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New gold reports 1Q production, withdraws 2020 guidance

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(Kitco News) -  New Gold Inc. (TSX, NYSE American: NGD) reported on first-quarter production Wednesday and withdrew its 2020 production guidance due to uncertainty about how operations will be affected in the future by the COVID-19 pandemic, officials said Wednesday.

Operations at the Rainy River Mine are ramping back up after a two-week shutdown. Still, the company released a statement saying “it is prudent to temporarily withdraw our 2020 guidance as the global COVID-19 crisis continues to develop, particularly given the significant risk related to the potential for government laws, regulations or other measures that might be required that could impact our ability to operate, business disruptions in our supply chain, disruptions in the markets for our products, commodity prices generally as well as global health and economic impacts.”

Consolidated production for the January-March quarter was 103,435 gold-equivalent ounces, consisting of 66,790 ounces of gold, 131,417 ounces of silver and 18.5 million pounds of copper, the company reported. The company listed average realized prices of $1,458 per ounce of gold and $2.56 per ounce of copper.

The Rainy River Mine produced 51,106 gold-equivalent ounces, down from 51,915 in the fourth quarter and 62,278 in the first three months of 2019. Operations were suspended from March 20 to April 2 to allow the local workforce to follow a 14-day period of self-isolation for travel outside of Canada, related to global efforts to combat the pandemic, the company said. Operations resumed April 3.

“The mine is primarily utilizing its local workforce and will steadily ramp up operations over the coming weeks as we continue to assess different scenarios to safely reintroduce the non-local workforce into the daily operations to enhance our drilling and maintenance capacity,” New Gold said. “The mine is currently averaging approximately 100,000 tonnes per day, which is approximately 70% of the productivity achieved in the first quarter prior to the shutdown.”

The New Afton Mine produced 52,329 gold-equivalent ounces, which included 16,409 ounces of gold and 18.5 million pounds of copper. The gold-equivalent total was up from 49,507 ounces in the fourth quarter but down from 60,986 in the first quarter of 2019.

New Gold said its available liquidity has increased to approximately $600 million following the completion of a previously announced strategic partnership in which the Ontario Teachers’ Pension Plan acquired a 46.0% free-cash-flow interest in the New Afton mine for proceeds of $300 million.

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