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. Between 2013 and 2019 the mine produced between 69,000 and 105,000 ounces of gold each year.
Rainy River - The Rainy River mine is a gold-silver mine located within the Rainy River District in western Ontario, Canada. New Gold acquired mineral rights to the area in 2013 and immediately pursued its development so that it was able to achieve commercial production in late-2017. It is designed to be an open pit mine that would transition to underground tunnels over its 14 year life. It quickly became their best producing mine with 227,000 ounces of gold produced in 2018 and 253,000 ounces in 2019.
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. 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.
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. 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. Metallica also added its El Morro project, which was undergoing feasibility studies, in Chile to the new company.