Investor day 2013 v final

  • Published on

  • View

  • Download


  • 1.Investor Day 2013February 5, 2013Arcadian Loft1

2. Discussion topicsCompany Overview Randall Oliphant2012 Operating Performance and 2013 OutlookErnie MastHealth, Safety and Corporate Social ResponsibilityBob GallagherDevelopment ProjectsBob GallagherReserves and Resources and Exploration Update Mark PetersenNew Afton Value Enhancing InitiativesKurt KeskimakiConclusion Randall Oliphant2 3. Cautionary statementAll monetary amounts in U.S. dollars unless otherwise statedTotal cash costs shown net of by-product sales unless otherwise statedCAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTSCertain information contained in this presentation, including any information relating to New Golds future financial or operating performance may be deemed "forward looking". All statementsin this presentation, other than statements of historical fact, that address events or developments that New Gold expects to occur, are "forward-looking statements. Forward-lookingstatements are statements that are not historical facts and are generally, but not always, identified by the use of forward-looking terminology such as "plans", "expects", "is expected", "budget","scheduled", "estimates", "forecasts", "intends", "anticipates", projects, potential, "believes" or variations of such words and phrases or statements that certain actions, events or results"may", "could", "would", should, "might" or "will be taken", "occur" or "be achieved" or the negative connotation. All such forward-looking statements are based on the opinions and estimatesof management as of the date such statements are made and are subject to important risk factors and uncertainties, many of which are beyond New Golds ability to control or predict.Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to known and unknown risks, uncertainties and other factors that may causeactual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Such factors include, withoutlimitation: significant capital requirements; fluctuations in the international currency markets and in the rates of exchange of the currencies of Canada, the United States, Australia, Mexico andChile; price volatility in the spot and forward markets for commodities; impact of any hedging activities, including margin limits and margin calls; discrepancies between actual and estimatedproduction, between actual and estimated reserves and resources and between actual and estimated metallurgical recoveries; changes in international, national and local governmentlegislation in Canada, the United States, Australia, Mexico and Chile or any other country in which New Gold currently or may in the future carry on business; taxation; controls, regulations andpolitical or economic developments in the countries in which New Gold does or may carry on business; the speculative nature of mineral exploration and development, including the risks ofobtaining and maintaining the validity and enforceability of the necessary licenses and permits and complying with the permitting requirements of each jurisdiction that New Gold operates,including, but not limited to obtaining the necessary permits for the Blackwater project, in Mexico where the Cerro San Pedro mine has a history of ongoing legal challenges related to our EISand Chile where the courts have temporarily suspended the approval of the environmental permit for the El Morro project; the lack of certainty with respect to foreign legal systems, which maynot be immune from the influence of political pressure, corruption or other factors that are inconsistent with the rule of law; the uncertainties inherent to current and future legal challenges thecompany is or may become a party to,; diminishing quantities or grades of reserves; competition; loss of key employees; additional funding requirements; actual results of current exploration orreclamation activities; changes in project parameters as plans continue to be refined; accidents; labour disputes; defective title to mineral claims or property or contests over claims to mineralproperties. In addition, there are risks and hazards associated with the business of mineral exploration, development and mining, including environmental hazards, industrial accidents, unusualor unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance or inability to obtain insurance to cover these risks) as well as "RiskFactors" included in New Golds disclosure documents filed on and available at Forward-looking statements are not guarantees of future performance, and actual results andfuture events could materially differ from those anticipated in such statements. All of the forward-looking statements contained in this presentation are qualified by these cautionary statements.New Gold expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, events or otherwise, except in accordancewith applicable securities laws.3 4. Cautionary statement (contd)CAUTIONARY NOTE TO U.S. READERS CONCERNING ESTIMATES OF MEASURED, INDICATED AND INFERRED RESOURCESInformation concerning the properties and operations discussed in this presentation has been prepared in accordance with Canadian standards under applicable Canadian securities laws, and may not be comparable tosimilar information for United States companies. The terms "Mineral Resource", "Measured Mineral Resource", "Indicated Mineral Resource" and "Inferred Mineral Resource" used in this presentation are Canadian miningterms as defined in accordance with NI 43-101 under guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") Standards on Mineral Resources and Mineral Reserves adopted by the CIMCouncil on December 11, 2005. While the terms "Mineral Resource", "Measured Mineral Resource", "Indicated Mineral Resource" and "Inferred Mineral Resource" are recognized and required by Canadian regulations,they are not defined terms under standards of the United States Securities and Exchange Commission. Under United States standards, mineralization may not be classified as a "reserve" unless the determination hasbeen made that the mineralization could be economically and legally produced or extracted at the time the reserve calculation is made. As such, certain information contained in this presentation concerning descriptionsof mineralization and resources under Canadian standards is not comparable to similar information made public by United States companies subject to the reporting and disclosure requirements of the United StatesSecurities and Exchange Commission. An "Inferred Mineral Resource" has a great amount of uncertainty as to its existence and as to its economic and legal feasibility. It cannot be assumed that all or any part of an"Inferred Mineral Resource" will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or other economic studies. Readers arecautioned not to assume that all or any part of Measured or Indicated Resources will ever be converted into Mineral Reserves. Readers are also cautioned not to assume that all or any part of an "Inferred MineralResource" exists, or is economically or legally mineable. In addition, the definitions of "Proven Mineral Reserves" and "Probable Mineral Reserves" under CIM standards differ in certain respects from the standards of theUnited States Securities and Exchange Commission.TECHNICAL INFORMATIONThe scientific and technical information in this presentation has been reviewed by Mark Petersen, a Qualified Person under National Instrument 43-101 and an employee of New Gold.(1) TOTAL CASH COSTSTotal cash costs per ounce figures are calculated in accordance with a standard developed by The Gold Institute, which was a worldwide association of suppliers of gold and gold products and included leading NorthAmerican gold producers. The Gold Institute ceased operations in 2002, but the standard is widely accepted as the standard of reporting cash cost of production in North America. Adoption of the standard is voluntaryand the cost measures presented may not be comparable to other similarly titled measures of other companies. New Gold reports total cash costs on a sales basis. Total cash costs includes mine site operating costssuch as mining, processing, administration, royalties and production taxes, but is exclusive of amortization, reclamation, capital and exploration costs. Total cash costs are reduced by any by-product revenue and are thendivided by ounces sold to arrive at the total by-product cash costs of sales. The measure, along with sales, is considered to be a key indicator of a companys ability to generate operating earnings and cash flow from itsmining operations. This data is furnished to provide additional information and is a non-IFRS measure. Total cash costs presented does not have a standardized meaning prescribed by IFRS and may not be comparableto similar measures presented by other mining companies. It should not be considered in isolation as a substitute for measures of performance prepared in accordance with IFRS and is not necessarily indicative ofoperating costs presented under IFRS. A reconciliation will be provided in the MD&A accompanying the quarterly financial statements.(2) ALL-IN SUSTAINING CASH COSTSThe company is working with the World Gold Council and is in the process of adopting an all-in sustaining cash costs measure that the company believes more fully defines the total costs associated with producing gold.Although the definition is still preliminary, all-in sustaining cash costs, as currently defined, includes: by-product cash costs, corporate general and administrative expenses, exploration expense and sustaining capital.This metric is a non-IFRS measure.(3) PEA ADDITIONAL CAUTIONARY NOTEThis note regarding the Preliminary Economic Assessment (PEA) is in addition to cautionary language already included within the news release as required under NI 43-101. The Blackwater PEA is preliminary in natureand includes Inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is nocertainty that the PEA based on these mineral resources will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.This note regarding the preliminary economic assessment (PEA) is in addition to cautionary language already included in this news release as required under NI 43-101. The Blackwater PEA is preliminary in nature andincludes Inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is nocertainty that the PEA based on these mineral resources will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability. This news release includes information on NewGolds PEA with respect to the Blackwater Project, which was outlined in the PEA Technical Report filed on October 10, 2012. As disclosed in the news release, New Gold has, since the date of the PEA, updated themineral resource estimate for the Blackwater Project. Although the PEA represents useful, accurate and reliable information based on the information available at the time of its publication, and provides an importantindicator as to the economic potential of the Blackwater Project, the PEA is based on mineral resources estimates with an effective date of July 27, 2012, which do not reflect drilling conducted since their effective date,and the PEA does not reflect the latest mineral resource estimate. Certain assumptions used in the PEA, some of which relate to the July 27, 2012 mineral resource estimate, may have changed from those used for thenew resource estimate, causing a variation of parameters. Moreover, the updated mineral resource estimate may have an impact on New Golds plans on how it intends to develop the deposit, including pit outlines,production rates and mine life.4 5. Company Overview 5 6. New Gold overviewFocus on Value EnhancementEstablished Track Record Experienced/Invested TeamLow Cost/High MarginGrowing ResourcesDoubling Gold Production Organically Strong Balance SheetAccretive per share GrowthESTABLISHING THE LEADING INTERMEDIATE GOLD COMPANY6 7. 2012 to 2013 The path forward2012 Achievements 2013 ObjectivesForecasting additional 12% gold6% gold production growthproduction growth Targeting a further ~$145 perTotal cash costs(1) declined by $25 ounce reduction in total cashper ouncecosts(1)Average realized margin of $1,130Margin expected to grow toper ounce $1,325(2) per ounceNotes: 1. Refer to Cautionary Statement and note on Total cash costs. 2. 2013 estimated margin per ounce based on mid-point of range of total cash costs of $275 per ounce and an assumed gold price of $1,600 per ounce.7 8. 2012 to 2013 The path forward (contd) 2012 Achievements 2013 ObjectivesNew Afton achieved full production Evaluation of New Afton millahead of schedule (September throughput increase/C-Zone2012)explorationSuccessfully completed BlackwaterFocus on Feasibility Study andPreliminary Economic Assessment PermittingMeasured and Indicated resourcesIncrease resources organically atincreased by 10% per share; NewBlackwater, New Afton C-Zone andAfton extended mine life by two Peak Minesyears8 9. 2012 to 2013 The path forward (contd)2012 Achievements 2013 ObjectivesIncreased liquidity and balanceBuild increased flexibility throughsheet strength free cash flow generationStrengthened team with additions ofContinuously look forDavid Emerson to the Board of opportunities to add talentedDirectors and Ernie Mast as VPpeopleOperationsOutperformed S&P/TSX gold index(1) Strive to further history ofby 25%outperformanceNotes: 1. S&P/TSX Gold Index includes 54 gold companies in various stages of development/production.9 10. Board of DirectorsDavid Emerson, Former Canadian Cabinet Minister Martyn Konig, Former Chairman European GoldfieldsJames Estey, Former Chairman UBS Canada Pierre Lassonde, Chairman Franco-NevadaRobert Gallagher, President & CEO Randall Oliphant, Executive ChairmanVahan Kololian, Founder Terra Nova Partners Raymond Threlkeld, CEO Rainy River Resources Collectively over $125 million invested in New Gold 10 11. Growing resource base in solid jurisdictionsMeasured & Indicated Gold Resources per 1,000 sharesM&I Resources(2): 21.4 Moz5040Blackwater30 New Afton20 Cerro SanPedroMesquite10 - YE 2009 (1) YE 2010 YE 2011YE 2012El Morro(3)Track record of increasing M&I goldresources on a per share basisOperating ass...