New Gold Inc. officials say they will evaluate expansion of its Rainy River Mine, and target a 22 percent production increase in 2021, the company said in its annual report.
The company released its annual operational outlook for the Rainy River Mine, mineral reserves and resources as of Dec. 31, 2020. The mine is near Emo, Ontario, about 45 miles northwest of International Falls.
Renaud Adams, president and CEO, said the company will build on the many accomplishments achieved over the past two years.
"We will also evaluate the potential expansion of the underground mine beyond the current life of mine, focusing on organic growth opportunities and advancing the exploration program,” he said.
In addition, he said the company will continue to focus on optimizing its operational and cost performance with the objective of outperforming the 2021 technical report estimates.
The outlook plans for a 22 percent increase in production, with costs expected to decrease, primarily due to lower cash costs and sustaining capital requirements as all deferred construction capital programs were completed in 2020. Growth capital is expected to increase over the prior year, primarily related to development of the underground Intrepid Zone.
- Gold eq. production is expected to increase over the prior year due to an increase in higher grade tonnes mined and processed as compared to 2020, which included the impact related to a voluntary two-week suspension due to COVID-19.
- Cash costs per gold eq. ounce are expected to decrease over the prior year as production increases and operational cost performance continues to improve. Operating expense per gold eq. ounce is expected to be between $715 and $795.
- Sustaining capital is expected to decrease over the prior year as planned.
- AISC are expected to decrease, primarily due to higher production, lower cash costs and lower sustaining capital requirements as compared to the prior year.
- Growth capital is expected to increase over the prior year, primarily relating to the development of the underground Intrepid Zone.
- The initial phase of an exploration drilling program focused on the North East Trend, located approximately 18 kilometers northeast of the Rainy River Mine was launched in late 2020. This first phase of exploration drilling will be completed during the first half of the year and could be expanded based on results.
- During the year, operational and cost performance from the Rainy River Mine is expected to be in-line with the 2021 estimates provided in the NI 43-101 Technical Report for the Rainy River Mine dated March 12, 2020 (the “Rainy River Technical Report”), which estimate production of approximately 284,000 gold eq. ounces at AISC of approximately $1,200 per ounce (including equipment leasing), assuming Guidance Assumptions.
The report said it assumes no significant COVID-19-related interruptions.