Q1 2021 New Gold Inc Earnings Call

Price of $17 $188 per ounce and sales of $13 3 million pounds of copper at $3 83 per pound.

Q1 revenue was 16% higher than the prior year quarter due to higher metal prices, our operating cash flow before working capital adjustments was $63 7 million or <unk> <unk> per share for the quarter higher than the prior year quarter, primarily due to higher metal prices.

<unk> recorded net earnings of $15 1 million or <unk> <unk> per share during Q1 compared to a loss of <unk> <unk> per share in Q1 2020.

After adjusting for other certain charges net earnings were $8 1 million or <unk> <unk> per share in Q1 compared to a net loss of $18 million of <unk> <unk> per share in the first quarter of 2020 difference is driven by higher revenue and lower depreciation our Q1 adjusted earnings includes adjustments related to our unrealized.

Adjustments on the rainy River stream on.

The mark to market and the free cash flow of royalty.

Our MD&A has additional details on the non-GAAP measures discussed cash.

Capital expenditures on an excellent.

We're around $56 4 million.

In the quarter of $37 9 million was spent on sustaining capital and $18 5 million on growth capital sustaining capital spend was primarily related to planned tailings work of both the operating assets and be three mine development at new Afton growth capital was focused on project development, specifically the top project at.

The new Afton, we remain on track to achieve both operating and capital guidance on slide seven provides our capital structure at March 31, 21, we had $131 million in cash and $435 million on liquidity.

With that I'll turn the call over to Renaud Adams our CEO.

Thanks, Rob and thanks again, everyone for joining us today I'm on the slide nine for additional comment on the sustainability and ESG.

The flight of our health and safety of global.

On the new role of new Bolthouse for sustainability focused area.

Indigenous people the tailing management water employment, all of which will be fully addressed in our upcoming sustainability animal report.

We have adapted our sustainability effort to align with the most pressing ESG issues facing our company on the mining industry.

As we look forward it is not about presenting a new way of operating with looking at what we are actually doing and looking for area to improve we can build on.

We are currently working on our 2030 of Roadmaps with ambitious goal to reduce our emissions.

While continuing to create value to our host community in the area we operate.

The slight have implemented employee driven programs that help generate ideas for energy efficiency to help achieve our overall carbon footprint both price environmental the management systems and include water climate tailing risk on our operation.

Operation actively seek out partnership and work with local communities to understand the cultural the traditional aspect from <unk>.

Brexit reclamation and environmental monitoring on an ongoing basis.

Going forward, we will implement of Mark on France with climate action plan that also offline support communities for electrification and energy efficiencies.

This will help us achieve our emission reduction goals.

While New act on is already additives first electric equipment to his underground mobile fleet.

Our objective continues to be very clear, we want to create value minimize environmental impact and do our part of achieving larger goal global objective climate water tailings management and indebtedness relation.

While the continued to price rises the health and safety and wellbeing of our people.

And the people in the community in which we operate in.

Just a quickly on and touch base on the COVID-19 update the company was the first really to bring the private testing to the rainy River.

Just on target.

And has worked with the the northern Western.

Alright helps union and the implementation.

The on slide PCR testing provides resolved within three hours of testing.

Individual with positive results from our side PCR testing are directed to take the second illustrated by the margin.

The unit.

Which confirmed the positive results with the separate yes.

These positive the Incase in house cases have previously been referred to has it non vacancy of which was really a terminology day carbon accounts of the early days. So omni public panel result, initially come to their profit.

However, going forward the cases that were previously reported as non consumables.

Referred as I presume part of it.

In case of income we will continue to be treated as such as the majority of the positive cases really has been the effected on site.

The contact tracing is also performed by the the site team and through public count to isolate any infected individual and limit further exposure.

There are currently on the two active cases of the rainy River mine on.

The prior cases, including the 10 the individual referred in our April 21 of the news release, all of whom work confirm as positive cases by the northwest public health.

Have recovered following the applicable client the period and I'm also very pleased to reported are currently no active cases of COVID-19, and the new Afton the mine.

Yes.

Moving to slide 10.

Reinvesting in our future continue in the quarter.

The map shows all of the minority positions currently held by new of all across Canada, including a significant 8% gold streaming the Blackwater of development mine on Artemis scope, we simply the company added three new position and of Harte <unk> and Angus.

Our 14, 9% in the heart it was really unfortunate it to invest in a good grade underground mine in Canada. So of unique opportunity for new ago, given the team the team's strong skill set towards underground mines, including in the in that part of Canada.

We like the new management in place that's been.

Recently joined the company's significant on.

The our explore land package from more than 1 million ounce of gold resources of over 10 grams, a ton and the potential to expand to over 100000 ounces of productions of year.

With regard to a 14, 9% of <unk>. This is of significant land package in the neighborhood of of the new Afton mine that we on NBC.

And their experience of explore portion of the data leverage from an historic gold mine and prospective land package.

So potential from multi million ounce of resources.

With regards to our nine 9% and Angus, which was really of smaller investment for new Gulf since the prospective land package and already mining camp.

Variance explorer with this very strong track record of value creation in Canada.

So we're very pleased with the.

With the landscape and the.

And the strategic in the minority investment we have been capable to put together over the last day smarter.

Moving to operational performance I'm now on slide 11 for additional comment on rainy River first quarter performance.

First I would say that I am extremely pleased with the overall performance while it was a lower grade water, which was the plan.

We've seen again, the mine and mill, achieving another good quarter of productivity.

The open pit mine achieved nearly 151000 tons per day in line with our 'twenty one target of also 151 tons per day.

And this compare really with the roughly 127 700 tons per day on the same period last year.

The mill did extremely well as well of tree of achieving 26300 tons per day.

This compared with 18400 tons of day last year so significant.

Improvement.

For the same period last year, considering the winter conditions and so forth.

The thing that I'd like to point out and that really speak of our overall improvement year over year the.

The same period last year.

On Panther the period of 2021, the production achieved the 10% improvement over the same period last year and really despite the fact of degraded in the Q1 'twenty one was roughly 20% below.

Last year period.

On the same I understand the time last year, so a significant improvement and 10% of our productions over 20% of last great same on the cash cost.

The slightly below the.

At the same period last year, despite as I said, the much lower grade at the Spider.

A stronger Canadian dollars, so all of which when you really compare both superior off of.

Q1 last year and this year it speaks for itself.

Because of the significant improvement we've made at the asset and we will continue to improve further down the road. The average grade of <unk> eight grams, a tonne was the lower grade was.

If it was planned as such our mine plan has the previously discussed the consider lower grade in the first half of the year in this line of higher strip ratio and as we move forward towards the second half of the year.

We're expecting an increase of a great of an increase of production of significant reductions on our cost and the mine remains on track to achieve it.

Its guidance.

On slide 12 at new Afton.

There was the lower productivity as the mine continues to ramp up and achieve quite frankly pretty good productivity in the second half of the quarter. Following the mud Rush incident, we had lower grade on plan as we continue to exhaust our current lift one cave.

And in the recovery level as we transition now eventually to the <unk> cave.

And eventually down the road to the C Zone cave.

On the preparation work on <unk> two news over the over the quarter, we're expecting our pyramid into Q2 and then after we will initiate the block cave the sequence of the <unk> and continue to ramp up over the year. So March of Karma as we advance in the Q2 RC zone of development.

And in the construction plan.

<unk> is on track for a start of the season on the <unk> plan.

So both mines are really on track to achieve of their guidance, we're very pleased as well with the new.

First facet of exploration result of new Afton.

The first the <unk>.

First the face of drilling of nearly 10500 meters showed us some pretty interesting interpretations on the defined patterns pretty similar to the new Afton deposits and we are now engaged in the second phase, where we are going to be drilling deeper.

To follow up on those trends.

We got some underground drilling program as well that has comment commencing of now like focused on the three priority targets of more to come on this as well as we advance in the in the year.

So really this the stock completing the presentation portion of the call I will now turning the call back to the operator to for the Q&A session.

Operator.

Great. Thank you guys.

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