Toronto-listed New Gold has extended the mine life of its New Afton and Rainy River operations and outlined a three-year operational outlook that projects strong free cash flow.

At New Afton, in British Columbia, copper and gold mineral reserves increased by 15% and 13%, respectively, year-on-year. The mine life has been extended to 2031, supported by the East Extension zone, which contains grades more than double those of the C-Zone. The C-Zone, meanwhile, has seen its mineral reserves increase by 27% with an expanded draw height of 450 m, achieved at no additional capital cost. Production is scheduled for 2026.

In Ontario, Rainy River’s mine life has also been extended, with the Phase 5 pit expansion pushing openpit mining to 2028 and keeping the mill full until 2029. Underground reserves have grown to 1.34-million ounces of gold, with gold mineral resources rising by 76% compared with 2023. New Gold said it would undertake additional technical studies to assess openpit expansion opportunities.

“Today's life-of-mine plans successfully outline New Gold's strong production profile with reducing costs, strong free cash flow generation and increasing net asset value, while also highlighting exciting opportunities to build on over the longer term,” said president and CEO Patrick Godin.

New Gold expects consolidated gold production to increase by 16% in 2025 to between 325 000 oz and 365 000 oz, driven primarily by higher output at Rainy River. By 2026, gold production is expected to rise by 55% compared with 2024 levels, reaching up to 490 000 oz, while copper production is set to nearly double by 2027, reaching between 95-million pounds and 115-million pounds.

All-in sustaining costs (AISC) are projected to decline steadily over the next three years. In 2025, AISC is expected to range from $1 025/oz to $1 125/oz, a 17% decrease from 2024. By 2027, AISC is forecast to drop by about 70% to between $400/oz and $500/oz. This reduction will be driven by higher production, lower cash costs, increased by-product credits, and lower sustaining capital expenditure (capex) as growth projects reach completion.

“Our three-year outlook illustrates the significant margins our low-cost operations plan to achieve,” said Godin. “Given the significant reduction in costs and expanding margins, at current commodity prices, New Gold is expected to generate significant cash flow over the next three years, translating to an impressive free cash flow yield through 2027.”

New Gold anticipates capex of $270-million to $315-million in 2025 as the New Afton C-Zone and Rainy River underground ramp up. By 2027, total capital is expected to decline significantly to $70-million to $95-million as key infrastructure projects are completed.

Meanwhile, the company is maintaining a strong focus on organic growth through exploration, with a consolidated exploration budget of about $30-million for 2025. At New Afton, drilling will continue in the Eastern Sector, specifically the K-Zone, which has yet to be included in mineral reserves. Rainy River exploration will prioritize adding high-tonnage openpit material to sustain mill operations beyond 2029, with additional studies underway to evaluate potential openpit extensions.