Exploration success at New Gold’s New Afton C-Zone could boost mine life beyond current plan

TORONTO (miningweekly.com) – TSX- and NYSE MKT-listed gold producer New Gold late on Monday reported that exploration results from its British Columbia-based New Afton mine’s C-zone could potentially add a further five years to the mine’s life at current throughput rates.

The company announced that results from the C-zone indicated a potential mine-life extension beyond the initial five years estimated in the February feasibility study. The results were potentially quite encouraging as they would build off the current five-year feasibility study mine life, but likely with only minor incremental capital requirements needed to push into the extended zone of mineralisation.

This potentially bolstered the economic returns on the $402-million project, given that the study showed an after-tax net present value of $84-million and an internal rate of return of 10.3%, based on $1 200/oz gold and $2.75/lb copper prices.

The New Afton C-zone feasibility study added 25-million tonnes of gold and copper ore to New Afton's mineral reserves.

New Gold advised that drilling along strike from the upper portions of the current C-zone block cave volume had intercepted copper/gold mineralisation extending up to 75 m to the west, as highlighted by hole 156. At the same time, drill intercepts along strike between the top of the currently estimated cave volume and the proposed extraction level indicated that the zone of mineralisation might narrow between 50 m and 75 m to the west before widening again between 75 m and 100 m to the west.

As part of the company's first half 2016 programme, New Gold had also drilled up to 100 m to 150 m west of the current block cave volume, with three holes (161, 164 and 165) intercepting significant copper/gold mineralisation over true widths ranging from 30 m to 55 m, further supporting the potential for the C-zone to remain open even farther along strike and down plunge to the west.

Since the start of the year, New Gold had completed about 60% of the company's planned 10 000 m 2016 exploration programme at New Afton. Based on the encouraging results received to date, the company planned to complete the remainder of its $6-million budgeted programme during the second half of the year.