ONTARIO – The updated feasibility study from the Rainy River gold project, owned by New Gold of Vancouver, indicates that it could produce 325,000 oz of gold annually for nine years at total cash costs of $613/oz and all-in sustaining costs of $736/oz.
The base case economics considered a gold price of $1,300/oz and a silver price of $22/oz and a 0.95 US$/C$ exchange rate. Using these parameters, project would have a pre-tax 5% net present value of $438 million, an internal rate of return of 13.1% and a payback period of 5.4 years.
Should the gold price be $1,600/oz, the silver price $26 and the US and Canadian currencies be at par, the NPV jumps to $1.0 billion, the IRR to 21.1%, and the payback period is shortened to 3.6 years.
The deposit 80 km south of Kenora was added to the New Gold portfolio in October 2013 with the acquisition of Rainy River Resources. Proven and probable reserves (pit, underground and stockpile) total 104.28 million tonnes grading 1.13 g/t Au and 2.81 g/t Ag.
New Gold pegs development capital costs at $885 million, including a contingency of $70 million. Commissioning could come as soon as late 2015 with 2017 being the first full year of production. Mine life would be 14 years at a rate of 21,000 tonnes of ore per day.
Other details of the Rainy River feasibility study are available at NewGold.com in the news release dated Jan. 16, 2014.