Q1 2022 New Gold Inc Earnings Call

Ankit Shaw: Thank you, Michelle, and good morning everyone. We appreciate you joining us today for New Gold's first quarter 2022 earnings conference call and webcast. On the line today, we have Renaud Adams President and CEO and Rob Chausse our CFO. Should you wish to follow along with the webcast, please sign in from our homepage at newgold.com.

Unknown Speaker: Thank you, Michelle. Good morning everyone. We appreciate you joining us today for New Gold's first quarter 2022 earnings conference call and webcast. On the line today, we have Renaud Adams, President and CEO, and Rob Chausse, our CFO. Should you wish to follow along with the webcast, please sign in from our homepage at newgold.com.

Ankit Shaw: Before the team begins the presentation, I'd like to direct your attention to our cautionary language related to forward-looking statements found on slides two and three of the presentation.

Speaker 1: Before before the team begins the presentation, I'd like to direct your attention to our cautionary language related to forward-looking statements found on Slides two and three of the presentation.

Ankit Shaw: Today's commentary includes forward-looking statements relating to New Gold. In this respect, we refer you to our detailed cautionary note regarding forward-looking statements in the presentation. You are cautioned that the actual results and future events could differ materially from those expressed or implied in forward-looking statements. Slides two and three provide additional information and should be reviewed.

Speaker 1: Today's commentary includes forward-looking statements relating to New Gold. In this respect, we refer you to our detailed cautionary note regarding forward-looking statements in the presentation. You are cautioned that the actual results and future events could differ materially from those expressed or implied in forward-looking statements. Slides two and three provide additional information and should be reviewed.

Ankit Shaw: We also refer you to the section entitled risk factors in New Gold's latest MDNA and other filings available on SEDAR, which set out certain material factors that could cause actual results to differ.

Speaker 1: We also refer you to the section entitled risk factors in New Gold's latest MDNA and other filings available on SEDAR, which set out certain material factors that could cause actual results to differ.

Ankit Shaw: In addition, at the conclusion of the presentation, there are a number of endnotes that provide important information and should be reviewed in conjunction with the material presented. I'll now turn the call over to Renaud.

Speaker 1: In addition, at the conclusion of the presentation, there are a number of end notes that provide important information and should be reviewed in conjunction with the material presented. I'll now turn the call over to Renaud.

Renaud Adams: Thanks, [inaudible], and good morning everyone. But before I pass it to Rob to discuss our quarterly financial results, I just wanted to take a moment to discuss some of the changes we've made at our company and the challenges we've experienced, like many of our peers, during the quarter.

Renaud Adams: Thanks and good morning everyone. So before I pass it to Rob to discuss our quarterly financial results, I just wanted to take a moment to discuss some of the changes we've made at our company and the challenges we've experienced, like many of our peers, during the quarter.

Renaud Adams: Over the past two years, our teams have adapted quickly to make changes in light of COVID. I'm very proud of our group and the health and safety focus at our operations. Like many of our peers, we've also experienced a higher level of COVID-19 cases earlier in the year, which impacted productivity levels to start 2022, but despite this, our teams were resilient, and we delivered a good quarter.

Speaker 4: I'm very proud of our group and the health and safe to focus at our operations. Like many of our peers, we've also experienced a higher level of COVID-19 cases earlier in the year, which impacted productivity levels to start 2022, but despite this, our teams, who were resilient, and we delivered a good quarter.

Speaker 2: Over the past two years, our teams have adapted quickly to make changes in light of COVID. I'm very proud of our group and the health and safety focus of our operations. Like many of our peers, we've also experienced a higher level of COVID-19 cases earlier in the year, which impacted productivity levels to start 2022. But despite this, our teams were resilient and we delivered a good quarter.

Speaker 2: I'm very proud of our group and the health and safe to focus at our operations. Like many of our peers, we've also experienced a higher level of COVID-19 cases earlier in the year, which impacted productivity levels to start 2022, but despite this, our teams, who were resilient, and we delivered a good quarter.

Renaud Adams: Inflation has challenged many of us in the industry and we're no exception. We felt the same pressure as our peers mainly on [inaudible] consumables, but also electricity at Rainy River. But I've been able to partially offset these higher prices with the benefit of having two Canadian assets in the period of the weakening of the Canadian dollar. We continue to evaluate potential optimization and assess cost reduction initiatives in an effort to mitigate these pressures. We remain committed to delivering on our guidance.

Speaker 2: Inflation has challenged many of us in the industry and we're no exception. We felt the same pressure as our peers mainly on diesel consumables, but also electricity at Raina River. But I've been able to partially offset these higher prices with the benefit of having two Canadian assets in the period of weakening of the Canadian dollar.

Speaker 4: We continue to evaluate potential optimization and assess cost reduction initiatives in an effort to mitigate these pressures.

Speaker 2: We continue to evaluate potential optimization and assess cost reduction initiatives in an effort to mitigate these pressures. We remain committed to delivering on our guidance.

Speaker 4: We remain committed to delivering on our guidance.

Renaud Adams: During the quarter, we also continued to advance on our longer-term priorities. At Rainy River, intrepid development [inaudible] and we look forward to initiating mining later this year. I'm also very pleased with the outdated Rainy River technical report we completed in March, which has expanded our mine life to 2031. I will discuss this later in the presentation, but this is a significant accomplishment for the team and a positive milestone for our business. At new [inaudible] the B three ramp-up continues, we've made good progress on the season development and we completed the commission for our [inaudible] and amended tailings facilities.

Speaker 2: We remain committed to delivery on our guidance.

Speaker 2: During the quarter, we also continued to advance on our longer terms priorities. At Rainy River intrepid development advanced and we look forward to initiating mining later this year. I'm also very pleased with the outdated Rainy River technical report we completed in March, which has expanded our mine life to 2031.

Speaker 2: I will discuss this later in the presentation, but this is a significant accomplishment for the team and a positive milestone for our business. At New Often the B3 ramp-up continues, we've made good progress on the season development, and we completed a Commissioner of our tickling and demanded tailings facilities.

Multiple speakers: [Renaud Adams] I'm very pleased to welcome Patrick [inaudible], as we knew him, as the new COO of [inaudible]. Pat brings extensive technical, operational, and capital execution experience in the mining sector and I'm sure his addition to our team will be invaluable and as we continue to add this key project to our company and unlock potential organic reports [inaudible], I'm really looking forward to hearing from Pat in our Q2 review and more to come as we move forward. I'm looking forward to building on our first quarter and continue to deliver value for all our stakeholders. With that, I will now pass it to Rob Chausse, CFO. Rob? [Rob Chausse] Thanks Renaud, and good morning. Slide five provides our operating highlights for Q1. Production details are consistent with our April production press release. During Q1, the company produced 87,600 gold equivalent ounces. The amount consisted of 8.2 million pounds of copper and approximately 58,800 gold ounces from Rainy River, 9,267 ounces gold ounces from New Aston for a total of 68,100 gold ounces. The lower equivalent gold production as compared to the prior years, primarily due to lower grade and tons process that at New Aston. Our operating expense was in line with our prior quarter. Consolidated haul and sustaining cost for the quarter were 17.78 per equivalent ounce, higher than the prior-year quarter, primarily due to higher sustaining capital spend and lower sales volume at New Aston, partially offset with higher sales volume at Rainy River. As Renaud mentioned, during Q1 we experienced inflationary challenges that has been experienced across the industry, particularly with regard to fuel prices and, with the benefit of a weaker Canadian dollars as well as optimization and cost production initiatives, we are off-stating a good portion of the inflationary pressures. Going forward we'll continue to work on minimizing any impacts.

Speaker 2: I'm very pleased to welcome Patrick Pat, you knew him as the COO of New Go. Pat brings extensive technical, operational, and capital execution experience in the mining sector and I'm sure his addition to our team will be invaluable. And as we continue to advance key projects of our company and unlock potential organic opportunities, I'm really looking forward to hearing from Pat in our Q2 review and more to come as we move forward. I'm looking forward to building on our first quarter and continuing to deliver value for all our stakeholders. With that, I will now pass it to Rob Chausse, CFO. Rob?

Robert J. Chausse: Thanks and good morning. Slide five provides our operating highlights for Q1. Production details are consistent with our April production press release. During Q1, the company produced  87,600 gold equivalent ounces. The amount consisted of £8.2 million of copper and approximately 58,800 gold ounces from Rainy River, 9,267 gold ounces from New Afton, for a total of 68,100 gold ounces. The lower equivalent gold production as compared to the prior years, primarily due to lower grade and tons processed at New Afton, our operating expense per ounce was in line with our prior-year quarter. Consolidated all-in sustaining costs for the quarter were 1778 per equivalent ounces, higher than the prior-year quarter, primarily due to higher sustaining capital spend and lower sales volume at New Afton, partially offset with higher sales volume at Rainy River. As Renaud mentioned, during Q1 we experienced inflationary challenges that have been experienced across the industry, particularly with regard to fuel prices and, with the benefit of a weaker Canadian dollar, as well as optimization and cost reduction initiatives, we are off stating a good portion of the inflationary pressures.

Robert J. Chausse: Turning to slide six, first quarter revenue was 175 million, driven by sales of approximately 70,500 gold ounces at an average realized gold price of 18.97 per ounce and sales of £9.2 million of copper at 4.53 per pound. Q1 revenue was 6% higher than the prior-year quarter, primarily due to higher metal prices, partially offset by lower copper sales volumes.

Speaker 6: First quarter revenue was 175 million, driven by sales of approximately 70.5 thousand gold ounces at an average realized gold price of 897 per ouns and sales of £9.2 million of copper at four 53 per pound. Q1 revenue was 6% higher than the prior year quarter, primarily due to higher metal prices, partially offset by lower copper sales volumes.

Speaker 3: Going forward we'll continue to work on minimizing any impacts. Turning to Slide six, first quarter revenue was 175 million, driven by sales of approximately 70,500 gold ounces at an average realized gold price of 18.97 per ounce and sales of £9.2 million pounds of copper at 4.53 per pound. Q1 revenue was 6% higher than the prior year quarter, primarily due to higher metal prices, partially offset by lower copper sales volume. Operating cash flow before working capital adjustments was 66.4 million, or 10 cents per share for the quarter in line with the prior year quarter. The company recorded a net loss of 7.8 million, or one cent per share during Q1, compared to net earnings of two cents per share in Q1 2020. After adjusting for certain charges, net earnings were 10.3 million, or two cents per share in Q1, compared to net earnings of one cent per share in the first quarter of 2021. Our Q1 adjusted earnings include adjustments related to our gains and losses related to

Robert J. Chausse: Operating cash flow before working capital adjustments was 66.4 million or 10 cents per share for the quarter in line with the prior-year quarter. The company recorded a net loss of 7.8 million or one cent per share during Q1, compared to net earnings of two cents per share in Q1 2020. After adjusting for certain charges, net earnings were 10.3 million or two cents per share in Q1, compared to net earnings of one cent per share in the first quarter of 2021. Our Q1 adjusted earnings include adjustments related to our gains and losses related to unrealized adjustments on the Rainy River stream mark to market and the free cash flow royalty at New Aston. Our MDNA has more details on these measures.

Robert J. Chausse: Capital expenditures--our total capital and leases for the quarter was 78.4 million, 55.5 million was spent on sustaining capital, and 22.9 million on growth capital. Sustaining spend was primarily related to planned tailings work at both operating assets: capital stripping at Rainy River and B3 mine development at New Aston. Growth capital was focused on project development, specifically the sea zone at New Aston and the underground and [inaudible] zone at Rainy River.

Robert J. Chausse: Slide seven provides details of our capital structure. During the quarter, we announced that we will be redeeming the remaining hundred million of our 2025 senior secured notes in mid-May and cash on hand as at March 31st, 2022 was 432 million dollars. The decrease in cash from the year-end is primarily due to interest paid and cash settlements on non-current derivative financial liabilities. With that, I'll turn the call back to Renaud.

Renaud Adams: Thanks, Rob. I will now make some additional remarks on our operational performance in the first quarter. I'm on slide ten.

Speaker 3: And cash settlements on noncurrent derivative financial liabilities. With that, I'll turn the call back to ril.

Speaker 2: Thanks Rob. I will now make some additional remarks on our operational performance on the first quarter. I' once llike that.

Renaud Adams: The Rainy River mine had a lighter quarter in terms of total tons mine, mainly due to higher COVID cases, and that started the quarter but which improved as the quarter progressed. We had a strip pressure of approximately five to one and this was in line with our strategic approach to use winter months for the main capitalized waste which [inaudible] positioning the phase four mining. The lower ton mine did not have a meaningful impact on grades and the total productions of nearly 60,000 gold equivalent was up from the same period of 2021.

Speaker 2: The rena River mine had a lighter quarter in terms of total tons mine mainly due to higher COVID-19 cases and that start of the quarter, but which improved as a quarter progressed. We had a striperpressure of approximately five to one and this was in line with our strategic approach to use winter months for the main capitalized waste, which focused on a position.ing the Phase four mining. The lower ton mine did not have a meaning for impact on grades. In the total productions of nearly six thousand gold equivalent was up from the same period of 2020: one to 2020. the milling rate was impacted by additional.'s 2020: one the milling rate was impacted by additional downtime related to crushing and convening six circuit in the in adverse whether conditions, impacting also the crross dockpile movement, all of which was back to normal as a quarter progressed. All in all, the te was very resilient and navigated around adverse conditions to data ver qu.

Renaud Adams: The milling rate was impacted by additional downtime related to crossing and conveying circuit and the adverse weather conditions impacting also the cross stockpile movement, all of which was back to normal as the quarter progressed. All in all, the team was very resilient in navigating around adverse conditions to deliver a great quarter.

Renaud Adams: Despite the inflationary pressures, the team delivered lower operating expenses compared to the same period of 2021 and a free cash flow of approximately $15 million for the quarter. Rainy River continues to work on seeking ways to reduce cost, improve productivity, so such increase of fuel and consumables can partially, be fully be mitigated. For example, the mining team delivered an improved tire life year-over-year of nearly 40% off setting current potential and further increase of tire prices.

Renaud Adams: The effort continues in improving order consumable users, such as [inaudible] and cyanide, and we continue to see potential improvement in our overall pit operational efficiency with objective to achieve production with use of less [inaudible], for example, so we reduce operational and maintenance cost present and future. Bringing the mill back to expected 27,000 tons a day mark would also be a huge contributor to our overall cost performance. I have just returned from Rainy and I remain very positive on our ability to deliver on our 2022 plan.

Speaker 4: With objective to achieve production with use of less dru, for example, So we reduce operational and maintenance cost presentis and future.

Speaker 4: Bring the mill back to expected. 27.01 thousand a day Mark will also have a huge contributor would also be a huge contributor to our overall cost performance. I have just returned from Rainy and I remain very positive on our ability to deliver on our 2022 plan.

Speaker 4: Future.

Speaker 2: Bring the mill back to expected. 27.01 thousand a day Mark will also have a huge contributor would also be a huge contributor to our overall cost performance. I have just returned from Rainy and I remain very positive on our ability to deliver on our 2022 plan.

Renaud Adams: The entropic development continued in the first quarter, with over 500 meters of total development achieved. We are now developing an ore on level 175, 150, and 125 in prep for first long holes hoping to take place in the second half of the year and the reconciliation to date is in line with the resource model.

Speaker 2: The entropid development counany in the first war with over 500 meters of total development achieved. We are now developing an or on level 100 and vent, y 500 andfifty, 100 and twenty five in prep for first long holes stoping to take place in the second half of the year and the reconciliation to date is in line with the resource model.

Renaud Adams: On slide 11, I'm very pleased with the result of our updated technical report at Rainy River, which has extended its mine life to 2031. Our updated mine plan illustrated an attractive average production profile of 310,000 gold equivalent ounces over the period of 2022-2027 and over 250,000 gold equivalent ounces for the whole life of the mine.

Speaker 2: On slightly 11. I'm very pleased with the result of our updated technical report at Rainy River, which has extended a mine life to 2031. our updated mine line illustrated an attractive average production profile of 31 thousand gold equivalent anounis over the period of 2022- 2027 and over 25 thousand gold equivalent anounces for the whole life of mine.

Renaud Adams: With full transition from open pit to underground during the period of 2020-2026, for an estimated growth capital of only $71 million to complete the underground preproduction work for both entropic and [inaudible] on a very attractive cost approach, using in-pit portal design to access mineralization with minimal development required.

Speaker 2: With full transition from open pid to underground during the period of 2000 and twent y 20 and 26, for an estimated gross capital of only sevenvent $1 million to complete the underground preproduction work for both entrepid and surance ROS on a very attractive cost approach, using inpit oral design to access minerization with minimal development required.

Renaud Adams: For the open pit portion, significant reduction of strip ratio and sustaining capital post 2023 once all capitalized stripping is complete, reducing total mining and maintenance requirement. The overall life of mine, all-in sustaining costs of nearly 1050 per gold equivalent announced bringing excellent margin and free cash flow as we deliver on our execution.

Speaker 2: For the open pit portion. Significant reduction of strip ratio and sustaining capital post 2023: one all capitalized stripping is complete, reducing total mining and maintenance requirement.

Speaker 4: The overall life of mine, all-in sustaining costs of nearly 1050 per gold equivalent announced bringing excellent margin and free cash flow as we deliver on our execution.

Speaker 2: So overall life of mine all in sustaining costs of nearly 1050 pergo equivalent announced bring excellent margin and free cash flow as we deliver on our execution.

Renaud Adams: On slide 13, in-like water at the New Aston lower ton lines were perfectly aligned with the planned completion of the lift one activities, with the exceptions of recovery level, which will continue until we initiate detailing disposition planned for later this year. The B3 development and production ramp-up continued in Q1 and all efforts are been made to accelerate the completion of development ahead of schedule which is currently planned for the fourth quarter of this year. The sea zone development continues to advance in the first quarter with nearly 930 meters of total development achieved and successful commissioning of the newly built task facilities months ahead of initiation of our inventory position.

Speaker 2: On Slide 13: new often in- in-lth water at new often as the lower ton les were perfectly airlineed with the planned completion of the Lift one activities.

Speaker 4: With the exceptions of recovery level, which will continue until we initiate in detailing disposition planned for later this year. The B B three development and production ramp-up continueed in Q1 and all effort are been made to accelerate completion of development ahead of schedule which is currently planned for the fourth quarter of this year. The season own development continue to advance in the first quarter with nearly 930 meters of total development achieved and a successful commissioning of the newly buil cat facilities months ahead of initiation of our inive position.

Speaker 2: With the exceptions of recovery level, which will continue until we initiate inputtailing disposition planned for later this year. The B three development and production ramp-up continueed in Q1 and all effort are been made to accelerate completion of development ahead of schedule, which is currently planned for the fourth quarter of this year. The season own development continue to advance in the first quarter with nearly 930 meters of total development achieved and a successful commissioning of the newly bubuild tap facilities months ahead of initiation of our inventensive position.

Renaud Adams: During the quarter, we completed 32 diamond drilling holes [inaudible] nearly 10,500 tons of underground in film or in a [inaudible] were drilled last year and also one hole in exploration on the [inaudible]. The company intends to release an exploration update in the latter part of the second quarter, which would also include an update on our exploration efforts operating.

Speaker 2: During the quarter we've completed 32 diamond drilling hole followling nearly 10.5 thousand of foundunder underground in film or an, a perificial intelligence target, a wereaddrill last year and also a one hole in of exploration on the cherch treree tramp.

Speaker 4: The company intends to release an exploration update in the latter part of the second quarter, which would also include an update on our exploration efforts operating.

Speaker 2: The company intends to release an exploration update in the latter part of the second quarter, which would also inclued an update on our exploration efforts operatingon Slide 14. and, as I conclude on the presentation portion of this callat, the radio River. We continue to bid on our recently file updated technical a report and, while we continue to seek opportunities to improve margin on remaining open ounces, we are now turning our strategic efforts on delivering a strong transition to underground mining with bring first, interrepid and production at new after completion of the B threeredevelopment and ramp up remains our key priority, while we continue to deliver the season on time and on budget, which include receiive a permit in the second half of 22. I want to thank all our employees and contractor for the restless efforts.

Renaud Adams: On slide 14 and as I conclude on the presentation portion of this conference, the Rainy River will continue to build on our recently filed updated technical report and while we continue to seek opportunities to improve margin on remaining open pit ounces, we are now turning our strategic efforts on delivering a strong transition to underground mining with bringing first intrepid and production.

Speaker 4: The radio River. We continue to build on our recently filed updata technically for a report and while we continue to seek opportunities to improve margin on remaining open ounces, we are now turning our strategic efforts on delivering a strong transition to underground mining with bring first, repid and production.

Renaud Adams: At New Asten, the completion of the B3 development and ramp-up remains our key priority, while we continue to deliver in season, on time, and on budget, which include received other permit in the second half of 2022.

Renaud Adams: I want to thank all our employees and contractors for their restless effort and commitment in executing on our 2022 guidance, and a very special thanks to our board of directors, community partners, and shareholders for their continued support in such a challenging time. In my opening remarks, I made a comment that Pat is joining us and it's his first day sitting right next to me today and I would ask you Pat, if you have just like any first comments and welcome.

Speaker 4: And commitment and executing on our 2022 guidance, and a very speatial Thank to are aboard of Director, community departner and shareholders for the continued support in such challenengge time. In my opening remarks, I made a comment that the path is joining us and its first day sitting right next to me today and I would ask you PAT, if you have just F.

Speaker 2: And commitment and executing on our 2022 guidance and a very speatial Thank to Board of Director community partner and shareholders for the continued support in such challenge time in my opening remark I made a comment that the path is joining a us and its first day sitting right next to me today and I would ask you that if you have just like.

Patrick Godin: Yeah, thank you, Renaud. I'm really pleased to join New Gold. It's a great working experience as well, and we worked together in the past and to join Renaud and the team it's really exciting for me. Well, [inaudible] approach, I think it's value that is crucial for me and the team is doing a good job on site. I will do my best to reinforce that and to provide a safe working place for the workers and that is crucial for New Gold. And also to continue to be in compliance with our performance and to maintain and improve our relationship with our local stakeholders and first nation group who are supporting us and that aspect I think for me is crucial.

Speaker 2: First comments and welcoming now. Thank you, Thank you, new. I'm really pleased to to join the new gold now only having and working experience with Rob when we to work together in the past and to join a new in the team it. ', S. It's exciting for me- well, nearly you had toorizise the L and cfety approach- and I think it's value that is crucial for me.

Speaker 9: and the team is doing a good job on site. I will do my best to reinforce that and to provide a safe working place for the workers and that is crucial for New Gold.

Speaker 5: So and the guys are doing- a team is doing the challengman site, but I will do my best wereinforce that to proves safe working place. The workers is crucial for new gold.

Speaker 9: And also to continue to be in compliance with our performance and to maintain and improve our relationship with our local stakeholders and first nation group who are supporting us and that aspect I think for me is crucial.

Speaker 5: And also to to continue to be in compliance with the lo performance and to maintain and improve our relationship with our local stake, holders. And first mission group were supporting us. Both assets I think for me is crucial at the beginning. My main mainly invest my time to stabilize, to to be sustainable version point of view and to deliver guidance and think can re excited to work with the te will. Thank you so much back and, as I said, we'll be hearing from PAT in March second quarter review. I will now turn it back to the operator for the Q and a portion of the call: michelle.

Multiple speakers: [Patrick Godin] At the beginning, I will mainly invest my time to stabilize and to [inaudible] point of view and to deliver guidance and I think that we're excited to work with the team. [Renaud Adams] Thank you so much Pat and, as I said, we'll be hearing from Pat in our second quarter review. I will now turn it back to the operator for the Q&A portion of the call. Michelle?

Operator: Thank you, sir. Ladies and gentlemen, we will now begin the question-and-answer session. If you would like to ask the question, please press star one. If you would like to withdraw your question, please press star two. One moment for your first question.

Speaker 6: Thank you, sir. Ladies and gentlemen, we will now begin the question-and-answer session. If you would like to ask the question, please press Star one if you would like to withdraw your question, please press Star two.

Speaker 11: one moment for your first question.

Operator: Your first question comes from Mike Parkin of National Bank. Please go ahead.

Speaker 6: one moment for your first questionyour first question comes from Mike Parkin of national Bank. Please go ahead.

Michael Parkin: Hi guys, thanks for taking my question. Just to speak on labor availability at the assets during shutdowns, are you noticing any kind of challenges staffing contractors or shutdowns? Are you pulling from further and further away cost pressures, that kind of thing?

Speaker 7: okguys, thanks. So taking my questions to speak on labor availability at the assets dering shutdowns, are you noticing any kind of challenges staffing contractors or shutdowns? Are you pulling from further and further away cost pressures? I kind of think?

Renaud Adams: Thanks, Mike for your comment and question. So, as I mentioned, on the operational side, of course, it was a tough start. We did not have a really big maintenance shutdown plan during that period, so that's good. We usually plan our shutdown way ahead of schedule so that gives a lot of flexibility to contractors to adjust and adapt and so I wouldn't say on the shutdown, it has been on a real impact, but when it comes to our own planned shutdowns if you have some issues and so forth, of course, you operate and any COVID situation may impact or slow down a little bit, the reactiveness of that. But all in all, I believe that it hasn't really impacted on the maintenance and shutdown side, but more like on the regular operations, mostly around the mine at the start, the start of the [inaudible]. Things have improved significantly, as we have been in the quarter.

Speaker 2: Things my for your your your, your comment in question. So, as I mentioned, you know, on the operational side, of course it was. It was a tough start. We did not have really maintenance shutdown plan during that period. So that's good. We usually plan shutdown way ahead of schedule So that's give a lot of flexibility or contractors to adjust and adopt and and so I would say you know on the shutdown, you know it has been on on on the realil impact. But But when it comes to on plan shutdowns if you have some issues and so forth, of course you operate. You know when any covided situation may impact me slower down a little bit, reactiveness of that. But but all in all I believe that it hasn't really impacted. You know, on the maintenance and shutdown side but but more like on the regular operations, mostly around the, the mine at the start to the start of the worldthings, as improved significant, as we have been said, the in the quarter.

Speaker 4: Things as been improved significantly, as we been since the and the quarter.

Michael Parkin: Okay, great. And then slide fourteen just notes that you're looking to receive [inaudible] permit in the second half of 2022, is there any wiggle room on that like that drifted out into early 2023? Are there any issues with receiving that a little later for whatever reason it got delayed through maybe the government is kind of backed up with various COVID-19 delays?

Speaker 16: Just notes that you're looking to receive to Fe go permit in the second half of 2020 -two.

Speaker 8: ok great. And then Slide 14 just notes that you're looking to receive the seasonal permit in the second half of 2022. is there any legal room on that? Like that drifted out into early 2020? Is there any issues with receiving that a little later? It's for whatever reason they got delayed through. Maybe the government just kind of back. That was various COVID-19 delaysthe, and I appreciate that because, as everyone knows, you know, we were, we were impacted with the B three we had some delays- govid was but But I some time to. For the B 3, you know needed to address a ptailings ininteddid to address, you know, stabilizations in the watering of tailings, all of which you know were included in a technical discussions. There were some longer, of course, conversations and consultations with the.

Speaker 17: Is there any wiggal room on that? Like that drifted out into early 2023. is there any issues?

Speaker 18: With receiving that a little later. It's for whatever reason it got delayed through.

Speaker 19: Maybe the government is kind of backed. That was various COVID-19 delays.

Renaud Adams: And I appreciate that because, as everyone knows, we were impacted with the B3, we had some delays, COVID was, but at the same time too the B3 needed to address the tailings needed to address stabilizations in the watering of tailings follow, which you know included in a technical discussion. They were some longer, of course, conversations and consultations with our partner first nations at the very challenging times for them, for the provinces, and all that. So everything basically happened during the B3. When it comes to season, I like to say that there is nothing really new about the season. It's a little bit of more of everything we have already permitted and the process is advancing extremely well. Our first round of questions, on time, answering it, and comes the second round and, quite frankly, we're not expecting. We've completed our conversations internally as well, and support as well from our partners and communities is in place. So now we feel very strongly that the process is following its due course and that we could put this to bed not too late in the second half of the year.

Speaker 2: With our partner first Nations at the very challenging times for them, for for the prominince is so that. So everything is that basically here know happened here, cwering the B threewhen it comes to season. I like to say that there is nothing really new about the season, is a little bit of the more of everything we have already permitted and the process is advening extremely well. Our first round of questions on time and wering. It then comes the second round and, quite frankly, we're not expecting. We have we've completed our conversations internally as well, and the support as well partners and communities are is in place. So now we we feel very strong that the process is following, is due course and that we could put. We could put this to bed not to late in the second half of the.

Michael Parkin: Okay, that's it for me guys. Thanks very much.

Renaud Adams: Thanks.

Operator: Your next question comes from Lucas Pamatat of Canaccord. Please go ahead.

Speaker 7: Okay before that's it for me. Thanks so much. ingyour next question comes from Lucas, a commeat of canacort. Let's go ahead. Good morning and thanks are taking my questions. So just thinking about costs, that bringy River, obviously the cost, this squter, were above your guidance and I believe you had also guid to lower costs in the first half of this year. So how should we think about those going forward the rest of the year?

Lucas Pamatat: Hi, good morning, and thanks for taking my questions. So just thinking about costs at Rainy River, obviously the cost this quarter were above your guidance and I believe you had also guided to lower costs in the first half of this year. So how should we think about those going forward for the rest of the year?

Speaker 22: So how should we think about those going forward for rest of the year?

Renaud Adams: We did not really guided by a half so we did mention at the time of the guidance is the first half, just like last year at the Rainy River. So the first quarter is a higher strip ratio, more waste, slightly the lower grade, and the second half, which represents about 55% of the production will be at the last strip ratio so less cost to achieve higher production. So yes, there was some inflation and pressure, and all that, but all in all we're following our strategic approach of more waste [inaudible] more push back. So no, we did not [inaudible] so strategically, we executed as planned.

Speaker 2: We did not. We did not really guide, guided know by half. So we've mentioned at the time of the guidance is the first half, just like last year at the ainy River. So the first quarter is a higher strip ratio, more waste, slightly lower grade, and the second half, which represent about 55% of the production is will be at the last tririp ratios: a less cost to achieve higher oction. So yes, was some inflation pressurered and all that. But all in all you know, we're following our strategic approach of more waste than more brush back.

Speaker 4: So no, we did not requ effort, So strategically we execed last plan.

Speaker 2: So no, we did not requ Fort So strategically we ways that cuted last night ok, thanks. And then just a whole. So you mentioned in the prepared remarks that be three on is on track. Forty Q4 this year, given idea how many ton we can expect from better this year. So if, if you look at the B three technical approach, So once you have completed all your development and all your drawpoint and vall, you know, are done and that the caving takes place and it's nextx capacity, we're talking about anywhere between the eight and 2, potentially up to 5000 tons a day. And so there is about flight. Roughly we're about like 40% right now and as we, as we advance, you know, we hope to the beauty of the, the beauty of the, the objective and the.

Lucas Pamatat: Okay, thanks. And then just a follow-up, so you mentioned in your prepared remarks that the B3 zone is on track for Q4 this year. Give an idea of how many tons we can expect come later this year.

Renaud Adams: So if you look at the B3 technical approach, so once you have completed all your development and all your draw points and [inaudible] you know are done and that the caving takes place and its max capacity, we're talking about anywhere between the eight and two or potentially up to some 5000-10,000 tons a day and so there is about like roughly, we're about like 40% right now and as we advance, the beauty of the objective and the beauty of accelerating- and I'm sure Pat will be a lot on this with the team at New Aston to accelerate and complete the development ahead of schedule will allow the gravity to take place and the ramp-up to the full capacity taking [inaudible] earlier and hopefully achieve it before the end of the year rather than early next year. So that's really what is at stake here, and accelerations and completions of the development ahead of schedule will have a big impact and would allow more caving to take place this year.

Speaker 4: Roughly. We're about like 40% right now and as we, as we advance, you know, we hope to the beauty of the, the beauty of the, the objective and the of accelerating- and I'm sure path will be a lot on this, with the team at and you often- to accelerate, complete the development ahead of schedule would allow the, the gravity, to take place, you know, and the ramp up to the full capacity taking, take earlier and hopefully achieve it 40 and of the year rather than early next year. So that's really what is at stake here. An accelerations and and completions of the development ahead of schedule will have a big impact and would would allow more caving to take place this year.

Speaker 2: Of accelerating- and I'm sure path will be a lot on this- with the team at the you often to accelerate and complete the development ahead of schedule, allow the, the gravity to take place, you know, and the ramp up to the full capacity taking, take earlier and hopefully achieve it beforetythe end of big year raider and early next year. So that's really what is's at stake here. An accelerations and and completions of the development ahead of schedule will have a big impact and would would allow more caving to take place this year.

Speaker 14: Is external different.

Multiple speakers: [Lucas Pamatat] Okay, thanks, Renaud. That's it from me. [Renaud Adams] Thank you.

Operator: Your next question comes from Anita Soni of CIBC World Markets. Please go ahead.

Speaker 9: Where onallventhank youyour next question comes from Anita sony of CIBC world markets. Please go ahead.

Anita Soni: Sorry, I had myself on mute. Good morning guys, thanks for taking my questions. The first question that I have is with respect to the unit mining cost per ton at both New Aston and Rainy River. So at New Aston from quarter-over-quarter it's jumped pretty significantly. It goes around 11 to 26. Could you provide some clarity on why it was so high this quarter on the [inaudible]?

Speaker 10: S had myself on you. Good morning guys. Thanks for taking my question. The first question that I have is with respect to the unit mining cost per ton at both new afnoon and Rainy River. So a new afno, the. From quarter of a quarter it jumped pretty significantly. A goes around 11 to 26. is there something that is? Could you provide some clarity on why it was was so high this quarter on the lineine Class?

Renaud Adams: It's really the type of mining Anita. So the fact that we've shut down the lift line activities so that what I would call that free caving draw point picking is out now. The recovery level is all remote and as a result of the accident last year has increased safety and SOP operating protocols in our practices and so forth, and the B3 tons that come basically just from the early stage in the B3 so it's a transitions zone. There is no doubt in my mind as we progress and ramp up, and put B3 development behind us and we're basically benefiting as well as the B3 [inaudible] the cost will come back. But it's a transition, it's all related to the transition, the same with the sustaining capital, you're spending sustaining capital at B3, but you're still not benefiting the tons and the ounces coming from. So transition, it's difficult, but it's temporary, and eventually we'll establish ourselves and that cost will return to a proper structure.

Speaker 2: The it's really the type of mining I need. So you know the fact that we've, you know we've shut down the, the Lift one activities. You also that free, what I would call that free caving drawpoint picking. You know is, is is out. Now the recovery level is all remote And as a result of the of the accident last year you know, has increased safety and and ssob operating protocols. You know practices and so forth, and and the B three the B three times comes basically just you know from from the early stage in the B 3, So it's transitions zon. There is no doubt of my mind, you know, has progress and ramp up and what.

Speaker 4: B B three development behind us and we basically benefiting as well as the B and if preving, the cost will come back. But it's a transition, it's all related to the transition, the same with the sustaining capital. You're spending sustaining capital, that B 3, but' still not benefiting the tons and the ounces coming from. So So transition, it's difficult it's, but it's temporary and and eventually will establish ourself and that cost return to proper structure.

Speaker 2: The B three development behind us and we basically benefiting as well as the B and if pre caving at the cost will come back. But but it's a transition, it's all related to the transition. The same with the sustaining capital: you're spending sustaining capital at B three but it's still not benefiting the tons and the ounces coming from. So So transition it's difficult it's, but it's temporary and and eventually will establish ourselves and our Coast will return to proper structure.

Anita Soni: Okay, and then so remind me again when is the B3 zone complete?

Multiple speakers: [Renaud Adams] We have normally, if we would follow- let's call it the four [inaudible] months, we will be completing this in the fourth quarter and the opportunity here is to really increase this set even more, looking up here. [Anita Soni] And then on Rainy River, a similar question, except in this case costs were similar, I guess mining costs per ton were a little bit higher, but the process costs were similar versus last year. But I guess my question is relative to the technical report you guys were looking at, I think unit process costs at $7 per ton for this year, and I'm just trying to understand the discrepancy between the mid-nine versus the mid-seven that you were expecting in the process, given the technical report was just released a few weeks ago.

Speaker 11: Okay and then So remind me again when the bthree is on completewe have normally, if we would follow, you know, the- let's call it the four bel, now months. We will be completing this in the fourth quarter and the opportunity here is to really increase this ASA even more. Looking at here and then on Rainy River.

Speaker 4: Even more, looking up here and then on Rainy River.

Speaker 24: Similar question, except in this case costs were similar. I guess mining costs perton, were a little bit higher, but the process costs were similar versus last year. But I guess my question is relative to the technical report you guys were looking at, I think you process costs and $7 per ton for this year, and I'm just trying to understand the discrepancy between the nine mid-n versus the 7, the mid seven that you were expecting in the process, given the technical report was just released. Few you.

Speaker 11: Similar question, except in this case costs were similar. I guess mining costs per ton were a little bit higher but the process costs were similar versus last year. But I guess my question is relative to the technical report you guys were looking at, I think you process costs and $7 per ton for this year, and I'm just trying to understand the discrepancy between the nine mid mid- N versus the 7, the mid- seven that you were expecting in the process, given the technical report was just released a few go.

Renaud Adams: Yeah, in the first quarter, it's all about maintenance and yes, there was some extra inflations and consumable and electricity went up as well in this quarter. But globally speaking, when you have 27,000 tons a day and you operate at 24, so the difference in between is usually related that when you stop you're spending money, so I know we have absolutely the capacity to bring this cost back today to the mark, but it's instability and we need to bring the mill down back to the 27 at the planned maintenance and costs and the planned operational efficiency costs, as we highlight in 43101. But those costs per ton that you referred to that were included in the first quarter were achieved back in 2021. So it's not something that we haven't achieved. We have achieved those, but Q1 was somewhat unstable, but those costs are absolutely achievable.

Speaker 2: Yeah it's, and it's all about the in the first quarter. It's all about the, you know, maintenance and yes, there were some some extra, some extra inflations and and consum all and electricity went up as well this quarter. But but globally speaking, is when you, when you have 27 thousand tons of day and you operate that 24, So the difference in between is usually related that when you stouck you're spending money and and so I know we have absolutely the capacity to bring this cost back back to the day, to the Mark. But it's, it's it's instability, it's, you know, the when need to to bring the the mill down back to the 27, the plan maintenance and costs and the plan operational efficiency costs, as highlighted, and know 43, one and one But those, those costs per that two that were included in the first quarter were was were achieved.

Speaker 4: Back in back in 2021. So it's not. It's not something that we haven't achieved. We have achieved those, but Q1 was somewhat unstable, but those costs are absolutely achievupon.

Speaker 2: That can back in 2021. So it's not. It's not something that we haven't achieved. We have achieved those, but Q1 was somewhat unstable, but those costs are absolutely achievable.

Anita Soni: Okay, that's it for my questions. Thank you.

Renaud Adams: Thank you, Anita.

Operator: Ladies and gentlemen, there are no further questions. I will turn the conference back to Ankit Shaw for closing remarks. Please go ahead, sir.

Speaker 11: Okay for my question. Thank youthank you, Ladies and gentlemen. There are no further questions. I will turn the conference back to onkitshop for closing remarks. Please go ahead, sir.

Ankit Shaw: Thank you, Michelle, and thanks again to everybody who joined us today. As always, if you have any additional questions, please do not hesitate to reach out to us via phone or e-mail. Thank you and have a great day.

Speaker 1: Thank you michelle, and thanks again to everybody who joined us today, as always. So you have any additional questions, please do not hesitate to reach out to us with honor email. Thank you can have a great dayladies and gentlemen, this concludes your conference call for this morning. We would like to thank you for participating and ask you to please disconnect your lines.

Operator: Ladies and gentlemen, this concludes your conference call for this morning. We would like to thank you for participating and ask you to please disconnect your lines.

Speaker 14: Pro.

Speaker 1: Thank you for calling fision, which call you joining. Hi, it's N cold, your first and last name.

Speaker 2: three company year year analy. Year one moment the con now being recoured. Morning mining M and I will beyear conference operat day. While to new gold, first quarter 2022 earning conference call all line. Have polase. Prevent any back and please be Vice that conference call. webc is be courcorded. After this AK marks there will be a question and answer session and if like to a question this time sixly ress Star number one on year tele. You would like two with year questionion. Please press startar than the number two would now like conference over on the strategy and bus development Please. Thank you M hel the morning every one We preciate year joining today for new first quarter 20 20, two earnings conference call we cast on the line today. We Adams, presentident C and RO's are C F, o should wish the 4, one with the web cast three sign our home age new gold com four the teen begin the presentation. I like to direct attent to our cautionionary line age related to four looking statements found on lides 2, three of the presentation today commentary includes looking statements related to new go and this respect we refer you two our deta coutionionary re.arding four looking statements in the presentation, the were caution of the actual results. uture events could Mary from those exexpress or 5, four looking statements. lides two and three provide additional information and should be reviewed. We also for two section factors in new related and D, a and other fiveilings of ailable on C which sent 30 material factors that could CAS actual relts to ver. In addition, at the concludion of the presentation, number no, the vide important information and should be reviewed conjunction with the material presented. Now turn the call over to no. Thank good morning every one So the four past to discuss our quarter financial resul. oneed to take M to discuss some of the changes we made. Our companyy and the challenes experiparions. Like many years during the quarter past two years, our teenams o quickly to make changes in light of co very and the he the focus operation. Like many years, re also experi, ions high casees, 30 year in the year whichish backed producttiv levels start two thousand 20 2, five this our teenams were re? ilillion and with deliber quarter inflation challen many of us in dis three and were no ception, fell the same pres res years manyly on the consu but also R city, R River but been eight able high pric the benefit of having two Canadian and the per? I ing of caneight and doll we two the ancial o ation and the co actction in it I and in that to eight yigeight pressures remain commated to delibervery on guance during the quarter we also continteen FS on a AR on our long terms prior ities, reain River and development V and we look four itiing mining lated year. Also very pleas with the odated rain River technical report we compleated in March which has extanded our mine line to two thousand thirtwenty one will dis dis later in the presentation but is a six in the complish for the teen and a posit my for our business. New after the be three Ram con we made progress on the C on the development and we compleated to commission four tech ing in end ilings facities. Very pleas to well govern tr new the has C? O new brings exts technic call operation and capital exec experi? ans in the mining se and surere. Addition to our teen will be in deliver and as we con two's project company and ancial orts and reated 4, four to year from and our Q2 review and mar to car, we 4, four looking four building on our first quarter and con deliver Val for with that will passast to year morning slid five provides are operating highlights for Q1. Production details are consistent our eightr production press release. During Q1 the company proproduced 8, seven thousand six hundred go ounces, the conisted eight point two million pounds of copper and the prox fifty eight thousand eight hundred gold oun from ry River nine thousand two hundred sixty seven ounces gold ounces from new after for total of sixty eight thousand one hundred gold ounces. Lower qu gold production comppared two the prior year primily ue low grade tons process new after operating exexpen hours was in line with prior year quarter. So all sting cos for the quarter were sevenventeen seventy eight co's ER. In the prior year arter primarily due to higher staining capital spend and lower sales Vol new after partally off set with higher sales voluion. Rainy River mention: during one we experi inflation ary challenges, been experi the across ust 3, particularly with reregard prices with the benefit of canad, we Canadian dollars optim ization and cost production and ut we are off stating a good courtion of the inflation ary pressures going. four Ward contin work on Min izing any Turning to slid six first quarter revenue was a hundred sevenventy five million, uring by sales of proxim sevenventy thousand five hundred gold oun realized gold price of 18 nineiny seven per arounds and sales of nine point two million pounds of COP four fifty £3. one revenue was 6% higher in the prior year quarter, primarily due a higher medtal prices, part off set by ER oper sales Vol operating cash four working capital justments was sixty six point four million or 10 cents per share for the quarter in line with the prior year quarter. The company requarter law of seven point eight million or one cent per 2, one compared to ning of two cents per share. Q1: 20, 20 after just first. Certain charg nings were 10 point three million or two cent per sure. Q1 compared earnings of one cent per re in the quarter of of 20, one our Q1 justed earnings included justments related to our gams and laws related to UN realized justments on the Rainy River: three mar Mark and the three cast law Roy new after more details on these meas: res capital exexpend, ers total capital and Le for the arter sevent eight point four million. fifty five point five million was spent on staining capital and 20, two point nine million on go capital sustaining cap sustain spend was primarily related. The plan ilings both operating hour capital dpping Rainy River and we be 3, nine development. New after capital was focus on project developments, specificically the C new and the under ground per on Rainy River slid seven provides details of our capital structure during the quarter. We noun that we will be redeeming the remaining hundred million of our 20 20 5, iors no and mid may cash on marks 30. first 20, two was four hundred thirtyy two million dollars. The de creation cast from the year and primarily in PA and cash lements on non curren River of financial abities with turn the call back two thanks not make some edaddation marks on ouroperation of the four Mon. The first arter on like the re River, M had a light quarter and terms of total ton manyly co casees. Start of the quarter re the quarter progresswe have per prox five 2, one and this was in line our pro two years when mons a main capital Li WA which focusused on face four mining, the lower town M did not have mining four P on grade the total produions of nearly six thousand go. The ver was from the same peri, two thousand 20 1, two thousand twent. The milling R was backed by addition two thousand 20, one the milling eight was acted by addition of town time related to cashing and being six IR in first condvations acting also the cross movement W was back the quarter progress all the teen was very resuil and ninevigated around first condvations to qu the this five the inflation or pressures the teen deliver lower operating exexpens con to the same peri fect two thousand 20, one and three cash.