New Gold’s New Afton mine, located near Kamloops, B.C., has begun commercial production, defined as 30 days of operation at 60% of capacity (6,600 mt/d). The mine is an underground block cave operation designed to produce 4 million mt/y of copper-gold ore for processing through a mill and flotation concentrator. New Gold started processing ore at New Afton June 28, 2012.

The New Afton project has revived the Afton open-pit mine that was operated by Teck Resources. The mine came into production in 1977, closed in 1991, re-opened in 1994, and closed permanently in 1997. The current site includes the historic pit, new underground workings, historic support facilities, a new concentrator and a recently constructed tailings facility. The New Afton deposit extends to the southwest from immediately beneath the Afton pit.

New Afton is forecast to produce 35,000 to 45,000 oz of gold and 30 million to 35 million lb of copper during 2012. Over its currently estimated 12-year mine life, the project is expected to produce an average of 85,000 oz/y of gold and 75 million lb/y of copper.

In addition to the processing start-up at New Afton, New Gold reported the project’s underground mining operations, which began in the fourth quarter of 2011, continue to perform well. The daily mining rate and the growth in the surface ore stockpile as of late June were tracking at or ahead of targeted levels. The average mining rate over the previous 30 days was in excess of 5,250 mt/d, or 47% of the nameplate 11,000-mt/d capacity. The mining rate is on schedule to reach 11,000 mt/d in early 2013. A surface ore stockpile of 1 million mt had been built, with an average stockpile grade of 0.88 g/mt gold and 0.94% copper.

New Afton’s total development cost remains at approximately C$765 million. The total development cost is net of revenue from gold and copper sales between the start of production and the commencement of commercial production in August.