VANCOUVER (miningweekly.com) – Canadian miner New Gold has reported disappointing first-quarter earnings as lower-than-expected gold grade, gold recovery and ore throughput at Rainy River combined with higher than expected milling costs at the Ontario-based processing facility weighed on the bottom line.
The Toronto-based miner said on Wednesday that for the three months ended March 31, the headline loss came in at $16.1-million, or $0.03 a share, compared with earnings of $1.2-million, or nil per share a year earlier. This was a miss when compared against average analyst forecasts calling for earnings of $0.01 a share.
Revenue, however, rose 55% year-on-year for the period to $193.2-million, owing to higher metal sales volumes and prices. Relative to the first quarter of 2017, gold sales increased by 65%, to 98 699 oz, mainly owing to the start-up of Rainy River, and the average realised gold price increasing by 4% to $1 328/oz. Copper sales at New Afton increased by 7% to lift global copper sales to 21.3-million pounds, and the average realised copper price increased 22% year-on-year to 3.14/lb.
New Gold's first quarter gold production of 96 882 ounces was significantly higher year-over-year, mainly owing to the first full quarter of production from Rainy River and higher output from Mesquite, which was partially offset by planned lower output at Cerro San Pedro. Quarterly copper production increased by 8% to 22.2-million pounds.
Rainy River's processing facility had multiple operational and mechanical challenges during the period under review. New Gold noted that unplanned downtime, and costs included plugged apron feeders, premature motor failure on the cyclone feed pump, and additional time required for the replacement of the semi-autogenous grinding mill liners, among other issues.
This helped to more than double all-in sustaining costs to $1 219/oz of gold.
New Gold confirmed its guidance for full-year gold output of 525 000 oz to 595 000 oz of gold, at AISC of $860/oz to $900/oz.
New Gold’s TSX-listed equity has fallen by 27.72% since the start of the year, and on Thursday fell further to a new 52-week low at C$2.85 a share.