Cerro San Pedro had a stellar year in 2015, with a 51 percent increase in production at lower costs, capping multiple years of strong performance before it transitions to residual leaching in 2016.
As planned, Cerro San Pedro’s 2015 production increased by 51 percent to 105,512 ounces when compared to 2014. The increase in annual production was due to a 66 percent increase in ore tonnes placed on the leach pad as mining activity in 2014 was primarily focused on waste stripping.
As a result of the mine’s strong operating performance, Cerro San Pedro’s 2015 gold production exceeded its guidance range of 90,000 to 100,000 ounces. At the same time, Cerro San Pedro’s full-year silver production of 1.5 million ounces increased by 37 percent relative to the prior year and was the key contributor to New Gold’s consolidated silver production being within the company’s guidance range of 1.8 to 2.0 million ounces.
Cerro San Pedro’s 2015 costs were well below guidance. All-in sustaining costs of $879 per ounce of gold, including total cash costs of $865 per ounce, decreased by $475 per ounce relative to 2014. The significant decrease in costs relative to 2014 was attributable to the combination of higher gold sales volumes, the depreciation of the Mexican peso relative to the U.S. dollar and lower sustaining costs.
As expected, Cerro San Pedro completed its final full year of active mining in 2015. Gold production in 2016 is scheduled to decline to a range of 60,000 to 70,000 ounces as the mine transitions to residual leaching. Ore is scheduled to be mined and placed on the leach pad during the majority of the first half of 2016, after which Cerro San Pedro will begin residual leaching. Cerro San Pedro’s 2016 silver production is expected to remain in line with prior-year production since silver leaches over a longer time period, driving a slower decline rate in annual silver production during the residual leach phase.
2016 all-in sustaining costs and total cash costs are expected to remain in line with, or below, those achieved in 2015 despite the mine’s lower gold production base and the expected decrease in by-product revenues from the lower silver price. As the mine transitions to residual leaching, Cerro San Pedro’s operating costs are scheduled to decrease meaningfully as a result of reduced mining activity and lower general and administrative expenses.
Gold production from residual leaching in 2017 is expected to be approximately 40 percent of the targeted 2016 production, while silver production is expected to be approximately 1 million ounces.
The Cerro San Pedro team can be extremely proud of the mine’s record as an outstanding contributor.