Make Kitco Your Homepage

New Gold lists loss for quarter when Rainy River Mine temporarily closed

Kitco News

Editor's Note: With so much market volatility, stay on top of daily news! Get caught up in minutes with our speedy summary of today's must-read news and expert opinions. Sign up here!

(Kitco News) - New Gold Inc. (TSX: NGD, NYSE American: NGD) reported a loss during the first quarter, which was impacted by a temporary closure of the Rainy River Mine due to government rules to fight the global COVID-19 pandemic, the company announced Wednesday.

The adjusted loss was put at $18 million, or 3 cents per share per share. In the sane period of 2019, New Gold’s adjusted loss was $2 million, or 0 cents per share.

The net loss for the quarter was $28 million, or 4 cents per share, compared to a loss of $13 million, or 2 cents, in the same quarter of 2019.

Revenues were $142.3 million, a decrease from $167.9 million in the prior-year quarter, which the company blamed on a decrease in gold and copper sales volumes, which in turn were impacted by the 12-day suspension at the Rainy River Mine. Also, copper prices were lower, although gold prices were higher. Further, sales volumes in the prior-year period were 10% higher than production primarily due to the timing of shipment and sales, the company said.

Gold-equivalent production was 103,435 ounces in the first quarter, compared to 123,263 in the same period a year ago. Gold output fell to 66,790 ounces from 79,398, and copper output slipped to 18.5 million pounds from 19.5 million. The company also mines some silver.

Rainy River, located near the U.S. border, was shut down from March 20 to April 2 to allow the local workforce to self-isolate for 14 days due to travel outside of Canada, the company said. Operations resumed on April 3, with a gradual ramp-up. New Gold said the mine is currently averaging 100,000 metric tons of ore a day, which is 70% of productivity prior to the shutdown.

“We are encouraged by the financial results for the quarter as they were impacted by the two-week suspension at Rainy River in the latter part of March, and the enhanced COVID-19 safety protocols put in place at both operations,” Renaud Adams, chief executive officer. “Following the close of a strategic $300 million partnership with the Ontario Teachers' Pension Plan, the company now has a strong liquidity position of $600 million, which is more than adequate to fund our business during this COVID-19 period.”

The average realized gold price rose to $1,458 from $1,301 an ounce, while the average copper price fell to $2.56 a pound from $2.79.

All-in sustaining costs per gold-equivalent ounce rose to $1,446 from $1,083. Some of the increase was due to lower gold-equivalent ounces, the company explained.

New Gold earlier this month withdrew its 2020 guidance due to the uncertainty caused by the COVID-19 pandemic.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.