Rainy River Delivered Another Strong Quarter

TORONTO - New Gold Inc. reported that the Rainy River Mine delivered another strong quarter of operational and technical performance. During the quarter, mine operations ramped up towards the 2021 target capacity of approximately 150,000 tonnes per day and the mill delivered a record of 27,000 tonnes per day, reaching the maximum monthly average throughput allowable under the existing mill permit. With both the mine and mill operating at capacity and unit costs tracking towards 2021 planned levels, the Company’s efforts will now shift to focus on identifying additional opportunities to further optimize mine and mill productivities and unit cost performance.

The New Afton operations continued to improve during the quarter and key B3/C-Zone projects were advanced. The focus will continue to prioritize B3/C-Zone development, thickened and amended tailings (TAT) construction, wick drain installation for the stabilization of the historic tailings facility and detailed design work related to C-Zone in-pit tailings deposition. In late October, Phase 1 of a strategic drilling program was launched to test the potential of the 12 kilometers Cherry Creek Trend, located within 3 kilometers of the New Afton mill, which could increase the resource inventory of the New Afton Mine and extend mine life.

Total production for the third quarter was 115,536 gold equivalent (gold eq.) ounces (78,959 ounces of gold, 171,825 ounces of silver and 18.2 million pounds of copper). For the nine-month period, production was 317,050 gold eq. ounces (210,043 ounces of gold, 437,524 ounces of silver and 53.6 million pounds of copper). Revenues for the quarter were $174 million and $444 million for the nine-month period. Operating expense for the quarter was $778 per gold eq. ounce and $791 per gold eq. ounce for the nine-month period. Total cash costs for the quarter were $822 per gold eq. ounce and $839 per gold eq. ounce for the nine-month period. All-in sustaining costs (AISC) for the quarter were $1,313 per gold eq. ounce and $1,349 per gold eq. ounce for the nine-month period. Net earnings from operations for the quarter was $16 million and net loss from operations of $58 million for the nine-month period. Adjusted net earnings for the quarter was $12.4 million and adjusted net loss of $8.7 million for the nine-month period.

Cash generated from operations for the quarter was $92 million and $196 million for the nine-month period. Operating cash flow generated from operations for the quarter, before non-cash changes in working capital, was $84 million and was $184 million for the nine-month period. During the quarter, the Company completed the divestment of the Blackwater Project to Artemis Gold Inc. (“Artemis”) for total cash consideration of C$190 million. The initial cash payment of C$140 million was received during the quarter with the remaining C$50 million cash payment due on August 24, 2021. Under the terms of the agreement with Artemis, the Company retained an 8% gold stream and a 6% equity stake in Artemis. During the quarter, the Company transferred approximately $90 million in letters of credit related to mine closure costs to surety bonds, increasing the funds available under the credit facility. On October 9, 2020, the Company extended its secured credit facility with a syndicate of 8 top-tier financial institutions. The facility will now mature on October 9, 2023 and has a new maximum borrowing limit of $350 million. At the end of the quarter, the Company had a cash position of $415 million and a strong liquidity position of approximately $720 million, based on the amended credit facility.

"We are very pleased with our overall performance for the quarter and are tracking well to meet our revised consolidated annual guidance with AISC that are expected to be below guidance. We are very encouraged by the solid performance from the Rainy River Mine as the operation has continued to meet, or exceed, all key operational and cost targets and has substantially completed all deferred construction capital with the objective of returning to normalized sustaining capital levels. The Rainy River Mine is now repositioned to deliver strong production growth at lower costs and higher margins, which will drive a strong free cash flow stream over the life of the mine," said Renaud Adams, CEO. "We are pleased with the improved performance at our New Afton Mine and currently all teams have been mobilized to advance all key projects, including B3/C-Zone development, thickened and amended tailings construction, stabilization of the historic tailings facility and detailed design work for the C-Zone tailings storage facility. Exploration drilling at the Cherry Creek target was recently launched with the overall objective of testing the potential for near mine resources that could extend the mine life of New Afton Mine and utilize existing infrastructure.”