Alberta to introduce ‘modern’ coal policy, including ban on new open-pit projects
The new policy will not affect those qualified as "advanced coal projects" such as the controversial Grassy Mountain mine.
New Gold (TSX: NGD) has cut production guidance at its Rainy River gold mine in Ontario by about 10% because of lower than expected grades. The gold miner now expects Rainy River to produce 240,000-255,000 gold-equivalent ounces this year, down from 275,000 to 295,000 oz.
The company signalled last month when it released second quarter results that its guidance might be affected. The grade shortfall came from mining at the East Lobe deposit, which delivered 20,000 fewer ounces than expected in July and August. The zone will contribute about half of production from Rainy River in the second half of the year, and about 35% in the final quarter.
The average grade to the mill in the second quarter was 0.82 g/t gold.
In order to improve its understanding of the mineralization and reconcile the modelled and mined grades, New Gold is conducting reverse-circulation within and outside of the East Lobe.
The grade issues have also affected all-in sustaining costs (AISCs), which are now projected at $1,365-$1,440 per gold equivalent oz., up about 14% from previous guidance of $1,125-$1,225 per oz.
New Gold’s guidance for its other producing mine, the New Afton operation in BC, remains unchanged at 165,000-195,000 gold-equivalent ounces.
“While the reduction in our near-term guidance at Rainy River is unfortunate, I remain confident the mine has reached an inflection point, as evidenced by the free cash flow generated in the second quarter and the mine is on track to deliver an improved second half of the year,” said Renaud Adams, president and CEO. “We continue to seek ways to further optimize our costs and capital profiles, and with the underground growth potential currently being evaluated, Rainy River is expected to be a meaningful contributor of free cash flow in our portfolio going forward.”
Development of a decline to reach the underground Intrepid zone at Rainy River is ongoing, with first production expected in late 2022. The company is also working on an underground optimization study, to be released before the end of the year along with an update of reserves and resources.
Commercial production began in late 2017 at Rainy River, 65 km northwest of Fort Frances, Ont. At the end of 2020, proven and probable reserves were 73.9 million tonnes grading 1.09 g/t gold and 3 g/t silver for 2.6 million oz. of gold and 7.2 million oz. of silver.
Between Rainy River and New Afton, the company now expects gold-equivalent production of 405,000-450,000 oz. At all-in sustaining costs of $1,365-$1440 per oz. That compares with previous guidance of 440,000 –490,000 gold equivalent ounces at an AISC of $1,230-$1,330 per oz.
New Gold also holds a gold stream on the Blackwater gold project in BC, which it sold to Artemis Gold (TSXV: ARTG) last year.
(This article first appeared in the Canadian Mining Journal)
