Name of the Project
Rainy River gold/silver project.

Location
Ontario, Canada.

Client
New Gold Inc.

Project Description
A feasibility study has identified openpit mining as the primary method to mine the Rainy River deposit, owing to the proximity of mineralisation to the surface. Deeper, higher-grade portions of the deposit will be mined using underground mining methods. The openpit mining production schedule incorporates an elevated cutoff grade strategy during the first nine years of mining to increase the mill feed grade. Material below the elevated cutoff grade will be stockpiled for processing during the later years of the project life.

In addition, the start of production from the openpit will signify the development of the underground mine, with initial underground production expected in 2018. The targeted mill throughput of 21 000 t/d will initially be sourced exclusively from the openpit and, once in full production, the underground mine will contribute 1 500 t/d of ore, with the balance of the 19 500 t/d coming from the openpit.

At full capacity, openpit mining operations will be undertaken with an equipment fleet comprising three 216 mm blast-hole drills, one 29 m³ and two 26 m³ hydraulic shovels, one 18 m³ wheel loader and twenty-two 220 t haul trucks.

A 10 m bench height has been selected for mining.

The openpit mine will provide process plant feed, starting at a nominal rate of 21 000 t/d, or 7.7-million tonnes a year, declining to 19 500 t/d, or 7.1-million tonnes a year, once the underground mine reaches full production.

Total mining of ore, waste and overburden will peak at 69-million tonnes a year. The operational stripping ratio, excluding waste and overburden stripping during the development phase, is 3.5:1.0.

The underground mine will be accessed through a 4 km decline from a surface portal located to the east of the openpit.

The underground design supports the ultimate extraction of 1 500 t/d of ore by longitudinal longhole open stoping. The underground mineralisation occurs in subvertical horizons varying in width from about 3 m to 20 m, with the weighted average width across the various zones being about 8 m. The various areas of underground mineralisation provide for flexibility in the production schedule to recover higher-grade material earlier in the mine life. Longitudinal long-hole open stoping in each zone will proceed in a retreating pattern from the strike extent of ore to a common access point on all levels. Mining is scheduled to proceed upwards from the lowest level of the zone or from an adopted sill elevation, with backfill providing the working platform for each successive lift. On average, stopes 8 m wide, 20 m long and 20 m high have been used for mine planning. At full capacity, ore handling from underground workings to the surface will be accomplished through a fleet of four 7 m³ loaders and six 45 t haul trucks.

The 21 000 t/d process plant will use conventional crushing, grinding, leaching, carbon-in-pulp and gold recovery technology to produce gold/silver doré. The overall design uses a simple and conventional flowsheet.

Run-of-mine material will be crushed to 165 mm in the gyratory crusher and subsequently conveyed and ground in the semiautogenous mill in closed circuit using a scalping screen and a pebble crusher. Undersize material from the scalping screen will be combined with the ball mill discharge and pumped to a cyclone cluster. The underflow from the cyclone cluster will feed the ball mill. A gravity circuit will treat a portion of the ball mill discharge.

The cyclone overflow will be thickened in a preleach thickener and pumped to the cyanide leaching circuit, which is designed for about 30 hours of retention time.

Jobs to be Created
There are 243 people currently on the full-time operations team, with more than 70% from local communities, including more than 30% from Indigenous communities.

Net Present Value/Internal Rate of Return
Not stated.

Value
The total estimated development capital cost for the project has increased from $877-million to $982-million.

Duration
The mine is expected to start production in mid-2017.

Latest Developments
Construction at Rainy River is more than 55% complete, with major items such as the power line, complete. The line is on schedule to be connected to the grid this month.

The tailings management facility amendment was submitted in August and is expected to be approved by mid-2017. The revised facility’s new starter dam, which does not require an amendment, should provide capacity for about six months of operation.

Construction on the five amended water dams was resumed in August, with two of the five completed. All five are expected to be completed this month.

The company expects all mechanical and electrical instrumentation in the processing facility to be completed by late April 2017.

New Gold reports that mining activities continue to ramp up according to plan, saying the team is currently operating at 85 000 t/d.

Meanwhile, New Gold has said it will defer the development of the underground mine by one year to the second half of 2018 to preserve capital. New Gold advised that the initial underground development is estimated to cost about $100-million over a two-year development period and that the deferral will better position Rainy River to generate robust free cash flow once the mine starts production in mid-2017.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
The development of New Gold's Rainy River gold project is proceeding on time and within budget, with first production slated for mid-2017.

Contact Details for Project Information
New Gold media and communications, Julie Taylor, tel +1 416 324 6015, fax +1 416 324-9494 or email julie.taylor@newgold.com.