Mesquite was once again a solid performer in New Gold's suite of assets in 2015. Production increased by 26 percent at lower costs compared to 2014, significantly beating guidance on both counts.
Mesquite Mine is located in Imperial County, California, approximately 70 kilometres northwest of Yuma, Arizona and 230 kilometres east of San Diego, California. It is an open pit, run-of-mine heap leach operation, which New Gold acquired in mid-2009 as part of a business combination with Western Goldfields.
Mesquite’s 2015 production increased by 26 percent to 134,868 ounces over 2014, as the operation benefitted from a successful leach pad expansion coupled with a large increase in ore tonnes placed on the pad. Mesquite achieved a 48 percent increase in ore tonnes placed on the leach pad, the benefit of which was only partially offset by lower gold grade. The combination of record ore tonnes placed and accelerated recoveries from the successful leach pad expansion resulted in Mesquite’s full-year production significantly exceeding its guidance range of 110,000 to 120,000 ounces.
Costs were lower than 2015 and below guidance. Mesquite’s 2015 total cash costs decreased by $166 per ounce to $743 per ounce relative to the prior year. This decrease reflected higher gold sales volumes and lower diesel prices. Mesquite’s all-in sustaining costs decreased by $110 per ounce to $1,156 per ounce when compared to 2014.
Reducing costs further is a constant focus at Mesquite, in particular through a continuous improvement strategy that is beginning to bear fruit. For 2016, Mesquite’s gold production is expected to remain in line with 2015, but with a decrease in costs attributable to continued operational efficiencies as well as lower diesel prices.
Expenditures in 2016 are expected to include $45 million for capitalized stripping, $12 million for plant and equipment, and $8 million to complete the leach pad expansion.
For 2017, production is expected to increase to over 150,000 ounces as gold grade should continue to increase. Higher production is scheduled to be coupled with lower costs.