First gold poured at Rainy River, one of Canada’s newest mines
New Gold’s large Rainy River project on track to begin production next month.
New Gold (TSX:NGD; NYSE-MKT:NGD) has poured its first gold at the large Rainy River project, in Canada’s Ontario and said is on track to begin commercial production in November, which will make the mine one of the country’s three gold operations expected to come online before the end of the year.
The Toronto-based miner, which began processing ore at Rainy River last month, said the first pour yielded approximately 500 ounces of gold and 600 ounces of silver.
At full tilt, New Gold’s Rainy River mine is expected to produce about 325,000 ounces of gold annually, during its 14-year estimated mine life.
In the past five weeks, New Gold has processed about 290,000 tonnes of ore, which — including four days of intentional downtime as part of the commissioning plan — puts the average processing rate at almost 14,000 tonnes per day, the miner said in the statement.
Getting to this point has not been so easy for the company. During pit development, New Gold was plagued by cost overruns and delays, which was largely attributed to unexpected layers of peat and basal till.
But in the last month the company has made great efforts to get back on track, with commercial production still scheduled to begin in November.
New Gold estimates that the development capital cost from the beginning of this year to the targeted start of operations remains $515 million.
At full production, Rainy River mine is expected to generate an average of 325,000 ounces of gold annually, during its 14-year estimated mine life, at all-in sustaining costs (AISCs) of $670 per ounce.
This year alone, the operation is expected to produce between 50,000 and 60,000 ounces of gold, boosting the company’s total output for 2017 to 380,000-430,000 ounces of gold, compared to the 381,663 ounces it generated last year.
The other two Canadian gold mines scheduled to begin production before the end of the year are Pretium Resources’ (TSX, NYSE:PVG) Brucejack mine, in British Columbia’s Golden Triangle; and Atlantic Gold’s (TSX-V:AGB) Moose River Consolidated (MRC) operation, in Halifax, Nova Scotia.
In May, TMAC Resources (TSX:TMR) began commercial production at its Doris gold mine and mill at the Hope Bay project in Canada’s far north, which has now become Nunavut’s second operating gold mine and the first one ever in the western area of the Territory.