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New Gold reports soft June quarter

Toronto-listed New Gold has posted an underwhelming set of June quarter production figures, following unplanned mill maintenance at the company’s Rainy River mine in Ontario.
New Gold reports soft June quarter New Gold reports soft June quarter New Gold reports soft June quarter New Gold reports soft June quarter New Gold reports soft June quarter

New Gold's Rainy River operation in Ontario, Canada

Gold production from Rainy River in Q2 amounted to 55,163oz, up 11% year-on-year but a 13.6% miss versus consensus forecasts.

Mill maintenance meant the company processed 3.6% less ore during the period than in Q1.

New Gold said lower gold grades were expected during the first half of the year as mining operations were focused on stripping to bring pit walls to the final pit limit.

The performance at Rainy River was offset by higher than expected copper production at New Afton in British Columbia, where volumes amounted to 18.2Mlbs, up 7.7% year-on-year.

The company expects performance to improve in the second half of the year. The mill at Rainy River is forecast to operate at 27,000tpd in H2, which would represent a 6.5% improvement on Q2. It also said grades were expected to increase as the mine returns to higher grade areas of the pit.

Despite this planned improvements, Rainy River is on track to meet the lower end of its guidance range, New Gold said.