January 30, 2017 / 3:01 PM / a year ago

New Gold warns of higher mine build cost, production delay at Rainy River

Jan 30 (Reuters) - Canadian miner New Gold Inc said on Monday first production from its Rainy River mine in Ontario would be delayed by three months and that it would cost $195 million more to bring the project online.

The company’s shares were down 11.5 percent at C$4.60 in morning trading on the Toronto Stock Exchange.

New Gold’s Randall Oliphant, who stepped down as executive chairman on Monday, had told Reuters in September that there would be no more cost over-runs at the mine, days after the company had raised its budget for the project by 11 percent to $1.05 billion.

Oliphant will remain on the company’s board. Hannes Portmann, who is currently president, will take on the role of chief executive officer, while board member Ian Pearce will become non-executive chairman.

New Gold also warned on Monday that it was facing a $100 million funding gap to pay for its operating expenses, and to start commercial production at its Rainy River mine in November. (Reporting by Vishaka George in Bengaluru; Editing by Shounak Dasgupta)

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