New Gold believes its Rainy River Mine may have some longevity to last well into the next decade.
The Toronto-headquartered gold company is preparing to start mining a new gold zone at its northwestern Ontario mine by year’s end, and sees great potential in finding new sources of gold that could extend the operation’s life.
Rainy River is an open pit and underground mine, 65 kilometres northwest of Fort Frances.
In its rosy operational forecast released on Feb.8, New Gold predicts strong cash flow over the next three years, thanks to growth projects coming online at Rainy River and its Afton copper-gold mine in British Columbia.
Based on untapped mineral reserves in the ground, Rainy River’s mine life is expected to last until 2031. But for the first time in a long time, the company is putting money into the drill bit to begin an exploration program this year.
The company is already mining underground at its Intrepid Zone, situated east of the pit. Later this year, first production from its nearby Main Zone begins in the fourth quarter.
Heading into 2024, gold production at Rainy River is expected to increase by four per cent this year over last. The production target is somewhere in the range of between 250,000 and 280,000 ounces.
On the exploration side, the company is spending US$5 million to extend existing gold zones and prove up some potential new ones.
Beyond the area where there is active mining, the company intends to generate a target list to find new deposits.
Between 2017 and 2022, little exploration activity was done at Rainy River. The focus then was on stabilizing the whole operation and ramping up gold production.
As a result, there were promising exploration targets that went untested. This year’s exploration program will be drilling these targets from the surface and in the underground portion of the mine.
The plan is to convert gold resources in the ground into gold reserves, which is mining vernacular for gaining more geological knowledge and economic confidence to keep on mining, while also searching for new gold zones on its 6,140-hectare property.
The company said there’s gold potential near the surface, which could be extracted by open-pit methods, and mineralization deeper down in a gap between the Intrepid and Main Zones.
In a statement, New Gold president-CEO Patrick Godin said the groundwork has been laid to prepare to “unlock the long-term value of our operations.”
Beyond 2025, New Gold said its strategic objective with both Rainy River and Afton is to reach annual production of 600,000 ounces a year until at least 2030 with a minimal amount of spending.
Between $145 million and $165 million will be spent at Rainy River this year. About $45 million to $55 million of that will be spent for ongoing underground development of the Intrepid and the Main Zone.
At Rainy River, the company believes the underground portion can achieve steady production of 5,500 tonnes per day by 2027.
