toward Production
New Gold's primary development project continued on schedule during the fourth quarter and is expected to commence production in the second half of 2012. The project will be an underground mine and concentrator which will produce an annual estimated average of 85,000 ounces of gold, and 75 million pounds of copper over a 12 year mine life.
During the fourth quarter of 2009, the New Afton underground development crews achieved their highest quarterly advance this year, completing 634 metres compared to 453 metres during the third quarter of 2009. For full year 2009, 1,708 metres of underground development were completed.
Major surface construction activities will resume in 2011 once the underground development has reached the bottom of the ore body. Project engineering work is approximately 92% complete and will not advance further until the resumption of surface construction.
2010 development at New Afton will continue to focus on underground development with projected capital expenditures for the year totalling
El Morro Project - Unlocking Additional Value
As announced on
The transaction not only allows New Gold to continue its 30% participation in the highly-regarded El Morro project, but also significantly enhances the economic terms of the Shareholders Agreement. A summary of the terms is shown in the table below:
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Agreement Revisions
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Original Agreement Revised Agreement
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Upfront Payment -- $50 million
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Percentage of New Gold's
30% share of development
capital carried 70% 100%
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Interest charged Xstrata cost of capital U.S. 7-year Treasury
on carried funding + 100 basis points Rate + 187 basis points
(Most recently 12.1%) (Most recently 5.2%)
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Initiation of -- Within 60 days of
Construction Guarantee receipt of permits and
approvals (subject to
financial penalty
if not achieved)
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Note: Xstrata cost of capital and U.S. 7-year Treasury Rate sourced from
Bloomberg on January 7, 2010
On
New Gold is unaware of any fact or circumstance that would support any of the allegations being made by Barrick and believes that the claim is without merit. New Gold intends to respond to this action using all available legal avenues.
Amapari
The Amapari mine remains under strategic review after it was put on care and maintenance in early 2009. New Gold is exploring various alternatives and will provide further updates to the market in due course.
Key Financial Information
At
In
New Gold's cash balance, combined with the future cash flow generation of the company and the long-term nature of the majority of the debt leaves the company in a solid financial position.
Detailed Reserve and Resource Summary
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Mineral Reserves and Resources Summary as of December 31, 2009
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Contained Metals
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Gold Silver Copper Zinc Lead
(Koz) (Koz) (Mlbs) (Mlbs) (Mlbs)
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Reserves
Proven 3,463 31,200 930 - -
Probable 4,716 25,012 1,844 - -
----- ------ -----
Total P&P 8,179 56,212 2,774 - -
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Resources
Measured 5,694 44,774 1,935 332 79
Indicated 7,841 39,823 1,746 660 123
----- ------ ----- --- ---
Total M&I 13,536 84,597 3,680 992 203
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Inferred 6,817 102,713 541 3,245 500
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See Notes to Mineral Reserve & Resource Statements below for further
detail on Reserve and Resource calculations.
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Mineral Reserve Statement as of December 31, 2009
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Metal Grade Contained Metal
-------------------------------------------------------------------------
Tonnes Gold Silver Copper Gold Silver Copper
000's g/t g/t % Koz Koz Mlbs
-------------------------------------------------------------------------
Mesquite
Proven 73,522 0.60 - - 1,411 - -
Probable 93,287 0.58 - - 1,725 - -
------ ---- -----
Mesquite P&P 166,809 0.58 - - 3,137 - -
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Cerro San Pedro
Proven 42,709 0.61 22.41 - 838 30,772 -
Probable 35,452 0.50 18.79 - 570 21,417 -
------ ---- ----- --- ------
CSP P&P 78,161 0.56 20.77 - 1,408 52,189 -
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Peak Mine
Proven 1,212 3.92 11.00 0.79 153 429 21
Probable 2,598 5.00 6.00 0.80 418 501 46
----- ---- ---- ---- --- --- --
Peak P&P 3,810 4.66 7.59 0.80 570 930 67
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New Afton
Proven - - - - - - -
Probable 47,400 0.69 2.03 0.95 1,052 3,094 993
------ ---- ---- ---- ----- ----- ---
New Afton P&P 47,400 0.69 2.03 0.95 1,052 3,094 993
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El Morro 100% Basis 30% Basis
---------------------------------------------------------
Proven 208,473 0.53 - 0.66 1,062 - 909
Probable 241,761 0.41 - 0.50 951 - 806
------- ---- ---- --- ---
El Morro P&P 450,234 0.46 - 0.58 2,013 - 1,715
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See Notes to Mineral Reserve & Resource Statements below for further
detail on Reserve and Resource calculations.
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Mineral Resource Statement (Inclusive of Reserves)
as of December 31, 2009
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Metal Grade
-------------------------------------------------------------------------
Tonnes Gold Silver Copper Zinc Lead
000's g/t g/t % % %
-------------------------------------------------------------------------
Mesquite
Measured 111,576 0.52 - - - -
Indicated 185,363 0.50 - - - -
------- ----
Mesquite M&I 296,939 0.51 - - - -
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Cerro San Pedro
Measured (oxide) 48,254 0.52 19.72 - - -
Indicated (oxide) 43,861 0.39 14.79 - - -
------ ---- -----
CSP M&I (oxide) 92,115 0.46 17.38 - - -
Measured
(sulphide) 18,739 0.53 17.10 - 0.80 0.19
Indicated
(sulphide) 42,307 0.42 11.79 - 0.71 0.13
------ ---- ----- ---- ----
CSP M&I (sulphide) 61,046 0.46 13.42 - 0.74 0.15
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Peak Mine
Measured 2,453 3.70 9.00 1.05 - -
Indicated 3,614 4.80 7.00 0.88 - -
----- ---- ---- ----
Peak M&I 6,067 4.36 7.81 0.95 - -
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New Afton
Measured 35,100 0.91 2.80 1.26 - -
Indicated 29,900 0.67 2.20 0.85 - -
------ ---- ---- ----
New Afton M&I 65,000 0.80 2.52 1.07 - -
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El Morro 100% basis
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Measured 211,164 0.54 - 0.65 - -
Indicated 347,242 0.46 - 0.49 - -
------- ---- ----
El Morro M&I 558,406 0.49 - 0.55 - -
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Amapari
Measured 8,949 1.00 - - - -
Indicated 17,948 1.65 - - - -
------ ----
Amapari M&I 26,897 1.43 - - - -
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Mineral Resource Statement (Inclusive of Reserves)
as of December 31, 2009
----------------------------------------------------------------
Contained Metal
----------------------------------------------------------------
Gold Silver Copper Zinc Lead
Koz Koz Mlbs Mlbs Mlbs
----------------------------------------------------------------
Mesquite
Measured 1,860 - - - -
Indicated 3,004 - - - -
-----
Mesquite M&I 4,865 - - - -
----------------------------------------------------------------
Cerro San Pedro
Measured (oxide) 799 30,600 - - -
Indicated (oxide) 556 20,859 - - -
--- ------
CSP M&I (oxide) 1,355 51,459 - - -
Measured
(sulphide) 320 10,305 - 332 79
Indicated
(sulphide) 576 16,036 - 660 123
--- ------ --- ---
CSP M&I (sulphide) 897 26,341 - 992 203
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Peak Mine
Measured 292 710 57 - -
Indicated 558 813 70 - -
--- --- --
Peak M&I 850 1,523 127 - -
----------------------------------------------------------------
New Afton
Measured 1,027 3,160 975 - -
Indicated 644 2,115 560 - -
--- ----- ---
New Afton M&I 1,671 5,275 1,535 - -
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El Morro 30% basis
----------------------------------------------------------------
Measured 1,108 - 903 - -
Indicated 1,551 - 1,115 - -
----- -----
El Morro M&I 2,659 - 2,018 - -
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Amapari
Measured 288 - - - -
Indicated 952 - - - -
---
Amapari M&I 1,240 - - - -
----------------------------------------------------------------
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Inferred Resource Statement as of December 31, 2009
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Metal Grade
-------------------------------------------------------------------------
Tonnes Gold Silver Copper Zinc Lead
000's g/t g/t % % %
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Mesquite 22,804 0.49 - - - -
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Cerro San Pedro
Inside Mineral
Resource Pit
--------------
Oxides 17,931 0.29 9.69 - - -
Sulphides 20,964 0.33 8.54 - 1.22 0.05
-------------------------------------------------------
Outside Mineral
Resource Pit
---------------
Oxides 86,107 0.27 6.88 - - -
Sulphides 210,669 0.43 8.00 - 0.45 0.07
-------------------------------------------------------
Manto Sulphides 4,470 1.98 114.5 - 6.17 1.61
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Peak Mine 1,999 4.70 5.00 0.75 - -
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New Afton 25,200 0.54 1.70 0.66 - -
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El Morro 100% basis
-------------------------------------------------------
62,335 0.18 - 0.34 - -
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Amapari 17,449 2.20 - - - -
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----------------------------------------------------------------
Inferred Resource Statement as of December 31, 2009
----------------------------------------------------------------
Contained Metal
----------------------------------------------------------------
Gold Silver Copper Zinc Lead
Koz Koz Mlbs Mlbs Mlbs
----------------------------------------------------------------
Mesquite 357 - - - -
----------------------------------------------------------------
Cerro San Pedro
Inside Mineral
Resource Pit
--------------
Oxides 168 5,586 - - -
Sulphides 224 5,758 - 564 22
--- ----- --- --
392 11,614 - 564 22
----------------------------------------------
Outside Mineral
Resource Pit
---------------
Oxides 756 19,054 - - -
Sulphides 2,945 54,161 - 2,073 319
----- ------ ----- ---
3,701 73,215 2,073 319
----------------------------------------------
Manto Sulphides 285 16,456 - 608 159
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Peak Mine 302 321 33 - -
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New Afton 438 1,377 367 - -
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El Morro 30% basis
----------------------------------------------
110 - 141 - -
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Amapari 1,234 - - - -
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See Notes to Mineral Reserve & Resource Statements below for further
detail on Reserve and Resource calculations.
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Notes to Mineral Reserve & Resource Statements
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Mineral reserves are contained within measured and indicated mineral
resources. Measured and indicated mineral resources that are not mineral
reserves do not have demonstrated economic viability. Inferred mineral
resources are not known with the same degree of certainty as measured and
indicated resources, do not have demonstrated economic viability, and are
exclusive of mineral reserves.
1) Mineral Reserves
----------------
Mineral reserves for the company's mining operations and development
projects have been calculated based on the following metal prices and
lower cut-off criteria:
Mineral Gold Silver Copper Lower cutoff
Property US$/oz US$/oz US$/lb
---------------------------------------------------------------------
Mesquite $800 - - 0.21 g/t Au
- Oxide reserves
0.41 g/t Au
- Sulphide reserves
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Cerro San Pedro $800 $12.00 - US$2.58/t NSR
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Peak Mines $800 $12.00 $2.00 AU$118 - 152/t NSR
---------------------------------------------------------------------
New Afton $800 $12.00 $2.00 US$19/t NSR
---------------------------------------------------------------------
El Morro $500 - $1.25 0.30% CuEq
---------------------------------------------------------------------
Mineral reserves have been estimated and reported in accordance with
the standards of the Canadian Institute of Mining, Metallurgy and
Petroleum and National Instrument 43-101, or the AusIMM JORC
equivalent.
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2) Mineral Resources
-----------------
Mineral resources for the company's mining operations and development
projects have been calculated based on the following metal prices and
lower cut-off criteria:
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Mineral Gold Silver Copper Zinc Lead
Property US$/oz US$/oz US$/lb US$/lb US$/lb Lower cut-off
---------------------------------------------------------------------
Mesquite $900 - - - - 0.1 g/t Au
- All resources
---------------------------------------------------------------------
Cerro San
Pedro $900 $15.00 - $1.00 $0.75 0.1 g/t Au
- Oxide resources
0.4 g/t AuEq
- Sulphide
resources
2.5 g/t AuEq
- High grade
manto resources
---------------------------------------------------------------------
Peak Mines $800 $12.00 $2.00 $0.80 $0.60 A$95/t NSR
---------------------------------------------------------------------
New Afton $900 $15.00 $2.00 - - 0.4% CuEq
- All resources
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El Morro $500 - $1.25 - - 0.3% CuEq
- All resources
---------------------------------------------------------------------
Amapari $900 - - - - 0.5 - 0.7 g/t Au
- Open pit
resources
1.4 g/t Au
- Underground
resources
---------------------------------------------------------------------
Mineral resources have been estimated and reported in accordance with
the standards of the Canadian Institute of Mining, Metallurgy and
Petroleum and National Instrument 43-101, or the AusIMM JORC
equivalent.
-------------------------------------------------------------------------
3) Cerro San Pedro mineral resources include measured, indicated and a
portion of inferred resources that are contained within a "Mineral
Resource Pit" based on metal prices of $900/oz gold, $15.00/oz
silver, $1.00/lb zinc and $0.75/lb lead at lower cut-offs of 0.1 g/t
Au for oxide mineralization and 0.4 g/t AuEq for sulphide
mineralization. Inferred resources also include potentially economic
mineralization extending outside the limits of the "Mineral Resource
Pit" which is delimited by lower cut-off grade shells of 0.1 g/t Au
for oxide mineralization and 0.4 g/t AuEq for sulphide
mineralization.
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4) El Morro mineral reserve and resources tonnes and grade are reported
on a 100% basis; contained metals are reported on a 30% basis to
reflect New Gold's 30% ownership interest in the project.
El Morro mineral reserves and resources have been reported based on a
lower grade cut-off of 0.3% copper-equivalent ("EqCu") where
EqCu(%) = Cu(%) + 0.592 x Au (g/t) and Cu(%) =
percent copper, Au(g/t) = grams per tonne gold, and 0.592
represents a constant based on metal prices of $1.25/lb copper and
$500/oz gold and average metal recoveries for the deposit.
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Qualified Persons
-----------------
The following table sets out the individuals who are the Qualified
Persons as defined by Canadian National Instrument 43-101 in connection
with New Gold's Mineral Reserve and Mineral Resource Statements as of
December 31, 2009.
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Mineral Property Qualified Person
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Mesquite
Reserves Mr. Hubert Schimann, P.Eng. and Corporate Mining
Engineer for New Gold Inc.
Resources Mr. Richard J. Lambert, P.E. and currently Principal
Mining Consultant for Scott Wilson Roscoe Postle Assoc.
Cerro San Pedro
Reserves Mr. Stuart Collins, P.E. and Principal Mining
Consultant for Scott Wilson Roscoe Postle & Assoc.
Resources Mr. Rex Berthelsen, FAusIMM, CPGeo and Principal
Geologist for New Gold Inc.
Peak Mines
Reserves Mr. Sean Pearce, AusIMM Manager Mining for Peak Gold
Mines Pty. Ltd.
Resources Mr. Rex Berthelsen, FAusIMM, CPGeo and Principal
Geologist for New Gold Inc.
New Afton
Reserves Mr. Dennis Bergen, P.Eng. and Associate Principal
Mining Engineer for Scott Wilson Roscoe Postle & Assoc.
Resources Mr. David Rennie, P. Eng. and Principal Geologist for
Scott Wilson Roscoe Postle Assoc.
El Morro
Reserves Mr. Richard J. Lambert, P.E. and currently Principal
Mining Consultant for Scott Wilson Roscoe Postle Assoc.
(formerly Principal Mining Engineer for Pincock, Allen
& Holt Inc.)
Resources Mr. Barton G. Stone, P. Geo. and Chief Geologist for
Pincock, Allen & Holt Inc.
Amapari
Resources Mr. Rex Berthelsen, FAusIMM, CPGeo and Principal
Geologist for New Gold Inc.
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Conference Call-in and Webcast
New Gold will hold a conference call and webcast in early
About New Gold
New Gold is an intermediate gold mining company with the Mesquite Mine in the
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain information contained in this press release, including any information relating to New Gold's future financial or operating performance may be deemed "forward looking". All statements in this press release, other than statements of historical fact, that address events 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 words "expects", "does not expect", "plans", "anticipates", "does not anticipate", "believes", "intends", "estimates", "projects", "potential", "scheduled", "forecast", "budget" and similar expressions, or that events or conditions "will", "would", "may", "could", "should" or "might" occur. All such forward looking statements 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. 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 New Gold's 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; fluctuations in the international currency markets and in the rates of exchange of the currencies of
CAUTIONARY NOTE TO U.S. READERS CONCERNING ESTIMATES OF MEASURED, INDICATED AND INFERRED 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
(1) TOTAL CASH COST
"Total cash cost" per ounce figures are calculated in accordance with a
standard developed by The Gold Institute, which was a worldwide
association of suppliers of gold and gold products and included leading
North American gold producers. The Gold Institute ceased operations in
2002, but the standard is widely accepted as the standard of reporting
cash cost of production in North America. 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
cost on a sales basis. Total cash cost includes mine site operating costs
such as mining, processing, administration, royalties and production
taxes, but is exclusive of amortization, reclamation, capital and
exploration costs. Total cash cost is reduced by any by-product revenue
and is then divided by ounces sold to arrive at the total by-product cash
cost of sales. The measure, along with sales, is considered to be a key
indicator of a company's ability to generate operating earnings and cash
flow from its mining operations. This data is furnished to provide
additional information and is a non-GAAP measure. Total cash cost
presented do not have a standardized meaning prescribed by GAAP and may
not be comparable to similar measures presented by other mining
companies. It should not be considered in isolation as a substitute for
measures of performance prepared in accordance with GAAP and is not
necessarily indicative of operating costs presented under GAAP. A
reconciliation will be provided in the MD&A accompanying the audited
annual financial statements.
For further information: Hannes Portmann, Director, Corporate Development and Investor Relations, New Gold Inc., Direct: (416) 324-6014, Email: [email protected], Website: www.newgold.com
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