Rainy River mine construction behind schedule.

• Position: NEWS

Cost overruns and delays in digging out an open-pit gold mine near Fort Frances resulted in sweeping management changes at New Gold's Rainy River project in northwestern Ontario.

In a Jan. 30 news release, the Toronto-based miner said the project is $195 million over budget and is months behind schedule in starting commercial production this fall.

The company is targeting first production in September, approximately three months later than its previous estimate, with full-blown commercial production starting Nov. 1.

The three-month delay was attributed to "slower than planned ramp-up of mining rates," which impacted the delivery of construction materials.

These conclusions were reached after New Gold conducted a detailed review of the project in January.

The mine site is 65 kilometres northwest of Fort Frances in Richardson Township.

An estimated $515 million will be spent this year on development.

An additional $40 million that was earmarked for use during the mine's operating period has now been shifted into the construction capital category.

A temporary construction camp will also be required for an additional three months at a total cost of $5 million.

As a result of the project's delay, some personnel moves were made.

Back aboard as interim chief operating officer is Ray Threlkeld, the former president-CEO of Rainy River Resources, who helped develop the deposit before it was sold to New Gold for $310 million in 2013.

Greg Bowkett, general manager of New Gold's Peak Mines in Australia, slides in to take the same position at Rainy River.

Pierre Legare, a 30-year veteran of mine...