Rainy River Mine planning full production by years end

By Kevin Vincent

Things are getting back to a “new normal” for many of northwestern Ontario mining operations and that includes New Gold’s Rainy River Mine near Fort Frances. Following a two-week voluntary suspension of production in mid-March due to COVID-19, the mine resumed operations at reduced levels in early April to allow the non-local workforce to be safely reintroduced.

Early in the second quarter, the mine utilized its local workforce and gradually began to safely reintroduce a portion of the non-local workforce to advance the ramp-up of operations. It didn’t take long for production levels to resume a sense of normalcy.

Rainy River management worked with surrounding Indigenous and local communities to implement and coordinate actions that reduced the risk of the spread of COVID-19. Enhanced precautionary measures relating to COVID-19 were implemented throughout the operation.

During the 14-day suspension a minimum crew was retained to monitor and maintain essential activities, ensure there was no impact on the environment and fully implement sanitization practices throughout the mine site, camp, and mobile and fixed equipment to ensure a safe working environment for employees. During this period, the team also advanced preventative maintenance work at the mill facility, stockpiled ore for the ramp-up period, supplied NAG material for the tailings management area and monitored water levels.

Picture: Rainy River Mill located near Fort Frances

In September, the company announced it had implemented a new, on-site testing protocol utilizing COVID-testing devices from Guelph-based manufacturer Precision Biomonitoring.

Their screening device delivers results in just over an hour. Testing uses nasal swabs, and more recently, saliva swabs to determine if an employee is positive for the virus.

New Gold was one of the first companies in the mining industry to adopt the technology when it was first approved by Health Canada in June.

On the production side, during the second quarter, the open pit averaged 126,512 tonnes per day. Mining productivity increased during the quarter from approximately 100,000 tonnes per day in early April to approximately 140,000 tonnes per day in June, achieving pre-suspension productivity levels. New Gold is a Canadian-focused intermediate gold mining company with two assets in Canada, the Rainy River gold mine and the New Afton gold-copper mine, as well as (its formerly) 100% owned Blackwater development project. The company announced on July 9, 2020 that it entered into an agreement with Artemis Gold Inc. to divest Blackwater for C$190 million in cash, an 8% gold stream and a C$20 million equity stake in Artemis.

New Gold’s vision is to build a leading diversified intermediate gold company based in Canada that is committed to environmental and social responsibility.

On the financial side, the company says production estimates for the year have been lowered, primarily related to the impact of COVID-19 in the first half of the year, resulting in lower tonnes and slightly lower grades milled for the full year. Cash costs and operating expense for the year have been slightly increased primarily due to lower sales. The total capital for the year has increased by less than $10 million due to a portion of the Tailings Management Area construction that was originally scheduled for completion in 2021, now accelerated for completion in 2020.

In the meantime, the company let go of the Blackwater Project in mid-year. “The divestment of the Blackwater Project completes another key transaction for New Gold that allows us to retain exposure to Blackwater through the gold stream and our equity position in Artemis. We believe that Artemis is the best positioned team to advance the project for the benefit of all stakeholders, including the host communities and partners. We look forward to participating in the future success of Blackwater and wish the team well.” said Adams.

“This transaction, along with the US$300 million partnership with Ontario Teachers’ Pension Plan as well as the recent restructuring of our balance sheet through the US$400 million bond offering that funded the redemption of the 2022 senior notes provides us with additional liquidity and financial flexibility as we transition to the next phase of our growth plan.”

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