Located in Imperial County, California, the Mesquite Mine is an open pit, heap leach operation which New Gold acquired in June 2009 as a result of a business combination with Western Goldfields Inc. Previously, Western Goldfields had turned Mesquite from an overlooked, undervalued asset into a mine with terrific production potential ahead.
In 2014, production of nearly 107,000 ounces of gold remained consistent with 2013 as increased grade offset a 5 percent decrease in ore tonnes placed on the pad, resulting from a focus on waste stripping in the first half of 2014. During the latter part of the year, a large number of recoverable ounces were placed on the leach pad that did not have sufficient time to fully work through the process by year end. This has positively impacted production in 2015, with the mine producing 10,683 ounces of gold in January alone.
2014 total cash costs of $909 per ounce were consistent with 2013 and below the guidance range. Costs benefitted from a combination of lower total tonnes moved and lower diesel prices. Cost reduction remains a priority at the mine, particularly through the rigorous continuous improvement strategy being introduced by New Gold this year.
For 2015, production at Mesquite is expected to increase by about 8 percent, driven by an expected increase in gold grade. The mine expects to move about 15 percent more total tonnes than in the prior year, which will somewhat impact costs. However, the impact should be partially offset by lower diesel prices and increased production.
Grade is scheduled to move up toward reserve grade in 2016 and beyond, bringing the mine back to historic production rates. This targeted performance improvement is expected to be driven by an increase in ore tonnes placed and grade, and lower sustaining capital expenditures.
With a team focused on increasing production and reducing costs, Mesquite has a bright future as a key contributor to New Gold’s production.