Heavy rainfall and flooding in the Fort Frances area severely drenched gold production plans at New Gold’s Rainy River open-pit mine.
In releasing its second quarter operating results for the period ending June 30, the Toronto mining company described the total tonnes mined at the northwestern Ontario open-pit operation as being “below expectations.”
Spring flooding in the pit site, 65 kilometres northwest of Fort Frances, affected the mining rate, mine sequencing, and their plans to access to higher grade portions of the mine during the second half of this year.
Wet conditions resulted in lower grades processed and lower gold ounces produced during the quarter, which means the company intends to process low-grade ore material.
Gold production at Rainy River through the first half of this year amounted to 101,349 ounces, down from 107,557 ounces recorded during the same period last year.
The mine’s 2022 gold production target is being revised and reduced from what was originally a forecasted range of between 265,000 to 295,000 gold equivalent ounces, to now 230,000 and 250,000 ounces.
Due to lower gold production and inflationary cost pressures, operating expenses are now expected to be between $960 to $1,040 per ounce from the previous $730 to $810 per ounce. All-in sustaining costs are now expected to be between $1,620 to $1,720 per ounce from what was initially $1,270 to $1,370 per ounce.
Commercial production at Rainy River began in October 2017. The workforce at the site is roughly 420 employees.
Over the next few years, mining operations will gradually shift from the pit to underground as construction continues on Intrepid Zone. This will extend the mine's operating life to 2031.
The company said, to date, everything is on schedule for the start of production by this year’s fourth quarter.
"Rainy River experienced challenges during the quarter as the Fort Frances area saw extreme rainfall and flooding," said company president-CEO Renaud Adams. "I remain confident about the increased production profile as outlined in Rainy River's latest updated technical report announced earlier this year.
Besides running the Rainy River mine, New Gold operates the New Afton copper-gold mine in British Columbia.
