SI wouldn't let me print that whole report; here's the beginning, up to the point in the previous post:
New Gold Announces a 16% Increase in Production, 17% Decrease in Cash Cost in the Third Quarter 2009 and Enhanced Value for its El Morro Project 11/04/2009
Download this Press Release
(All figures are in US dollars unless otherwise stated)
VANCOUVER, Nov. 3 /CNW/ - New Gold Inc. ("New Gold") (TSX and NYSE AMEX - NGD) today announced unaudited financial and operational results for the third quarter ended September 30, 2009. Gold production was 79,531 ounces in comparison to 68,801 ounces in the same quarter in 2008. Earnings from mine operations increased by 67% to $22.6 million from $13.5 million in the third quarter of 2008.
Q3 2009 Highlights
<<
- 16% increase in gold sales to 77,645 ounces from 67,156 ounces in the
corresponding quarter in 2008
- 17% decrease in total cash cost(1) per ounce sold, net of by-product
sales, to $470 from $565 in the corresponding quarter of 2008
- Cash and cash equivalents of $242.6 million at September 30, 2009
- Recent El Morro announcement increased the market value of the
project
>>
"We are very pleased to report increased production and reduced cash cost in the third quarter, which demonstrates that we continue to deliver on our operational targets and we fully expect to continue on this trend going forward. The company has built tremendous momentum over the last six months and plans to continue to enhance value through assets such as El Morro and delivering on our growth strategy." said Robert Gallagher, President and Chief Executive Officer.
Third Quarter Financial Review
In the third quarter 2009, earnings from mine operations were $22.6 million in comparison to $13.5 million in the third quarter of 2008. Third quarter net earnings were $4.1 million, or $0.01 per basic share, in comparison to a net loss of $148.9 million, or $0.70 per basic share, in the same period in 2008. The third quarter 2009 increase in net earnings is primarily due to: higher gold and silver production at Cerro San Pedro, initiation of production from the high copper grade Chesney ore body at Peak, the successful acquisition of the Mesquite mine which positively impacted earnings and a loss from discontinued operations of $166.9 million on the Amapari mine in the third quarter 2008.
Third quarter gold sales improved by 16% to 77,645 ounces at an average realized gold price of $959 per ounce compared to 67,156 ounces at an average realized gold price of $870 per ounce in the corresponding quarter of 2008. The increase in gold sales in comparison to 2008 is mainly due to a significant increase in total tonnes of ore mined at Cerro San Pedro and from the successful acquisition of the Mesquite mine.
Total cash cost(1) per gold ounce sold, net of by-product sales, decreased by 17% in the third quarter to $470 from $565 in the third quarter of 2008. This was primarily due to a significant increase in silver revenues at Cerro San Pedro, an increase in copper revenues at Peak Mines and a favorable Australian dollar exchange rate versus the US dollar.
Cash flow from operations in the third quarter 2009 was $6.0 million compared to cash flow used by operations of $5.4 million for the same period in 2008. The 2009 increase is mainly attributable to increased gold production, a 10% increase in average realized gold price per ounce sold of $959 in comparison to $870 in the third quarter 2008 and increased by-product revenue. Consistent with New Gold's mine plans, cash flow from operations should continue to move higher in the fourth quarter of 2009 as production continues to increase.
Nine Month Period
For the nine months ended September 30, 2009, earnings from mine operations were $48.9 million in comparison to $36.0 million in the same period in 2008. For the year to date 2009 period, the net loss was $186.7 million, or $0.67 per basic share, compared to a net loss of $143.8 million, or $1.14 per basic share, in the same period in 2008.
For the nine months ended September 30, 2009 gold sales were 185,932 ounces at an average realized gold price of $935 per ounce compared to 159,397 ounces at an average realized gold price of $915 per ounce in the corresponding period in 2008. The increase in gold sales in comparison to 2008 is mainly due to a 121% increase total tonnes of ore mined primarily from the acquisition of Mesquite and from ramping up Cerro San Pedro.
For the nine months ended September 30, 2009, total cash cost(1) per gold ounce sold, net of by-product sales, decreased by 19% to $460 from $568. The reduction in total cash cost(1) compared to the same period in 2008, is mainly due to: a significant increase in silver revenues at Cerro San Pedro and increased copper revenues at Peak Mines, which was partially offset by an unfavourable movement in the Australian dollar exchange rate.
For the nine months ended September 30, 2009, cash flow from operations increased by $18.9 million to $24.6 million from $5.7 million in the same period in 2008. The increase in cash flow from operations is mainly attributable to increased gold production and increased by-product revenues.
Operational Review
Mesquite
Gold sales at Mesquite for the third quarter totaled 27,594 ounces, compared to the quarterly record gold sales of 47,535 ounces in the corresponding quarter of 2008. For the nine months ended September 30, 2009, gold sales were 87,647 ounces compared to 80,255 ounces sold in the same period in 2008, which includes the first five months of production in 2009 and the full period in 2008 prior to New Gold ownership. As the strip ratio has decreased during this period in comparison to 2008, Mesquite has been able to increase the tonnes processed by 3.0 million to 8.7 million tonnes, which will continue to positively impact production going forward.
Total cash cost(1) per gold ounce sold in the third quarter of 2009 was $662 compared to $390 in the third quarter of 2008. Total cash cost(1) per gold ounce sold for the nine months ended September 30, 2009 was $624 compared to $503 in the same period last year. The total cash cost(1) increase during this period is mainly attributable to lower production and the following temporary items: use of a mining contractor to catch-up on waste stripping, fewer ounces of gold and more waste than modelled in the Rainbow 3 pit, increased cost associated with abnormal equipment maintenance and a one-time change-over from bias ply to radial tires for the entire haulage fleet. Additionally, Mesquite has increased cyanide and lime consumption to achieve optimum recovery. As outlined in the mine plan, production at Mesquite began ramping up in the month of September and is expected to continue on this trend in the fourth quarter, providing the highest production levels for the year.
Cerro San Pedro
Cerro San Pedro gold sales totaled 27,193 ounces for the third quarter compared to 26,070 ounces in the same quarter in 2008. For the nine months ended September 30, 2009, gold sales were 68,857 ounces compared to 64,182 ounces sold in the same period in 2008, which includes the first six months of production in 2008 prior to New Gold ownership. The increase in gold sales during the quarter was due to higher tonnes placed on the pad and increased recovery rate, partially offset by lower feed grade. Silver sales for the third quarter increased significantly to 382,278 ounces compared to 305,430 ounces sold in the third quarter of 2008. For the nine months ended September 30, 2009, silver sales were 1.2 million ounces compared to 0.8 million ounces sold in 2008, which includes the first six months of production in 2008 prior to New Gold ownership. The increase in silver production in the quarter is attributed to higher silver grades mined and the benefits of secondary leaching which commenced during the first half of 2009.
Total cash cost(1) per gold ounce sold, net of by-product sales, for the third quarter was $416 compared to $367 in the third quarter of 2008. Total cash cost(1) per gold ounce sold, net of by-product sales, for the nine months ended September 30, 2009 was $394 compared to $370 in the same period last year. The increase in cash cost(1) is due to significantly higher tonnes moved and slightly higher consumable costs, which were partly offset by the depreciation in the Mexican peso versus the US dollar and higher silver revenues.
Peak Mines
Peak Mines' gold sales in the third quarter totaled 22,858 ounces compared to 24,425 ounces in the same quarter of 2008. For the nine months ended September 30, 2009, gold sales totaled 61,653 ounces compared to 74,114 ounces sold in the same period of 2008. Copper sales increased by 119% during the third quarter 2009 to 3.8 million pounds from 1.7 million pounds in the same period in 2008. Gold sales were lower and copper sales higher in the third quarter 2009 in comparison to the same quarter in the prior year due to mining shifting to zones of higher copper grades and lower gold content, which was partially offset by higher gold recoveries. The mill feed was 8% lower and 42% higher in gold and copper grade, respectively.
Total cash cost(1) per gold ounce sold, net of by-product sales, for the third quarter was $302 compared to $560 in the same period of 2008. Total cash cost(1) per gold ounce sold, net of by-product sales, for the nine months ended September 30, 2009 was $332 compared to $426 in the same period last year. The decrease in cash cost(1) is primarily due to higher copper revenues from increased copper sales, which was partly offset by an increase in the Australian dollar exchange rate versus the US dollar.
New Afton Project Update
The development schedule for New Afton remains on budget and on schedule to commence production in the second half of 2012. During the third quarter of 2009, underground development crews advanced development by 453 metres compared to 424 metres during the second quarter of 2009. An underground development milestone was achieved in the third quarter with the breakthrough of the conveyor decline which creates a secondary access to the mine and facilitates improved equipment access.
Project spend during the third quarter at New Afton was $12.2 million (including $6.0 million of capitalized interest), which is mainly comprised of underground development. For the nine months ended September 30, 2009, the project spend was $51.4 million (including $15.8 million of capitalized interest). The New Afton development cost is expected to be funded internally from existing financial resources and operating cash flow.
Liquidity and Capital Resources
New Gold held cash and cash equivalents of $242.6 million as at September 30, 2009 in comparison to $141.1 million on June 30, 2009. The change in cash position is comprised mainly of the following items:
<<
- $107.2 million gross proceeds from bought deal public offering which
closed September 11, 2009;
- $6.0 million generated in operating cash flow for the quarter;
- $3.1 million in repayment of long term debt; and
- $12.2 million project spend at New Afton for the quarter, which
includes capitalized interest
>>
The company's overall debt position is $265.2 million. The majority of the debt, which is comprised of the senior secured notes, is not due until 2017. On October 7, 2009, New Gold announced that it amended Mesquite's term loan facility and made a prepayment of $15.0 million. The prepayment reduces the outstanding principal of the loan to $45.8 million from $60.8 million, which is now repayable by June 30, 2012 unless the company chooses to repay the loan early or the sweep mechanism comes into effect. New Gold has increased flexibility in considering its options with respect to the gold hedge program, a required condition precedent to the loan facility, that now extends two and one half years beyond the revised term to December 31, 2014, the original term prior to prepayment. Approximately half of the program, or 165,000 ounces of gold, are hedged beyond June 30, 2012 and may be monetized at New Gold's discretion.
Capital expenditures for the remaining three months of 2009 are expected to be approximately $34.2 million with $23.7 million (including capitalized interest) allocated to the continued development of New Afton, $9.2 million to Peak Mines, $1.1 million to the Cerro San Pedro Mine and $0.2 million to the Mesquite Mine.
|
