New Gold Announces Third Quarter Production Results
October 25th, 2008 | by admin |New Gold Inc. (TSX and AMEX - NGD) is pleased to announce its third quarter production results and cash cost, which are in line with annual guidance. The production and cash cost information provided below are approximate figures and might differ slightly from the third quarter earnings.
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They also include year to date results for the period prior to the close of the business combination among New Gold, Peak Gold Ltd. and Metallica Resources Inc. on June 30, 2008.
Third Quarter Highlights
Third quarter highlights reflect the operating results for the three months ended September 30, 2008 for Cerro San Pedro, Amapari and Peak Mines.
- Gold production was 68,801 ounces versus 62,705 ounces in the second quarter
- Gold sales were 67,156 ounces versus 62,730 ounces in the second quarter
- Total cash cost was $566 per ounce (net of by-product sales) versus $612 per ounce in the second quarter
- Copper production was 2.37 million pounds versus 1.24 million pounds in the second quarter
- Silver production was 282,055 ounces versus 283,749 ounces in the second quarter
Year to Date Highlights
For the nine month period ending September 30, 2008, the operational results for Cerro San Pedro, Amapari and Peak Mines are as follows:
- Gold production was 193,096 ounces
- Gold sales were 197,508 ounces
- Total cash cost was $541 per ounce (net of by-product sales)
- Copper production was 5.77 million pounds
- Silver production was 794,427 ounces
Cerro San Pedro Mine
Cerro San Pedro achieved good results in the third quarter with gold sales increasing to 26,070 ounces compared to 22,190 ounces in the second quarter. Gold and silver production for the third quarter was 24,387 ounces and 282,055 ounces, respectively, and for the nine month period ending September 30, 2008, gold and silver production was 63,330 ounces and 794,427 ounces, respectively. The increase in production over the second quarter was due to a higher recovery as leach pads approach equilibrium. Total cash cost net of by-product sales for the third quarter was $369 per ounce and for the nine month period ending September 30, 2008 was $403 per ounce. Cash cost were lower in the third quarter mainly because of the increase in the volume of gold sold offset by the reduction in the selling price of silver, higher strip ratio and increased consumable costs.
Amapari Mine
Amapari produced 17,752 ounces of gold in the third quarter and 56,891 ounces for the nine month period ending September 30, 2008. The positive results of a major overhaul of the operating systems at Amapari that commenced early in the quarter are evidenced by the significant increase of recoverable ounces placed on the leach pads. Recoverable ounces placed increased from 16,400 in the second quarter to 23,600 in the third quarter, an increase of 44 percent. Higher mobile equipment availabilities resulted in more tonnes moved and higher grade ore delivered to the leach pad while better plant availability increased tonnes placed by 33 percent. Recoveries of completed piles averaged 75 percent compared to historic results in the low 60 percent range. Total cash cost per ounce decreased from $968 in the second quarter to $882 in the third quarter. Full impact on production and cash cost from the recent improved operating performance is expected to be realized in the fourth quarter.
Evaluation of results from the 2007/2008 drill program at Amapari has not added significant amounts of oxides that would be economical to process in the existing heap leach circuit. Remaining heap leachable material will be exhausted in the fourth quarter of 2009. Production beyond 2009 is subject to ongoing studies on the feasibility of mining and processing the sulphide resources underlying and surrounding the oxide pits. New Gold continues to monitor operating performance at the Amapari Mine and will take further action as appropriate.
Peak Mines
Peak Mines produced 26,662 ounces of gold and 2.37 million pounds of copper in the third quarter versus 21,114 ounces of gold and 1.24 million pounds of copper in the second quarter. Metal production returned to planned levels with improvement in ore grade as mining focused on primary stopes. Mill throughput of 196,633 tonnes reflects consistent underground production and high mill availability. Total cash costs for the quarter were high at $560 per ounce sold as a result of negative adjustment to copper concentrate accounts receivable due to decreased copper prices.
Commenting on operating results, Robert Gallagher, President and Chief Executive Officer said, “The third quarter results are in line with the annual forecast. Cerro San Pedro had good gold production and cash cost results this quarter. We congratulate them in the receipt of both the Safety Award from the Mexican Mining Association and the ISO 14001 certification. At Amapari, operating performance improved considerably through the quarter which is expected to result in significant improvement in gold produced and cash cost as the full effect of these improvements bear fruit in the fourth quarter. Peak Mines had a good quarter with grades returning to their planned levels and increased mill throughput. Peak Mines reached a noteworthy milestone in the third quarter, producing their two millionth ounces” concluded Mr. Gallagher.
Gold production and cash cost are in line with 2008 guidance of approximately 250,000 ounces and total cash cost (net of by-product sales) between $500 and $520 per ounce. — www.cnxmarketlink.com
