New Gold (TSE: NGD) (NYSE American: NGD) extended the lives of its British Columbia-based New Afton Mine and its Rainy River mine in Ontario through the technical growth projects it had invested in over the past few years.
The company reported on Thursday that its copper and gold reserves at New Afton increased by 15 per cent and 13 per cent respectively, compared to the end of 2024. The increase is due to a rise in tonnage at the C-Zone. Also, the company introduced a new zone where copper and gold grades were over double that of the C-Zone.
New Gold reported the new mineral reserves came at no additional cost and should extend operations to 2031. The Canadian miner also displayed opportunities to further expand the block-caving operation in British Columbia.
At Rainy River, New Gold extended the open pit’s depletion timeline from early 2025 to 2028. It did this by incorporating the optimized Phase 5 pit design. This adjustment will delay the processing of low-grade stockpile and keep the mill running at full capacity until 2029.
Despite a 2 per cent decrease in open pit reserves at Rainy River, New Gold reported a 76 per cent increase in gold resources. The company also expanded underground reserves to approximately 1.34 million ounces.
“The life-of-mine plans successfully outline New Gold’s strong production profile with reducing costs, strong free cash flow generation and increasing net asset value, while also highlighting exciting opportunities to build on over the longer term,” said CEO Patrick Godin.
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Rainy River is expected to produce 300,000 ounces per year
Building on the mine extensions, New Gold outlined a three-year outlook projecting higher production and lower costs. In 2025, the Toronto-based miner expects consolidated gold production to rise by 16 per cent to 325,000-365,000 ounces, driven mainly by an improved production profile at Rainy River.
Over the next three years, the mine is expected to produce an average of 300,000 ounces per year. The mine is located 65 kilometres northwest of Fort Frances, Ontario. Meanwhile, New Gold anticipates copper production will remain consistent with 2024 at 50-60 million pounds. This increased throughput from New Afton’s C-Zone offsets planned lower grades. This resulted from the exhaustion of the B3 cave and initial draw bells from C-Zone.
New Gold expects all-in sustaining costs to drop by $215 per ounce, or 17 per cent. This is compared to the 2024 midpoint of guidance, bringing costs to between USD$1,025-$1,125 per ounce. The company attributes this reduction to higher production and lower operating costs from the New Afton C-Zone crusher and conveyor system.
New Gold forecasts total capital spending of CAD$270-$315 million, aligning with the 2024 guidance range.
“In 2024, the company reached a free cash flow inflection point and 2025 will continue to build on that. This year, we expect to see the value from the significant investments made in recent years on our growth projects through increased production, decreasing costs, and substantial free cash flow generation,” Godin said.
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New gold anticipates rise in copper production
New Gold expects consolidated gold production to rise significantly in 2026 and 2027, increasing by 55 per cent to 435,000-490,000 ounces in 2026 and by 37 per cent to 375,000-445,000 ounces in 2027, compared to 298,303 ounces in 2024. The company attributes these increases to improved production profiles at both Rainy River and New Afton as growth projects reach completion and ramp up in the near term.
The company also anticipates a sharp rise in copper production. It anticipates its 2027 output to be between 95-115 million pounds—approximately 94 per cent higher than in 2024. It will be driven by higher grades and increased throughput from New Afton’s C-Zone.
The company expects all-in sustaining costs to decline by approximately 70 per cent compared to the 2024 midpoint of guidance, reaching $400-$500 per ounce. This drop aligns with the anticipated completion of the Rainy River Phase 5 expansion in 2026. New Gold also forecasts a significant reduction in total capital spending for 2027, estimating CAD$70-$95 million, well below 2024 levels.
New Gold stated that higher production, lower costs, and reduced capital spending from 2025 to 2027 should drive increasing margins and generate cash flow.
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joseph@mugglehead.com
