Q3 2023 New Gold Inc Earnings Call
Good morning, My name is Jenny and I will be your conference operator today.
Welcome to the new Gold's third quarter 2023 earnings conference call.
All lines have been placed on mute to prevent any background noise.
The advice that todays conference call and webcast is being recorded.
The Speakers' remarks, there will be a question and answer session. If you would like to ask a question during this time.
Simply press Star then the number one on your telephone keypad.
I would like to withdraw your question. Please press Star then the number two.
I would now like to turn the conference over to <unk> Shaw Executive Vice President of strategy and business development. Thank you.
Thank you Jenny and good morning, everyone. We appreciate you joining us today for new Gold's third quarter 2023 earnings conference call and webcast on the line today, we have Patrick <unk>, President and CEO, Andrew Sharp CFO and Keith Murphy, our VP of finance should you wish to follow along with the webcast.
These financing from our homepage at <unk> Dot com.
Before the team begins the presentation I would like to direct your attention to our cautionary language related to forward looking statements found on slides two and three of the presentation.
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 actual results and future events could differ from those expressed or implied in forward looking statements slides two and three provide additional information and should be reviewed we also refer you to the section entitled risk factors in new Gold's latest Aif MD&A and other filings on SEDAR, which set out certain material factors that could cause actual results to <unk>.
Yeah.
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 will now turn the call over to Pat for some opening remarks.
Thank you.
Good morning, everyone.
I want to welcome you, one Vishal executive Vice President and Chief operating Officer Nicole.
Juan will cover the operational portion of these calls going forward.
<unk> joined the company six month ago.
Luke Buchanan VP technical services.
We'll have a strong improvement of personal background, which is strengthening our management team.
Before turning the call over.
The fees and you wanted to discuss the quarter want to give a few brief remarks.
We had an order a seven quarter euro deal gold.
Reports this years are paying off.
Due to the strong operational performance over the first nine months of the year.
This really is striking to the top end.
Guidance.
Our all in sustaining costs are tracking to the low end of the guidance range.
These strong results, our new gold generated $22 million of positive free cash flow.
This is the first time, we have generated positive free cash flow as a company since Q4 2021.
We did this despite continuing to invest in our growth projects and securing future production.
I expect this positive free cash flow trend to continue and increase in the coming years.
We don't believe our growth projects.
Our health and safety performance continued to meet expectation with a year to day trip for a 1.01 through the first nine months of the year.
In fact.
Earlier this month.
Any reverse celebrate this significant milestone of one year, we followed the lost time injury.
I'm, particularly pleased with our ability to meet our objective without compromising safety.
Which is a testament to our courage to care Ginger.
The strong operating results at rainy River over the last four quarter speaks strongly to this.
Looking to our future we continued to make progress had been seen our growth in ceilings.
We continue to advance underground development at rainy River.
The ramp access domain zone made good progress with first ore scheduled for Q4 2024.
And as highlighted in our recent press release.
And accomplish some significant milestones.
I want to emphasize is the completion of the first dwell a little seasonal.
And the final commissioning of all 29, dewatering wells at new Afton tailings storage facility.
These are key for seasonal production.
We are well on our way to reaching commercial production in the second half of next year.
Jenny: Good morning, my name is Jenny, and I will be your conference operator today. Welcome to the New Gold's third quarter 2023 earnings conference call. All lines have been placed on mute to prevent any background noise. Easy advice that today's conference call and webcast is being recorded. After the speakers remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone t-pad. If you would like to withdraw your question, please press star then the number two.
We also provide an update on <unk> opportunities to extend the mine life at new Afton beyond 2030, which I'm very excited about.
This is a pivotal moment for the new Afton mine with production growth and declining costs expected in the near term.
And all major capital expenditures for tailings deposition is completed.
Both operations will continue to deliver on expectation with a strong focus.
On cost control and operational discipline.
With that I will turn the call over to Keith.
Ankit Shah: I would not like trying to conference over to Ankit Shah, Executive Vice President of Strategy and Business Development. Thank you.
Do you think.
I'm on slide seven which is our operating highlights.
Q3 was another strong quarter.
Produced over 111000 gold equivalent ounces, which is 22% higher when compared to the prior year quarter.
Ankit Shah: Thank you Jenny and good morning everyone. We appreciate you joining us today for New Gold's third quarter 2023 earnings conference call and webcast. On the line today we have Patrick Gooden, President and CEO, Johan Bouchard, COO, and Keith Murphy are VP of Finance. Should you wish to follow along with the webcast, please sign in from our homepage at NewGold.com. Before the team begins the presentation, I'd like to direct your attention to our cautionary language related to four looking statements found on slides two and three of the presentation.
Rainy River produced approximately 65000 gold ounces.
The increase over the prior year quarter is primarily due to higher gold grades and higher throughput.
<unk> produced approximately 18000 gold ounces and over 13 million pounds of copper with the increase over the prior year quarter due to higher grades and increased recovery.
Ankit Shah: Today's commentary includes four looking statements relating to New Gold. In this respect, we refer you to our detailed cautionary no-regarding four looking statements in the presentation. Your caution that actual results in future events could differ from those expressed or implied in four looking statements. Slides two and three provide additional information and should be reviewed. We also refer you to the section entitled Risk Factors in New Gold's latest AIF, MDNA, and other filings on Cedar, which set out certain material factors that could cause actual results to differ.
Gold production at New Afton also include 761 ounces from the <unk> purchase agreements.
Operating expenses per gold equivalent ounce decreased over the prior year periods, primarily due to higher production and sales.
Consolidated all in sustaining cost for the quarter were $1477 per equivalent ounce.
The decrease compared to the prior year quarter is due to the lower operating costs lower sustaining capital spend and higher sales volume at both sites.
Turning to our financial results on slide eight.
Third quarter revenue was $201 million driven by sales of approximately 107500 gold ounces at an average realized gold price of $1924 brands and sales of 13 million pounds of copper at $3 78 for Pat.
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.
Patrick Gooden: I'll now turn the call over to Pat for some opening remarks. Thank you.
Patrick Gooden: Good morning, everyone. I want to welcome Yuan Bouchard, executive vice president and chief operating officer to the call. Yuan will cover the operational portion of these calls going forward. Yuan joined the company six months ago with Luke Buchanan, DP Technical Services. Both have a strong proven operational background, which is strengthening our management team.
Q3 revenue was higher than the prior year quarter, primarily due to higher metal prices and sales volumes.
Cash generated from operations before working capital adjustments was 88 million or <unk> 13 per share for the quarter.
This was higher than the prior year period due to higher revenue.
Patrick Gooden: Before turning the call over to Pete and to discuss the quarter, I want to give a few brief remarks. We add another excellent quarter year at New Gold. Our airports this year are paying off and due to the strong operational performance over the first nine months of the year, production is tracking to the top end of the guidance. And our audience of the Incas are tracking to the low end of the guidance range.
As Pat mentioned, the company generated $22 million of positive free cash flow in the quarter.
Rainy River continue to deliver free cash flow and has generated $85 million in free cash flow over the last two years.
New Afton had its first positive free cash flow quarter in almost two years, despite the ongoing investment in seasonal.
This is a testament to the strong operating performance in the quarter.
The company recorded a net loss of approximately $3 million or zero cents per share during Q3.
Patrick Gooden: These strong results are New Gold generated $22 million of positive free cash rule. This is the first time we have generated positive free cash rule as a company since U4 2021. We did this despite continuing to invest in our growth projects and securing future production. I expect this positive freak-ass little trend to continue an increase in the coming years as we complete our growth projects. Our health and city performance continue to meet expectation with a year-to-date transfer of 1.01 to the first-mile month of the year.
This is an improvement compared to the prior year quarter, primarily due to higher revenues and lower finance costs, partially offset by higher operating costs and higher unrealized losses on the revaluation of the rainy River Gulfstream obligation.
The new Afton free cash flow interest obligation.
After adjusting for certain charges net earnings were $23 million or <unk> <unk> per share in Q3, an.
An improvement compared to an adjusted net loss of $13 million in the third quarter of 2022.
The improvement in adjusted net earnings was primarily due to higher revenues and lower finance costs, partially offset by higher operating expenses and depreciation depletion due to the higher production.
Patrick Gooden: In fact, earlier this month, Rene Rivers celebrate the significant milestone of one year we part the last-time injury. I am partially pleased with our ability to meet our objectives, we fought compromising safety, which is a testament to our courage to care-culture. The strong operating results at Rene Rivers over the last four quarter speaks strongly to this.
Our Q3 adjusted earnings include adjustments related to other gains and losses.
Our total capital expenditure for the quarter was $70 million with 36 million spent on sustaining capital and $35 million on growth capital.
At rainy River sustaining capital spend was primarily related to the tailings dam raise capitalized waste and capital maintenance.
Looking to our future, we continue to make progress advancing and we grow and see it. We continue to advance on the ground development at Rene Rivers. The ramp access to Min Zone made good progress with first-door schedule for Q4 2024. And as highlighted in our recent press release, you have been accomplished some significant milestone. I want to re-emphasize the completion of the first-door bill at C-Zone and the final commissioning of all of 29 be-watering wells at the New Athletic Installers facility.
Growth capital related to the development of the Intrepid underground and underground main zones.
At new Afton sustaining capital spend primarily related to tailings management and stabilization activities growth capital primarily related to C zone development.
Slide nine provides details of our capital structure.
We had cash on hand at the end of Q3 of $179 million, an increase of $5 million from the previous quarter driven by free cash flow generated at both rainy River and new Afton.
These are key for C-Zone production and we are well on our way to reaching commercial production in the second half of next year. We also provide an update on compromising opportunities to extend the my life at New Athletic beyond 2030, which I am very excited about. This is a pivotal moment for the New Athletic Mind with professional growth and declining costs expected in the near-term, in all major capital expenditures for trading statements completed. At both operations, we will continue to deliver an expectation with a strong focus on cost control and operation discipline.
At the end of Q3, the company's liquidity position was $553 million.
We continue to execute short term hedges on cat and fuel and are hedged at around 75% on both for the fourth quarter.
To evaluate short term hedge options on CASM fuel and utilize it as we see fit.
To sum up we are in an.
We remain in a healthy financial position with an increased cash balance following another excellent quarter.
While continuing to invest in our growth projects.
Now I'll turn the call over to Johan to walk through our operating highlights.
Alright, well thank you Keith.
So Kevin in saying about rainy river the operation continued to perform well achieving another quarter in line with plan and delivering 10% increase in production over to third quarter last year.
Keith Murphy: With that, I will turn the call forward to Keith. Thank you, Pa. I'm on slide 7, which has our operating highlights. Q3 was another strong quarter. We produced over 111,000 gold equivalent ounces, which is 22% higher when compared to the prior year quarter. Rainy River produced approximately 65,000 gold ounces. The increase over the prior year quarter is primarily due to higher gold grades and higher throughput. New Austin produced approximately 18,000 gold ounces and over 13 million pounds of copper, with the increase over the prior year quarter due to higher grades and increased recovery.
Through operational discipline. The operation is there to bring on expectations and achieving a stable and reliable production quarter over quarter.
<unk> is well positioned to continue this trend into 2024.
<unk> R is planned from the lower benches of phase three and the <unk> underground mine and the processing plant is running well.
Achieving a throughput of more than 28000 ton per day in September.
The operation is on track to achieve the top end of the <unk> guidance and all in with an all in sustaining costs tracking to the midpoint.
Keith Murphy: Gold production at New Austin also includes 761 ounces from the ore purchase agreements. Operating expenses per gold equivalent ounce decreased over the prior year periods, primarily due to higher production and sales. Consolidated all in sustaining costs for the quarter were $1,477 per equivalent ounce. The decrease compared to the prior year quarter is due to the lower operating costs, lower sustaining capital spend and higher sales volume at both sides.
Open.
<unk> costs are expected to reduce significantly after 2024 with the completion of the waste stripping wireless feed grade are planned to increase as underground production ramp up to supplement I Greenville feet from the pit.
Thanks.
With more stable quarterly results. We are now looking forward to the next three years in which we see a growth growing production profile.
Profile with declining costs driving increasing cash flows.
Now on slide 12.
Keith Murphy: Turning to our financial results on slide A's. Third quarter revenue was $201 million. Driven by sales of approximately 107,500 gold ounces at an average realized gold price of $1,924 per ounce, and sales of 13 million pounds of copper at $3.78 for bet. Q3 revenue was higher than the prior year quarter, primarily due to higher metal prices and sales volumes. Cash generators from operations before working capital adjustments was $88 million, or $13 cents per share for the quarter.
So the underground production is planned to increase from the second half of 2024 with the expansion into the underground mine zone.
Connection round from Intrepid to underground mine is advancing well and we expect to be in a politician to start raise boring the fresh air raise in Q1 next year.
Parallel the Intrepid zone continue to produce between 800000 ton per day with grades reconciling positively with the block model.
Now turning now to the two new Afton the accretion as an excellent third quarter, achieving the highest quarterly production since 2021, mostly as a result of <unk> continuing to exceed planned extraction rates.
Keith Murphy: This was higher than the prior year period due to higher revenue. As Pat mentioned, the company generated $22 million of positive free cash flow in the quarter. Rainy River continued to deliver free cash flow and has generated $85 million in free cash flow over the last two years. New Austin had its first positive free cash flow quarter in almost two years, despite the ongoing investment in CISON. This is a testament to the strong operating performance in the quarter.
The exceptional performance over the first nine months put new Aston and an excellent apologize sent what's at the top end of the 2023 production guidance and the bottom end of the cost guidance, we expect.
The increasing production profile to continue over the coming years as a C zone ramp up production.
Keith Murphy: The company recorded a net loss of approximately $3 million or $0 cents per share during Q3. This is an improvement compared to the prior year quarter, primarily due to higher revenues and lower finance costs. Partially offset by higher operating costs and higher on realized losses on the revaluation of the Rainy River goals through obligation, and the new Austin free cash flow interest obligation. After adjusting for certain of the charges, net earnings were $23 million or $3 cents per share in Q3, and improvement compared to an adjusted net loss of $13 million in the third quarter of 2022.
We made excellent progress this quarter, achieving two significant milestones.
First we completed the first draw Bell App sees on on time. This is significant because it marks the start of the seasonal production ramp up period, we think the project on track for commercial production in the second half of the year.
These are milestone in Q3 was commissioning of the final the watering well at new Afton tailings storage facility as such most of the activities and costs related to the theater exhibition project are now completed.
Keith Murphy: The improvement in adjusted net earnings was primarily due to higher revenues and lower finance costs. Partially offset by higher operating expenses and depreciation and depletion due to the higher production. Our Q3 adjusted earnings include adjustments related to other gains and losses. Our total capital expenditure for the quarter was $70 million, with $36 million spent on sustaining capital and $35 million on growth capital. At Rainy River, sustaining capital spend was primarily related to the tailings downrays, capitalized waste, and capital maintenance. Growth capital related to the development of the intrepid underground and underground main zones. At New Austin, sustaining capital spend primarily related to tailings management and stabilization activities, while growth capital primarily related to seasonal development.
Wrapping up on slide 15, this figure highlight a strong outlook at new Afton.
And there are four key points that I would like to talk about here.
The first a seasonal ramp up gold equivalent production is expected to average 230000 ounces per year from 2024 to <unk>, 30% to 60% increase over the mid point of 2023 guidance.
Lead considering the fixed cost component of 50% with mining, 75% with the processing at 90% with G&A. The unit cost per tonne basis is expected to decrease with the return of ire throughput rates.
Almost all Capex is upfront for a block cave.
<unk> block cave mine and as such there is a minimal capital expenditure after completion of the <unk> project in 2025.
Keith Murphy: Slide 9 provides details of our capital structure. We had cash on hand at the end of Q3 of $179 million, and increase of $5 million from the previous quarter driven by free cash flow generated at both Rainy River and New Austin. At the end of Q3, the company's liquidity position was $553 million.
And finally beyond 2030, there is significant upside that could extend the life of mine for many more years, which is supported by very encouraging exploration results.
With that though with turning the call back to Patrick. Thank you so turning to our 'twenty three 2023 guidance.
Keith Murphy: We continued to execute short-term hedges on cattle and fuel, and our hedge that around 75% on hope for the fourth quarter. We continued to evaluate short-term hedge options on cattle and fuel, and utilize it as we see today.
Following the strong results year to date whenever is tracking towards the top end of the gold equivalent production range.
And all in sustaining costs are tracking to the midpoint of the guidance that guidance range.
Keith Murphy: To sum up, we remain in a healthy financial position with an increased cash balance following another excellent quarter. All while continuing to invest in our growth project.
At new Afton, and I'm pleased to say that copper gold and gold equivalent pro those are all tracking toward the top end of their respective production guidance ranges with all in sustaining costs tracking toward the low end of their respective cost guiding range.
Thanks.
Yohann Bouchard: Now, I'll turn the call over to Yohann to walk to our operating highlights. Very good. Thank you, Keith. So come and think about Rainy River. The operation continued to perform well, achieving another quarter in line with plan and delivering 10% increase in production over the third quarter last year. Through operational visit, Lynn, the operation is delivering on expectations and achieving a stable and reliable production quarter over quarter. The operation is well positioned to continue this trend into 2024.
It's been almost one year since I took the role as CEO of new gold.
I wanted to say how proud I am of our teams.
We have strengthened both our corporate and site management team throughout the year.
And we all share the same vision of one team.
Fully integrated and unfortunately, the same objectives of delivering on expectations safely.
Yohann Bouchard: Digrade or is planned from the lower ventures of phase three and the entry period on the run line and the processing plan is running well, achieving a throughput of more than 28,000 ton per day in September. The operation is on track, which is the top end of the production guidance and all in with an all in sustaining costs tracking to the midpoint. Open the open costs are expected to reduce significantly or after 2020.
We have come a long way and this is a driving force behind our strategy.
Before concluding the presentation I want to share a few reflections and reiterate what I have been saying throughout the year this year.
What I view to be the key priorities for the company.
Our first priority was to continue to stabilize our operations.
That's really the river the open pit challenges are behind us.
Yohann Bouchard: Before with the completion of the waste tripping, while speed grade or plan to increase as under run production ramp up to supplement, I grade meal feed from the pit. With more stable quality results, we're now looking forward to the next three years in which we see a growth growing production profile with declining costs, driving, increasing cash levels.
Underground production, that's interpreted square from well with positive reconciliation.
The connection ramp to the main zone Cummins in June and continues to make excellent progress.
New Afton Dmitry ramp up is complete and is exceeding planned extraction rate targets.
Our second priority was to continue to advance our organic growth opportunities.
Yohann Bouchard: Now on site, well, so the underground product. The production is planned to increase from the second half of 2024 with the expansion into the underground main zone. The connection around from entropy to underground main event is advancing well, and we expect to be in a position to start race boring, the fresh air rays in Q1 next year. In parallel, the entropy zone continue to produce between 800 with 1000 ton per day, with great recon filing positively with the blood models.
Catherine The river, we are on track to deliver first ore from the <unk> zone in Q4 'twenty to 'twenty four.
In production that Intrepid will continue below level 200.
Which would increase our your brief contribution from underground.
New Afton season is on track and has achieved several milestones over the last 12 months, including.
Completing the ticket dealings plant.
<unk> sees on permits.
Completing that when they were nine dewatering wells at new Afton tailings storage facility.
Yohann Bouchard: Now, turning now to the new afternoon, the operation as an excellent third quarter, achieving the highest quarterly production since 2021, mostly as a result of B3K continuing to exceed planned extraction rates. The exceptional performance over the first nine months puts you asking in an excellent position to achieve the top end of the 2023 production guidance and the bottom end of the cost guidance. We expect the increasing production profile to continue over the coming years as season ramp up production.
And completion of the first seasonal draw bill.
<unk> remains on track for commercial production in the second half of 2024.
You often also awed by improvising aboard can do to extend the mine life beyond 2030.
And we will look to follow up on these early successes with future exploration programs.
And third.
Oliver on our guidance set out earlier in the year.
We have performed well through 2023 with a continued focus on operational discipline and safety.
Yohann Bouchard: We made excellent progress this quarter, achieving two significant milestones. First, we complete the first raw bill at season on time. This is significant because it marks the start of the season production ramp up period, putting the project on track for commercial production in the second half of the year. The second is my stone into three was commissioning of the final debatering well at the New Aston payings power specificity as such, most of the activities and costs related to the payings, education, project, or not completed.
I am pleased that we are tracking to the top end of our production guidance.
And the low end of our all in sustaining cost guidance.
With four strong and consistent operating quarters behind us.
It will be clear that we now have in place.
The right people to get the job done.
The company is well positioned for significant free cash flow generation in the coming years.
I look forward to updating everyone in the coming quarters.
Yohann Bouchard: Rattling up on slide 15, the figure I like is drawn out look at you often and there's 40 points that I would like to talk about here. The first, as season ramp up, goal equivalent production is expected to average 230,000 ounces per year from 2024 to 2030, a 60% increase over the midpoint of 2023 guidance. Secondly, considering the six cost components of 60% with mining, 75% with processing and 90% with GNA, the unit cost per time basis is expected to decrease with the return of higher throughput rates.
This completes our presentation. So I will now turn it back to the Alberta Foreign exchange a portion of the call.
Operator.
Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by the one on your Touchtone phone.
Third, almost all catapex is upfront for a blockade, for a blockade mine, and as such there is a minimal capital expenditure after completion of the season project in 2025. And finally, beyond 2030, there is significant upside that could extend life of mine for many more years, which is supported by very encouraging expression results.
You will hear at retail and prompt acknowledging your request questions will be taken in the order received.
Should you wish to cancel your request. Please press the star followed by the tail.
Using a speaker phone please lift the handset before pressing any case once again that is star one should you wish to ask a question.
Your first question is from Eric Glynn, Neil from Scotia Bank. Please ask your question.
Hi, Good morning, Patrick Johan team. Thanks for taking my question.
Just wanted to drill down on rainy for a moment if I could please.
I made the decision to command to the underground vein zone from Intrepid.
Just wondering how we should look at the ramp up here towards the second half of 2024.
In terms of working faces kind of tonnes per day. The weather you still planning to put in the second decline.
Patrick Gooden: With that, I would turn the call back to Patrick. Patrick, thank you.
From the pit.
Patrick Gooden: So we're turning to our 23 2023 guidance following the strong results here today. Renewer is tracking toward the top end of the gold equivalent production range in all incidenting costs or tracking to the midpoint of the guidance range. That new item, I am pleased to see that copper gold and gold equivalent programs are all tracking toward the top end of the respective production guidance ranges with all incidenting costs tracking toward the low end of the respective costs guiding range.
Any comments would be helpful. Thanks.
Thanks for the question I'm going to take it up one so I guess I want to say that the range of advancing very well I mean, we're really pleased with us in the Grand Central what is excellent and we're going to we're pretty much in line I mean to start to do the pilot before the end of this here and start to ramp in Q1 next year.
Regarding like the progress on profile.
We're looking at being in or sometime in Q4 next year.
And we're going to see.
Let's say an increasing profile in 2025, but it's looking very good I just wanted to have I mean that we're also looking at mining below the 300 level of Intrepid that's going to also have higher grades that are puts us on plan, we're still working on our budget on that but so far I mean, we're really pleased with what we see and then similarly well.
Patrick Gooden: It's been almost one year since I took the role and see what new gold. I want to say our proud I am our teens. We have strengthened both our corporate and site management teams throughout the year, and we all share the same vision of one team fully integrated and pursuing the same objectives of delivering an expectation safely. We have come a long way, and this is a driving force behind our strategy.
About the second total.
With a solid I mean to do that from from <unk> adjusted not interfere with the open pit activities and.
And the second access at the bottom of the pits does not require on the short term because we're going to have the ventilation looped in a second but we're looking to have that that portals and start construction maybe in 2025 in order to have a.
Patrick Gooden: Before concluding the presentation, I want to share a few reflections and reiterate what I have been seeing throughout the year this year, and what I do to be the key priorities for the company. Our first priority was to continue to stabilize our operations. That's when a river, the open-pit challenges are behind us, and the only grown production that interfered has performed well with positive reconciliation. The connection ramp to the main zone comments in June and continues to make excellent progress.
Salter Hall with mining truck and do multiple hall with bigger truck to cut on cost hopefully that answered your question.
Yes Super helpful. Thanks, So much just one more from me if you don't mind I saw some news here about tell us or I guess doing nor purchase deal for new Afton to process a fee. There are any further comments on that.
Patrick Gooden: That new item, the B3 ramp up is complete and is exceeding planned extraction rate targets. Our second priority was to continue to advance our organic growth opportunities. That's when a river, we are in track to deliver first or from the main zone in Q4-2024, and production at Intrepid will continue below level 300, which would increase our rate contribution from underground. New Offensive Zone is on track, and has achieved several milestones over the last 12 months, including completing the ticket dating plan.
No I mean, Eric we have an investment in <unk> similar to EUR purchase agreement that we have in place a new app and we're always looking for compelling opportunities that generate free cash flow given the feed capacity, we have at new afton and so they've been a great partner to us and.
Yes.
We slept for free cash flowing or that can come to our mill.
It's a win win deal for Delek or as it is for new gold.
Okay, great. Thanks, I appreciate taking my questions.
Thank you.
Patrick Gooden: Receive of all these own permits, completing the 29th dewatering wells at the New Affentating Storage Facility, and completion of the first season drawbill. Seasons remains untracked for commercial production in the second half of 2024. New Affent also outlined promising opportunities to expand on my life beyond 2030, and we will look to follow up on these early successes with future exploration programs. And third, deliver on our guidance set out earlier in the year.
Thank you once again that is star one should you wish to ask a question. Your next question is from antitrust Tony from CIBC World markets. Please ask your question.
Hey, good morning, guys.
Couple of quick questions. Firstly in terms of the Capex spend I think.
You alluded to it.
The capital will decline significantly in 2025, but what would what should we expect for in terms of capital from that.
Often mine in 2024 and I'm just trying to I was just trying to look at my technical part quickly I'm wondering if that's still in line with what the Tech report had or whether or not there are significant changes outside of any.
Patrick Gooden: We have performed well through 2023 with a continued focus on operational discipline and safety. I am pleased that we are tracking to the top end of our production guidance and the four strong and consistent operating quarters behind us. It will be clear that we now have an in place, there are right people to get the job done.
Obvious inflationary.
The company is well positioned for sink and free cash load generation in the coming years, and I look forward to updating everyone in the coming quarters.
Adjustments from that the numbers quoted there.
Thanks Anita.
Where we sit and I know, we spent about $360 million. So far on the C Zone project as it were still in line with what we will be.
And the Tech report and looking forward to completing that in.
In the second half of <unk> of 2024.
Okay and then similarly question for rainy River is that still I mean that one dot Tech report far more up to date.
That.
Is that still valid.
Ankit Shah: This company, our presentation will now turn it back to the operator for the Q&A portion of the talk. Operator? Thank you.
Yes, yes, that's still in line I mean, you've probably seen under under and chip.
Strip ratio, we continue to work through optimizing our mining sequence and in 2023. So we'll continue that and look ahead to 2024, and then we will give guidance in that in 2024.
Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touch tone phone. You will hear a three tone prompt acknowledging your request. Questions will be taken in the order received. Should you wish to cancel your request, please press the star followed by the two. If you are using the speaker phone, please flip the handset before pressing any case. Once again, that is star one should you wish to ask a question.
Okay, and then just a question with with regards to the Ontario teachers pension plan buyback could you remind me when that comes due and what your plans are.
When it comes to that option being available.
I'm not quite sure I think that I think can do fairly soon and what would be the the <unk>.
Patrick Gooden: Your first question is from Eric Grinnell from Scotia Bank, please ask your question. Hi, good morning, Patrick Johan team, thanks for taking my question. I just want to drill down a rainy for a moment if I could please. You made the decision to come in to the underground main zone from the trepid. Just wondering how we should look at the ramp up here towards the second half of 2024 in terms of working faces kind of times per day, and whether you still plan to put in the second decline from the the end pit, any comments be helpful.
Purchase price for you to buy back at that would get Keith.
Thank you, yes, so the four year anniversary on that transaction is March 31, and then we have a 60 day window. So this is a Q2 2024 event.
In terms of evaluation together between us and teachers, we would hire an independent valuator.
Based on our updated budget plans.
That's currently in the works as we work through our budget. So this is more of a Q2 next year exercise.
Right now right now we're focused on our operations is generating cash flow and we'll evaluate this more in the first half of next year.
Patrick Gooden: Thanks. Thanks for the question. I'm going to take that one. I guess I want to say that the ramp is advancing pretty well, I mean, we're really pleased with us and the wrong control was excellent, and we're going to, we're pretty much aligned on the to start to do the pilot before the end of this year and start to run into one next year regarding like the production profile, we're looking at being in or some time into four next year, and we're going to see, I would say, an increasing profile in 2020.
Perfect. Thank you.
Thank you.
Thank you once again, please press star one should you wish to ask a question.
Thank you there are no further questions at this time. Please proceed.
Patrick Gooden: But it's feeling very good. I just want to have, I mean, that we're also looking at mining below the 300 level that intrepid, that's going to also have our great sort of processing plan. We're still working on a budget on that, but so far, I mean, we're really pleased with what we see and we're advancing very well, that about the second portal, we decide I need to do that from from intrepid, just to not interfere with the open pit activities, and that second access at the bottom pit is not required on the short term because we're going to have a ventilation loop and a second minovigress, but we're looking to have that portal and start construction maybe in 2025 in order to have a shorter haul with mining truck and do most of the haul with bigger truck to cut on costs. Hopefully did that answer your question. Yes, super helpful. Thanks so much.
<unk>.
Alright, Thank you Jenny and thank you everybody again for joining us today as always if you have any additional questions. Please feel free to reach out to us by phone or email have a great day.
Thank you ladies and gentlemen, the conference has now ended thank you all for joining you may all disconnect your lines.
Thank you Jenny.
I think we can disconnect now.
Patrick Gooden: Just one more for me, if you don't mind. I saw some news here about talus curve, I guess, doing an or purchase deal for new often to process feed there, any further comments on that? No, I mean, Eric, you know, we have an investment in talus curve similar to your purchase agreement that we have in place in New Afton. We're always looking for, you know, compelling opportunities that generate free cash flow, given the food capacity we have at New Afton.
Patrick Gooden: And so they've been a great partner to us and, you know, we always look for free cash flowing or that can come to our mill. It's a win-win deal for talus curve as it feels for New Gold. Okay, great. Thanks. Yeah, I appreciate your questions. Thank you.
Once again, that is star one for Jewish to ask a question.
Patrick Gooden: Your next question is from Annie Tassoni from CIBC World Markets. Please ask your question. Hi, good morning, guys. Just a couple of quick questions. Firstly, in terms of the cap expand, I think you alluded to it that, you know, the capital will decline significantly in 2025. But what would what what should we expect in terms of capital from the New Afton line in 2024? I'm just trying to just trying to look at my technical part quickly and wondering if that's still in line with what the tech report had or whether or not there are significant changes outside of any obvious inflationary adjustments from the numbers quoted there. Thanks Anita. No, we're still in line. You know, we spent about 360 million so far on the C zone projects.
Patrick Gooden: So we're still in line with what we what we had in the tech report and, you know, we're looking forward to completing that in the second half of 2024. Okay, and then similarly question for rainy river is that still I mean that one that tech report far more up to date that is that is that still valid? Yeah, yeah, still in line. I mean, you've probably seen on the on the M as triple ratio. We continue to work through optimizing our mining sequence in 2023.
Patrick Gooden: So, you know, we'll continue that and look ahead to 2024 and then we'll give guidance in that in 2024. Okay, and then just a question with with with regards to the Ontario teacher's pension plan buyback. Could you remind me when that comes to you and what what your plans are when it comes to that option being available. I'm not quite sure I think I think it's do fairly soon and, you know, what would be the purchase price for you to buy it back if that would get case?
Patrick Gooden: And you know, thank you. Yeah, this is the four year anniversary on the transaction is March 31st, and then we have a 60 day window. So this is a Q to 2024 event. You know, in terms of evaluation together between us and teachers, we'd hire an independent evaluator based on our updated budget plans. So, you know, that's currently in the work as we work through our budget.
Patrick Gooden: So this is more of a Q to next to your exercise. I mean, right now, right now we're focused on our operations just generating cash flow and, you know, we'll evaluate this more in the first half of next year, thank you. Thank you. Once again, please press star one to wish to ask a question. Thank you. There are no further questions at this time.
Jenny: Please proceed. All right. Thank you, Jenny. And thank you everybody again for joining us today. As always, if you have any additional questions, please feel free to reach out to us by phone or email. Have a great day. Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may all disconnect your lines. Thank you, Jenny. I think we can disconnect now.