New Gold To Implement Plan To Boost Gold, Copper Production

New Gold NGD unveiled a three-year plan to increase gold and copper production.

The Toronto-based company set a goal of achieving 35% growth in gold output and 60% growth in copper production by 2026. The management aims to achieve this through higher output at its current mines and by completing growth projects.

“The company has clearly defined the path forward to significant free cash flow generation,” New Gold CEO Patrick Godin said. “This is underpinned by the work completed in recent years to prepare our operations for meaningful production and cash flow increases, as costs and capital spend decrease.”

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The company’s strategy involves boosting gold production to between 410,000 and 460,000 ounces. For copper, it looks to produce between 71 million and 81 million pounds by 2026.

Besides higher production levels, the management expects capital reductions and lower operating costs, leading to a total cost decrease of around 7%. This scenario would place costs between $725 and $825 per ounce.

New Gold anticipates the first results of its three-year plan to manifest in 2024, with consolidated gold production reaching 310,000 to 350,000 ounces and copper production ranging between 50 million and 60 million pounds. These production enhancements should positively impact the company’s balance sheet, driving significant free cash flow.

“At current commodity prices, New Gold is expected to generate approximately $75 million in free cash flow in the second half of the year,” Godin stated. Per the latest financials, the company has $185.9 million in cash and $395.7 million in debt.

Despite past challenges, particularly at the Rainy River gold mine in Ontario and the New Afton copper-gold operation in British Columbia, New Gold is confident in its ability to overcome obstacles and achieve its production targets. Transitioning mining operations underground at Rainy River and ramping production at New Afton’s C-Zone are key initiatives driving future growth.

As the world moves toward potential critical commodity shortages, Canada steps into the spotlight as a mineral-rich market with a stable geopolitical environment. Its policymakers offer a lot of support to the sector, while domestic executives keep advocating for recognizing gold and silver as critical minerals.

Robert Quartermain, a former executive chairman of Pretium Resources, recently offered his perspective, claiming that acknowledging gold’s critical role in modern electronics could unlock new sources of finance, accelerate mining projects, and drive technological advancement.

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