(All figures are in US dollars unless otherwise indicated)
VANCOUVER, Nov. 4, 2011 /PRNewswire/ - New Gold Inc. ("New Gold") (TSX:NGD)(NYSE AMEX:NGD) today announces financial and operational results for the third quarter of 2011. The company finished the third quarter with gold sales of 93,028 ounces at a total cash cost(1) per ounce sold, net of by-product sales, of $528 per ounce. The combination of increased gold sales and the continued strength of the gold price led to another quarter of strong financial results, despite certain temporary operational challenges resulting in higher total cash cost(1). During the quarter, the company's earnings from mine operations increased by 61% to $76 million, resulting in net earnings of $41 million, or $0.09 per share. Net cash generated from operations increased by 105% to $71 million when compared to the third quarter of 2010.
New Gold Third Quarter Highlights
- Quarterly gold sales increased to 93,028 ounces from 89,692 ounces in the same period in 2010
- Net cash generated from operations increased by 105% to $71 million
- Underground mine production commenced at New Afton with first drawbell blasts successfully initiating the caving process
- $433 million of cash at September 30, 2011
- Updated NI 43-101 compliant mineral resource estimate for the Blackwater Project (100% basis):
- Indicated gold resource: 165 million tonnes at an average grade of 1.01 g/t containing 5.4 million ounces of gold
- Inferred gold resource: 39 million tonnes at an average grade of 0.94 g/t containing 1.2 million ounces of gold
"The third quarter saw New Gold continue to build on its momentum, particularly through the start of underground mining at New Afton and the significant growth in gold resources at Blackwater," stated Randall Oliphant, Executive Chairman. "While our quarterly cash costs were impacted by certain operational challenges, the performance of our mines in the first nine months of the year has allowed us to maintain a very strong financial footing. It is from this solid foundation that we advance our three exciting projects which provide our company with an even more promising future."
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2011 Outlook
Through the first nine months of 2011, New Gold has produced 286,484 ounces of gold at total cash cost(1), net of by-product sales, of $409 per ounce. New Gold is pleased to reiterate the 2011 production guidance the company set at the beginning of the year for gold production of 380,000 to 400,000 ounces. New Gold's initial guidance for 2011 total cash cost(1) per ounce sold, net of by-product sales, was $430 to $450 per ounce. In May of 2011, based on the rapid appreciation of silver and copper prices, New Gold lowered its total cash cost(1) guidance for the year to $390 to $410 per ounce. Among other assumptions, this cost guidance range was based upon a $4.00 per pound copper price. Taking into account the year-to-date realized copper price and assuming $3.50 per pound copper in the fourth quarter, total cash cost(1) per ounce sold, net of by-product sales, for the year may be nominally above the company's reduced guidance range of $390 to $410 per ounce. New Gold should finish the year as one of the lowest cost producers in the industry. In addition to the three operating mines, the company's three development projects should continue to advance meaningfully with multiple catalysts anticipated in late 2011 and early 2012.
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