New Gold, a Canadian gold mining company, recently filed a technical report for its Rainy River mine, located in western Ontario, updating plans for the open pit and an expanded underground mine. The life of mine has been extended to 2031 with the conversion of an additional 569,000 gold ounces (oz) in the main zones underground to mineral reserves. The remaining open pit will be mined using an optimized selective mining approach that, combined with stockpile movement, leads to both a smoother and sustainable mill grade and gold production profile, before transitioning to a cost-effective batch processing underground operation. The updated report assumed metal prices of $1,400 per oz for gold and $19/oz for silver ounce, and a foreign exchange rate of C$1.25 to US$1.

“Our updated approach for mining the remaining open pit should lead to a smoother, more consistent grade and production profile,” New Gold President and CEO Renaud Adams said. “The successful efforts to convert underground mineral resources to mineral reserves in 2021, which added meaningful gold ounces to the life of mine plan, has also extended the mine life to 2031 with low upfront underground development capital. Further, all-in sustaining costs continue to remain attractive and decrease significantly after 2023, providing for strong margins and free cash flow over the next decade.”

For the open-pit mine plan, the direct-processing ore cut-off grade has been lowered providing for an optimized selective mining approach when direct feed ore material will continue to be mined separately from the lower grade ores (LGO). Direct-processing ore and LGO will be mined together when efficient selective mining is no longer possible. The updated approach, along with processing of the stockpile ore material, produces a balanced average mill grade to support a smoother and sustainable gold equivalent production profile. Annual gold production is expected to average approximately 310,000 oz per year (oz/y) from 2022 to 2027.

Production from the Intrepid underground zone has been accelerated. Development of the main ramp and the first ore panel continues to advance on plan with initial production commencing in 2022.

The underground main zones have been incorporated via two in-pit portals (the previous report considered four), as well as the Intrepid underground zone portal located to the east of the open pit. The development of the first in-pit portal is expected to be initiated in the first quarter of 2023 with the second portal planned to be initiated in the first quarter of 2026.

Mill throughput is planned to average approximately 27,000 metric tons per day during 2022 to 2027, with LGO stockpile supplementing underground mill feed from 2026 to 2028.

Life-of-mine sustaining capital is estimated to be $647 million, which includes $193 million for open-pit stripping and mobile maintenance mostly in 2022 and 2023; $110 million related to tailings construction, which is planned to be completed in 2025; and $326 million for underground mining, primarily for underground ramp development, ventilation and pumping requirements.