New Gold

New Gold Inc. is a Canadian mining company that owns and operates the New Afton gold-silver-copper mine in British Columbia and the Rainy River gold-silver mine in Ontario, Canada. Through a Mexican subsidiary company, they also own the Cerro San Pedro gold-silver mine in San Luis Potosí, Mexico, which ceased operation in 2017. While New Gold was founded in 1980 for the purposes of mineral exploration, the company became a mine operator with its merger of Peak Gold and Metallica Resources in 2008. A fourth company, Western Goldfields, joined in 2009. Together they operated the Peak mine in Australia and Mesquite Mine in California but sold both in 2018. Headquartered in Toronto, shares of the company are traded on the Toronto Stock Exchange and NYSE American.

Operating mines

As of 2020, New Gold operates two mines:

New Afton - The New Afton gold-silver-copper mine is an underground (block cave) mine located within the footprint of the Afton mine, 10 km west of Kamloops, British Columbia, Canada. That original Afton mine was an open pit mine that was operated by Teck Corporation (later Teck Cominco) between 1977 and 1997. In targeting a specific mineral deposit, New Gold constructed underground tunnels, along with a new concentrator and tailings facility. They achieved commercial production in July 2012 at which time the mine had an expected 12 year life.

Corporate history

New Gold Inc was the result of a merger in July 2008 of three companies (New Gold, Peak Gold, Metallica Resources) in various stages of developing and operating gold mines in North and South America and in Australia. Individually, the three were junior mining companies listed on the Toronto Stock Exchange with Peak Gold listed solely on the TSX Venture Exchange, and the other two interlisted on the American Stock Exchange. Combined, they formed a $1.6 billion mid-tier mining company with 3.2 million ounces of proven and probable gold reserves.[4] Though it was the smallest of the three, New Gold became the parent company with Metallica Resources and Peak Gold becoming subsidiaries. Shareholders of Metallica Resources were given a 45.7% stake in New Gold with and Peak Gold shareholders being given 37.8% and the remaining 16.5% share going to the old New Gold shareholders. A year later, Western Goldfields Inc was added in an all-stock deal which gave Western Goldfields shareholders a 42% stake of the new company.[5]

Original companies

The original New Gold brought with it its developing New Afton mine near Kamloops, British Columbia. The company had been founded in 1980 as DRC Resources Corporation, headquartered in Vancouver, to investigate previously explored mineral properties in Canada for their exploitation potential. One of these properties, acquired in 1999, was the Afton Mine which had produced gold and copper from 1977 to 1988. In 2005, the company sold its other assets to pursue the Afton project as it had emerged as a viable prospect for profitably developing, and they changed their name to New Gold Inc.

Peak Gold Ltd. contributed two operating gold mines to the new company: the Peak Mine in Australia and Amapari Mine in Brazil. Goldcorp had inherited those mines, along with others, when it merged with Wheaton River Minerals in 2005 and used GPJ Ventures Ltd, which was under the administration of Endeavour Financial, to spin off the two underperforming mines.[6] Goldcorp retained a 22% interest in Peak Gold and was paid US$200 million in the April 2007 deal.

Metallica Resources entered the merger as it was beginning to operate the Cerro San Pedro mine which had just produced to date 39,000 ounces of gold of its 1,500,000 ounces of proven and probable reserves. Metallica had acquired the property in 1995 for exploration purposes but they had struggled through its development phase in resolving environmental impacts and navigating the Mexican legal system to have its permits enforced.[7] Metallica also added its El Morro project, which was undergoing feasibility studies, in Chile to the new company.

Divestments and further acquisitions

Peak Gold's CEO Bob Gallagher was the first CEO of the new company.[8] They immediately closed the Amapari Mine in Brazil and then sold it, in 2010, to Australian mining company Beadell Resources.[9] Meanwhile, in May 2009, Western Goldfields Ltd merged with New Gold, making its Mesquite Mine New Golds's third operating mine. Similar to the other original companies, Western Goldfields was interlisted on the American and Toronto stock exchanges and was transitioning to become an operating gold producer.[10] The American company, which had moved its headquarters to Toronto in 2006, had acquired the old Mesquite Mine in Imperial County, California in 2003. While mining at Mesquite had ceased in 2001, the company pursued reactivation with an improved mine plan and achieved commercial production in January 2008 and produced a total of 108,325 ounces of gold in that year.[11] New Gold had produced 233,103 ounces of gold in 2008 from the Cerro San Pedro and Peak mines, followed by 301,773 ounces in 2009 as the Mesquite mine was added, then 382,911 ounces in 2010[12]

Past mines

Cerro San Pedro - Located near the village of Cerro de San Pedro in the Mexican state of San Luis Potosí, the Cerro San Pedro gold-silver project was operated by New Gold's Mexican subsidiary Minera San Xavier S.A. de C.V. The mine opened in 2007 with an expected 10 mine life. While it was a locally unpopular project due to impacts on water resources and heritage sites, New Gold continued its operations, having produced between 100,000 and 140,000 ounces of gold annually until it began winding down operations in 2016 and closing completely in 2017.[19][20]

Peak Mine - New Gold inherited from Peak Gold, the operation of the high-grade Peak gold-copper-lead mine near Cobar, New South Wales, Australia. New Gold produced 95,000 ounces of gold from the mine each year until it was sold in 2018.

Mesquite Mine - Located in Imperial County, California near the Algodones Dunes, the Mesquite gold mine was operated by New Gold through its Western Goldfields subsidiary between 2009 and 2018 when it sold. Despite the low-grade of the mineral deposit, the mine produced between 107,000 and 170,000 ounces of gold each year.

type	Public
traded as	tsx: NGD
foundation	January 1980
location city	Toronto
location country	Canada
key people	Robert Gallagher (CEO, 2007-16) Renaud Adams (CEO, 2018-current)
industry	Mining
products	Gold Silver Copper
revenue	$630 mil (2019)‡R1R‡
equity	$961 mil (2019)‡R1R‡
subsid	Minera San Xavier S.A. de C.V. (Mexico)
homepage	http://www.newgold.com