Q1 2024 New Gold Inc Earnings Call

Lara: Good morning, my name is Lara, and I will be your conference operator today. Welcome to New Gold's first quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise.

Good morning, My name is Laura and I'll be your conference operator today welcome to Eagle <unk> first quarter of 'twenty 'twenty four earnings conference call. All lines have been placed on mute to prevent any background noise. Please be advised that today's conference call and webcast is being recorded.

Lara: Please be advised that today's conference call and webcast is being recorded. After the speaker's 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. If you would like to review your question, please press star, then the number two. I would now like to hand the conference over to Ankit Shah, Executive Vice President of Strategy and Business Development.

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 keypad. If you would like to withdraw your question. Please press Star then the number two.

I would now like to hand, the conference over to Amit Shah Executive Vice President of strategy business development. Thank you.

Ankit Shah: Thank you, Lara. And good morning, everyone. We appreciate you joining us today for New Gold's first quarter 2024 earnings conference call and webcast. On the line today we have Patrick Godin, President and CEO, Yohann Bouchard, our COO, and Keith Murphy, our CFO.

Ankit Shah: Thank you Laura and good morning, everyone. We appreciate you joining us today for new Gold's first quarter 2024 earnings conference call and webcast.

Ankit Shah: On the line today, we have Patrick <unk>, President and CEO, Joanna Bouchard, our CLO and Keith Murphy our CFO.

Ankit Shah: Should you wish to follow along with the webcast, please sign in from our homepage at newgold.com. Before the team begins its presentation, I would like to direct your attention to our cautionary language related to four looking statements found on slide two 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. There is caution that actual results and future events could differ materially from those expressed or implied in forward-looking statements.

Speaker Change: Wish to follow along with the webcast. Please sign in from our homepage at new gold Dot com.

Speaker Change: Before the team begins the presentation I would like to direct your attention to our cautionary language related to forward looking statements found on slide two 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.

Speaker Change: I cautioned that actual results and future events could differ materially from those expressed or implied in forward looking statements.

Speaker Change: Slide two provides 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, plus which set out certain material factors that could cause actual results to differ.

Ankit Shah: Slide 2 provides 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 CDAR Plus, which sets out certain material factors that could cause actual results to differ. In addition, at the conclusion of the presentation, there are a number of 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.

Speaker Change: 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 first of opening remarks.

Patrick Godin: Thanks, Ankit, and good morning, everyone. We had a good start to the year with the first quarter delivering as planned. We continue to see excellent health and safety performance at both operations, thanks to our Courage to Care Culture campaign. Rainy River surpassed 3 million hours before the last time injury, and New Afton surpassed 1 million hours.

Pat: Thanks, <unk> and good morning, everyone.

We had a good start to the year with the first quarter delivering as planned.

Pat: We continue to see excellent health and safety performance at both operations to our garage to care juncture campaigns.

Pat: Rainy River surpassed 3 million hours before the lost time injury at new Afton surpass 1 billion hours.

Patrick Godin: Our operations delivered on their quarterly plans as outlined in our operational outlook released in February, and you have then delivered strong first quarter production results. Rainier River made excellent progress on the planned waste stripping program, which will lead to unlocking higher grade ore in the second half of this year.

Pat: Our operation delivered on their quarterly plans.

Speaker Change: You know, we're a personal outlook where these from February.

Speaker Change: You often delivered strong first quarter production results.

Speaker Change: I remember made excellent progress on the planned waste stripping program, which will lead to unlocking higher grade ore in the second half of this year.

Patrick Godin: We are one quarter away from securing the substantial increase in production and cash flow expected in the second half of the year. We also made excellent progress on key growth projects, including the first concrete four at C-Zone Giratori-Crosher, and we set a record for the quarterly development advance rate at Winnie River's underground main zone. Our exploration efforts continue to ramp up as planned. At New Afton, the company made great progress on the exploration drift, which is expected to be operational for drilling in May.

Speaker Change: We are one quarter away from securing the substantial increase in production and cash flow expected in the second half of the year.

Speaker Change: We also made excellent progress on key growth projects, including the first concrete for that sees on directory crusher and we set a record on a quarterly development advance rates of 20 rivers underground zone.

Speaker Change: Our exploration efforts continue to ramp up as planned.

You have to them the company made great progress on the exploration drift, which is expected to be operational for drilling in me.

Patrick Godin: Q1 Exploration focused on drilling D-Zone and starting drilling T-Zone from current infrastructure. At Rainier River, the exploration program is ramping up with newly identified targets, and an additional 4 million will be allocated for 2024 to drill these new targets. Four drills are expected to be turning at Twinnie River during Q2. New Gold is well positioned to achieve its guidance targets and deliver on its plan of sustained free cash flow generation starting in a matter of months. We are entering a very exciting period for New Gold. With that, I will turn the call over to Keith.

Q1 exploration focus on drilling diesel and starting drilling T zone from current infrastructures.

Speaker Change: Trinity River. The exploration program is ramping up with newly identified target and an additional 4 million will be allocated for 'twenty into putting forward to drill these new targets.

Four drills are expected to be turning at twin River during Q2.

Speaker Change: New gold is well positioned to achieve our guidance targets.

Speaker Change: Deliver on our plan of system of system to free cash flow generation, starting in a matter of months.

Speaker Change: We are entering a very exciting period for newbuild.

Speaker Change: I will turn the call over to Pete.

Speaker Change: Eight.

Keith Murphy: Thank you, Pat. I'm on slide six, which has our operating highlights. Q1 was another solid quarter. We produced 70,900 gold ounces and 13.3 million pounds of copper. Rainy River produced approximately 52,700 gold ounces as planned, which is based on our annual guidance breakdown calling for a 40-60 split over the first and second half and while advancing waste stripping. In fact, taking the midpoint of our 2024 guidance range, our Q1 performance represents exactly 20% of production for the year.

Pete: Thank you Beth I'm on slide six which has our operating highlights Q.

Pete: Q1 was another solid quarter.

Pete: We produce 70900 gold ounces and $13 3 million pounds of copper.

Pete: Rainy River produced approximately 52700 gold ounces as planned which is based on our annual guidance breakdown, calling for a 40 60 split over the first and second half and while advancing waste stripping.

Pete: In fact, taking the midpoint of our 2024 guidance range. Our Q1 performance represents exactly 20% of production for the year.

Keith Murphy: New Afton produced approximately 18,200 gold ounces and 13.3 million pounds of copper. This represents an 11% increase in gold and a 29% increase in copper production compared to Q1 2023. This is like a season or a process.

Pete: New Afton produced approximately 18200 gold ounces and $13 3 million pounds of copper.

Pete: This represents an 11% increase in gold and a 29% increasing copper production compared to Q1 2023.

Pete: This is as the C zone ore is processed consol.

Keith Murphy: Consolidated all-in sustaining costs for the quarter were $1,396 per gold ounce on a by-product basis, in line with our plan. We expect costs to trend lower in the second half of the year. At New Afton, all-in sustaining costs for the quarter of $241 per gold ounce were lower than the prior year period due to increased copper production and sales. We expect costs to trend lower throughout the year as copper sales catch up.

Pete: Consolidated all in sustaining costs for the quarter were $1396 per gold ounce on a byproduct basis in line with our plan, we expect cost to trend lower in the second half of the year.

Pete: At new Afton, all in sustaining costs for the quarter up $241 per gold ounce were lower than the prior year period due to increased copper production and sales, we expect cost to trend lower throughout the year as copper sales catch up.

Keith Murphy: At Rainy River, costs will be higher in the first half of the year as the PIV focuses on waste stripping in line with the plan. However, costs benefited positively from an approximately $8 million inventory write-up gain driven by increased gold prices. This positively impacted costs at Rainy River by approximately $150 per ounce.

Pete: At rainy river costs will be higher in the first half of the year as the pit focuses on waste stripping in line with the plan.

Pete: Cost benefited positively from an approximately $8 million inventory write up gain driven by increased gold prices. This positively impacted costs at rainy river by approximately $150 per ounce.

Keith Murphy: Turning to our financial results on slide 7, first quarter revenue was approximately $192 million. Q1 revenue was lower than the prior year quarter, primarily due to planned lower sales volumes, partially offset by higher gold prices. Cash generated from operations before working capital adjustments was $73 million, or $0.11 per share for the quarter. The company recorded a net loss of approximately $44 million, or $0.06 per share during Q1. The increase in net loss as compared to the prior year quarter was primarily driven by lower revenues and a higher unrealized loss on the Rainy River Gold Stream Obligation and the New Afton Free Cash Flow Obligation.

Pete: Turning to our financial results on slide seven first quarter revenue was approximately $192 million Q.

Pete: Q1 revenue was lower than the prior year quarter, primarily due to planned lower sales volumes, partially offset by higher gold prices.

Pete: Cash generated from operations before working capital adjustments was $73 million or 11 cents per share for the quarter.

Pete: The company recorded a net loss of approximately 44 million or six cents per share during Q1.

Pete: The increase in net loss as compared to the prior year quarter was primarily driven by lower revenues and a higher unrealized loss on the rainy River Gulfstream obligations and the new Afton free cash obligation.

Keith Murphy: After adjusting for certain of the charges, net earnings were $13 million or $0.02 per share in Q1, compared to an adjusted net earnings of $18 million in the first quarter of 2023. The decrease in adjusted net earnings was primarily due to planned lower revenues.

Pete: After adjusting for certain other charges net earnings was $13 million or <unk> <unk> per share in Q1 compared to an adjusted net earnings of $18 million in the first quarter of 2023.

Pete: The decrease in adjusted net earnings were primarily due to planned lower revenues.

Keith Murphy: Our Q1 Adjusted Earnings include adjustments related to other gains and losses. Our total capital expenditures for the quarter were approximately $61 million, with $26 million spent on sustaining capital and $35 million on growth capital. Expiration expenditures total approximately $3.5 million before expiration tax credits which we received.

Pete: Our Q1 adjusted earnings include adjustments related to other gains and losses.

Pete: Our total capital expenditures for the quarter were approximately 61 million with 26 million spent on sustaining capital and 35 million on growth capital.

Pete: <unk> expenditures totaled approximately $3 $5 million before exploration tax credits, which we received.

Keith Murphy: At Rainy River, total capital increased over the prior year period due to higher growth capital. Sustaining capital is primarily related to capitalizing waste, capital components, and tailings management and construction. Growth capital is related to the underground development as the underground main zone continues to advance. At New Aston, total capital decreased over the prior year period, primarily due to lower growth capital spend.

Pete: At rainy River total capital increased over the prior year period due to higher growth capital spend.

Pete: Sustaining capital is primarily related to capitalized waste capital components, and tailings management and construction.

Pete: Growth capital is related to the underground development as the underground main zone continues to advance.

Pete: At New Afton total capital decreased over the prior year period, primarily due to lower growth capital spent.

Yohann Bouchard: Sustaining capital primarily related to tailings management and stabilization activities, while growth capital primarily related to the sea zone underground development. At the end of Q1, we had cash on hand of $157 million and a liquidity position of $530 million. We continue to execute short-term hedges on CAD and fuel and are hedged at 75% for Q2 2024, 50% for Q3 and 25% for CAD in Q4. To sum up, we remain in a very healthy financial position, all while continuing to invest in our growth project. Our operations are well positioned to leverage the higher metal price environment and generate significant free cash flows. Now, I'll turn the call over to Yohann to walk through our operating highlights.

Pete: Sustaining capital primarily related to tailings management and stabilization activities, while growth capital primarily related to the C zone underground development.

At the end of Q1, we had cash on hand of $157 million and a liquidity position of $530 million.

Pete: We continue to execute short term hedges on cat and feel and are hedged at 75% for Q2 2024, 50% for Q3 and 25% for CAD in Q4.

Pete: To sum up we remain in a very healthy financial position, all while continuing to invest in our growth projects. Our operations are well positioned to leverage the higher metal price environment and generate significant free cash flow.

Pete: Now I'll turn the call over to Johan to walk through our operating highlights.

Pete: Okay.

Yohann Bouchard: Starting with Rainie River on slide 9, Rainie continues to perform well, achieving another quarter in line with our plan. On the mining front, waste repaying was a focus during the quarter. This is expected to continue in the second quarter and will ultimately provide access to a greater quantity of high-grade ore early in the second half of the year. In the Underground Mine, extraction from the Intrepid Zone continues as planned, and development to the Main Zone is on schedule for first ore in the second half of 2024.

Johan: Thank you Keith while starting with rainy River on slide nine really continued to perform well achieving another quarter in line with our plan.

Johan: On the mining front waste repaying was a focus during the quarter. This is expected to continue in the second quarter and removal of Timothy provides access to greater quantity of <unk> or early in the second half of the year.

Johan: In the underground mine extraction from the Intrepid zone continues as planned and the development. Two main zone is on schedule for first ore in the second half of 2024.

Yohann Bouchard: In fact, Rainey achieved a record quarterly development advance rate of 950 meters in the first quarter. The mill performed very well, processing over 25,000 tons per day, almost 12% higher than Q1 of last year. The team has made tremendous progress improving mill performance at no additional capital requirement.

Johan: In fact, Randy achieved a record quarterly development advance rate of 950 meters in the first quarter.

Johan: The mill performed very well processing over 25000 ton per day, almost 12% higher than Q1 of last year.

Johan: The team has made tremendous progress improving mill performance at no additional capital requirements.

Johan: Okay.

Yohann Bouchard: The right side of the slide reiterates our outlook for 2024 and the previously guided split between first and second half. This is excellent information to highlight that the first quarter performance was according to plan. We remain on track for second half production representing approximately 60% of our annual production, mostly due to the open pit mining sequence. We have successfully transitioned from Phase 3 to Phase 4 and will continue to reclaim some lower grade stockpile in Q2 while we release higher grade ore in the pit for the second half of the year. Sustaining capital related to waste stripping will be elevated in the second quarter before trending down in the second half of the year.

Johan: The right side of the slide that reiterate our outlook for 2024 and the previously guided split between first and second half.

Johan: This is excellent information to highlight that the first quarter performance was according to plan.

Johan: We remain on track for second half production, representing approximately 60% of all enrolled production, mostly due to the open pit mining sequence.

Johan: We have successfully transitioned from phase three to phase four and will continue to reclaim some lower grade stockpiles in Q2, while we release higher grade ore in the pit for the second half of the year.

Johan: Sustaining capital related to waste stripping will be elevated in the second quarter before trending.

Johan: Down in the second half of the year.

Yeah.

Yohann Bouchard: Lateral development meters in the underground will ramp up throughout the year as we access additional underground mining zones and more headings become available. Slide 10 outlines progress we've made underground. The underground main zone remains on track for the first ore in the second half of 2024. The priority for 2024 is to establish the primary ventilation circuit and access multiple mining zones. These two events will be key to ramping up the mining rate to 5,500 tons per day by 2027, so I'd like to take a moment to address each.

Lateral development meters in the underground will ramp up throughout the year and.

Johan: We access additional underground mining zone, and more adding become available.

Johan: Okay.

Johan: Slide 10 outlines the progress we've made underground.

Johan: The underground means zone remain on track for first ore in the second half of 2020 for.

Johan: The priority for 2024 is to establish the primary ventilation circuit and access multiple mining zones.

Johan: These two events will be key to ramping up mining rate to 5500 tonnes per day by 2020, southern so I'd like to take a moment to address each.

Yohann Bouchard: First, the team at Trini did an excellent job advancing underground lateral development. The quarterly development advance rate of 950 meters was a quarterly record at the site. As additional adding open and that an additional underground mining open is delivered, the development rate is expected to increase throughout the year. Second, raise boring of a five meter diameter, 420 meter long fresh air raise has commenced in the second quarter. In addition, the construction of the in-pit portal offering a second means of egress and decreased awing distance will commence in the second quarter of this year. Turning now to Nuwahten on slide 11. New Afton had a good start to the year.

Johan: First the team at <unk> did an excellent job of advancing underground lateral development.

Johan: Accordingly, the Bluffton advance rate of 950 meters was a quarterly record at the site.

Johan: As additional adding open.

Johan: And additional underground mining augment is deliver deadlock on rate are expected to increase throughout the year.

<unk> raise boring a sort of a five meter diameter 420 meter long the fresh air Reyes as commence in the second quarter.

In addition, the contraction of the in pit portal offering a second meeting a vigorous and decrease all this stance will commence in the second quarter of this year.

Johan: Turning now to new Afton on slide 11.

Yohann Bouchard: B3 continues to deliver above 8300 tons per day, and the sea zone ramp-up has been going to plan, leading to a 25% increase in ton milled and a corresponding increase in gold and copper production compared to Q1 last year. The increased copper production is the primary driver of the reduced all-in sustaining costs compared to the prior year period. Now, look at the information on the right side of the slide.

Johan: New Afton as a good start to the year B three continue to deliver above 8300 tons per day and the C zone ramp up has been going to plan, leading to a 25% decrease in ton milled and a corresponding increase in gold and copper production compare to Q1 last year.

<unk>.

Johan: The increased copper production is the primary driver of the reduced all in sustaining cost compared to the prior year period.

Johan: Looking now at the information on the right side of the slide.

Yohann Bouchard: After one quarter, we're trending in line with the annual plan. We continue to transition from the B3K to C-Zone and expect to see a significant ramp-up in C-Zone mining rates throughout the year. We continue to expect the higher throughput in 2024 to be partially offset by lower field grade due to the cave draw sequence, leading to a fairly consistent corally gold and copper production profile as planned. T3 progress is shown on slide 12.

Johan: After one quarter, we're trending in line with the annual plan, we continue to transition from the <unk> zone and expect to see a significant ramp up in zone mining rate throughout the year.

We continue to expect the higher throughput in 'twenty.

Johan: 24 to be partially offset by lower feed grade due to the cave draw sequence.

Johan: Leading to a fairly consistent poorly gold and copper production profile as planned.

Johan: Q3 progress as show on Slide 12, while the commissioning of the territory Crusher and conveyor system is on track for the second half of the year.

Yohann Bouchard: All commissioning of the Territory Crusher and Convair system is on track for the second half of the year. This will eliminate hauling requirements and impact positively on costs going forward. As you can see in the picture, we are making excellent progress. The first foundation stone took place in February, and we've continued to build on our progress since then. We also continue to expect the cave to reach hydraulic radius in the second half of 2024. These two milestones will be transformative for New Afton, increasing production and decreasing costs to generate a substantial cash flow. I will not turn the call back to you.

Johan: This will eliminate hauling requirement and impact positively on cost going forward.

As you can see in the picture, we are making excellent progress. The first foundation for took place in February and we've continued to build on our progress since then.

Johan: We also continue to expect the cave to reach hydraulic radius in the second half of 2024.

Johan: These two milestone will be transformative for new afton, increasing production and decreasing cost to generate a substantial cash flow.

Johan: I will now turn the call back to Pat.

Pat: Thank you to them so just to sum up.

Patrick Godin: Operationally, we have made excellent progress and delivered the first quarter as planned. We will continue to deliver on our stated strategic goals, which for 2024 include delivering on production and cost guidance. This result marked the seventh consecutive quarter that we have delivered on our promises to our planet.

Virtually we have made excellent progress and delivered the first quarter as planned.

Pat: We will continue to deliver on our students rather to goals.

For 2024 does include delivering on production and cost guidance.

Pat: This result marks the seventh consecutive quarter that we have delivered to our plant.

Patrick Godin: Technical Excellence and Operational Discipline are New Gold's key to ensuring consistent quarter-over-quarter results. I just want to express all my gratitude to my colleagues for that. I think to be consistent means more than talent, so I'm really proud of their commitment, their teamwork, and their leadership. I just wanted to say thank you for that.

Technical excellence and operational discipline, our new goal is key to ensuring consistent quarter over.

Pat: Over a quarter result.

Speaker Change: Just wanted to express my gratitude to my colleagues for that.

Speaker Change: Thank you.

Speaker Change: To be consistent it means that it's been more than talent. So I'm really proud of their commitment their teamwork and diluted ships. So.

Speaker Change: Just wanted to say thank you for that.

Patrick Godin: Exploration continues to advance at both sites, with the exploration drift progressing as planned at New Aspen and drilling ramping up at Twinnie River. We continue to focus on both extending our mine lives and finding new prospective targets to achieve our strategic objective of a sustainable production platform of approximately 600,000 gold equivalent ounces per year. With regard to our new Afton Buyback, we continue to have ongoing discussions with teachers as we are within our buyback period.

Speaker Change: Exploration continues to advance at both sites, we have the exploration drift progressing as planned at the lifestyle and drilling ramping up Trinity River.

Speaker Change: We continue to focus on both extending our mine lives and in finding new prospective target to achieve our strategic objective of sustainable operational platform of approximately 600000 gold equivalent ounces per year.

Speaker Change: With regard to our new often buyback we continue to have ongoing discussions with teachers.

Speaker Change: We are within that where buyback period.

Patrick Godin: We expect to provide market clarity with regard to the new asset buyback later this quarter. At New Hampton, we will achieve commercial production at C-Zone and commission the crusher and conveyor. At Trinity River, we will reach the first door from the underground main zone.

Speaker Change: We expect to provide market clarity with regard to the new Afton buyback later this quarter.

Speaker Change: New Afton, we will achieve commercial production at <unk> zone, and commissioning of the crusher and conveyor.

That's really river, we will reach first ore from the underground Naser.

Patrick Godin: As I said at the start of the presentation, we are one quarter away from pushing the company for a substantial and sustainable increase in production commencing in the second half of the year. This is a transformative year for our company and our shoulders. This completes our presentation. I will now turn it back to the operator for the Q&A portion of the call. Sarah.

Speaker Change: As I said at the start of the presentation. We are one quarter away from pushing the company for substantial and sustainable increase in production commencing in the second out of the year.

Speaker Change: This is transformative year for our company and our shareholders.

Speaker Change: This completes our presentation I will now turn back to the operator for the Q&A portion of the call.

Speaker Change: Barbara.

Barbara: Thank you Sir.

Lara: Ladies and gentlemen, you will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touchtone phone. You will hear a three-tone prompt acknowledging your request. Should you wish to decline from the polling process, please press star followed by the number two. If you are using a speakerphone, please lift your handset before pressing any key.

Barbara: Ladies and gentlemen, you will now begin the question and answer session.

Barbara: You have a question. Please press star followed by the number one on your Touchtone phone line, you will see telecom acknowledging your request should use silicon from the polling process. Please press star followed by the number two.

Barbara: If you are using a speaker phone please lift your handset before pressing Alex.

Lara: One moment, please for your first question. Your first question comes from the line of Mike Parkin from National Bank. Go ahead.

Barbara: One moment. Please for your first question.

Barbara: Your first question comes from the line of Mike Parkin from National Bank Go ahead. Please.

Mike Parkin: Hi guys, I may have missed it, but could you just, um.., recap how many draw bells you have completed at C-Zone and maybe where you are hoping to be around end of Q2? We can arrange it if that works, and congrats on a good quarter too, by the way.

Mike Parkin: Hi, guys I may have missed it but could you just.

Mike Parkin: Sure.

Mike Parkin: Recap, how many draw bells.

Speaker Change: Half complete.

At C zone, and maybe where you are hoping to be around.

Speaker Change: End of Q2, it can be a range that works and congrats on a good quarter to you by the way.

Unknown Executive: So we, yeah, thanks Mike for the question here.

Speaker Change: So yes.

Unknown Executive: Yeah, thanks Mike for the question here. I mean, at the end of Q2, we had about 4 drawbells built, and we have, I think, about 10 that are ready to be built, basically. So we are following the plan on that task deck. So development seems to be slightly ahead of time as well. So we're trending really well, so there's basically no delay basically as of the end of Q1.

Speaker Change: Thanks, Mike for the question here I mean as of the end of Q2, we had about fall draw bells, I mean bill and.

Speaker Change: We have I think about 10 that is already I mean to be billed daily. So we are following.

Speaker Change: We are basically following the plan on that aspect.

Speaker Change: The block nine seems to be <unk> at a time as well so we're trending really well.

Speaker Change: There is no delay basically.

Speaker Change: As of the end of Q1.

Speaker Change: Okay. Thanks very much.

Speaker Change: Okay.

Lara: Our next question comes from the line of Eric Winmill from Scotiabank. Go ahead.

Speaker Change: Our next question comes from the line of Eric <unk> from Scotiabank go ahead. Please.

Speaker Change: Okay.

Eric Winmill: Oh, hey, Pat and team. Thanks for taking my question. And nice to see the strong results this quarter.

Eric: Hello, Hey, Pat and team. Thanks for taking my question and nice to see the strong results this quarter maybe.

Eric: Maybe just a question for me on the rainy River exploration, obviously, great to see the exploration budget, increasing there when it comes to open pit targets any additional comments here on things like ODM East and how that compares maybe to the potential pushback on the phase five and how are you thinking about the open pit targets.

Eric Winmill: Maybe just a question from me on the Rainy River exploration. Obviously, great to see the exploration budget increasing there. When it comes to open pit targets, any additional comments here on things like, you know, ODF East and, you know, how that compares maybe to the potential pushback on phase five? And how are you thinking about the open pit targets?

Eric: Neuro is what we are we're progressing well on this we did a we redo the models or goes did the older. The work prior to initiate the drilling so and we.

Eric: We will initiate drilling it wouldn't be a mix of diamond drilling in RSV drills and the drills, we will mobilize the question a few weeks now.

Eric: Two weeks from now.

Eric: And then we will probably I think more quality during Q3.

Unknown Executive: No, it's what we are. We're producing well on this, we did, we redid the models. So guys did all the work prior to initiating drilling. So we'll initiate drilling, it will be a mix of diamond drilling and RC drills, and the drills will mobilize in a question of a few weeks now, in a few weeks from now. And we will probably be having more quality during Q3. But we will initiate the program as planned. We're slowly in advance.

Eric: We initiated the program as language arena events.

Unknown Executive: Okay, great. Thanks for that. And maybe just on the crusher at New Afton, so obviously, concrete works are ongoing. Any other sort of critical path items or milestones here in terms of getting that up and running?

Speaker Change: Okay, great. Thanks for that and maybe just on the crusher, new often so obviously concrete works are ongoing any other sort of critical path items or milestones here in terms of getting that up and running.

Unknown Executive: I'm going to take that one here. I think it went really well. We did the first four in February, and it went really well. We're still working. I mean, we still have to do one in Q2, and we should be done after that, and we're going to pass that. We're going to pass putting the tarot together, but we have basically—we think that we're slightly ahead on schedule on that one, but I mean, we're going to be ready in time, and we have all the equipment on site as well. There's no problem with time on the equipment, so we feel really good, and we're hitting the milestones one after the other on that, so there's no stress there.

Speaker Change: Okay got it thank thats one here.

Eric: I think it's really well within the first four in February and it went very well we're still working on it.

Eric: We still have to do one in Q2, and we should be done. After that then we got passed but they're going to pass up putting the.

Eric: Starwood together.

Eric: We have basically.

Eric: The thing that we're slightly ahead on schedule on that one but.

Eric: It means we're going to be ready in time, and we have all the equipment on site as well Thats no problem. The lead time on the equipment. So we feel really good and we're hitting the milestone one I said the other on that so there's no stress there.

Eric Winmill: Okay, that's great to hear. Thanks for the call. I appreciate it. So congrats on the quarter. I'll hop back in the queue. Cheers.

Speaker Change: Okay, that's great to hear thanks for the color I appreciate it so congrats on the quarter I'll hop back in queue.

Lara: Ladies and gentlemen, just a reminder, should you have a question, please press star followed by the number one on your touchstone phone. We have our next question coming from the line of Anita Soni from CIBC. Go ahead. Hi, good morning.

Speaker Change: Ladies and gentlemen, just a reminder, should you have a question. Please press star followed by the number one on your Touchtone phone.

Speaker Change: Our next question coming from the line of Anita Soni from CIBC go ahead. Please.

Anita Soni: Hi, good morning, Patrick and team. So my first question is, at Rainy River, the tonnage was a little light on the ore. Is that going to pick up in the second and third quarters, I assume, just because of some of the, sorry, the weather-related events there that you have.

Anita Soni: Hi, Good morning, Patrick. Thank you. So my first question.

Anita Soni: At rainy River.

Anita Soni: The tonnage was a little light on the or is that going to pick up.

Anita Soni: In the second and third quarters, I assume just because of the.

Anita Soni: Some of the sorry, the weather related events, there that you have.

Unknown Executive: Thanks for the question. We're not impacted by the weather at all, actually. It's rainy.

Anita Soni: Any thought at all.

Speaker Change: We're not like thanks for the question.

Speaker Change: We're rather impacted by the weather at all actually.

Unknown Executive: I mean, for sure. I mean, as you know, in Q2, we have a limited amount of ore runoff mined, I would say that comes from the open pit, and we have to mix with the stockpile on the surface. And I would say Q2 is going to be better than Q1. But overall, I mean, we don't see any concern in that aspect. In fact, we see, basically, the extraction rate increasing, I would say, in Q2, above expectations.

Randy: It's Randy.

Randy: I mean for sure I mean as you as you know what I mean in Q2.

Randy: <unk> limited amount of ore run off mine I would say that come from the open pit and we have to mix with.

Randy: The stockpile on surface and.

Randy: I would say Q2 going to be better than Q1, but overall I mean.

Randy: We don't see any concern that aspect and in fact, we see basically extraction rate increasing I would say.

Randy: In Q2 above expectation and thats going to puts us in excellent position to deliver on the.

Unknown Executive: And that's going to put us in an excellent position to deliver on our 40-60% ratio this year. And I guess, hopefully, it's going to put us a little bit ahead of the game at the end of this quarter. So, I feel good. I think we're managing that risk really well. When we started, I would say, phase 4, the bench was smaller. Now, we've got a bigger and bigger bench. So, productivity is

Randy: I'll now 40, 60% ratio.

Randy: This year and I guess, hopefully is going to put us a little bit ahead of the game at the end of this quarter, but so getting good I think we're managing that risk for the well.

Randy: I think that I don't want like to have that that timing when do we start up I would say face, Florida bench, where smaller now we got bigger and bigger bands. So putting <unk> is much better and as well to move with the drill around its easier and we're also having better drilling performance with semi equipment. So I think that the.

Unknown Executive: And, as well, moving the drill around is easier, and we're also having better drilling performance with the same equipment. So, I think that... The toughest part, I mean, to start that phase was really behind us.

Randy: The toughest part I mean to start.

Randy: That phase was really behind us.

Unknown Executive: Okay, and then another question with respect to the inventory adjustments at Rainy River. Is that going to recur in the following quarters, or was that just a one-time adjustment?

Speaker Change: Okay and then.

Randy: Another question with respect to the.

Randy: The inventory adjustments at rainy River.

Randy: We did that is that going to recur.

Randy: In the following quarters or is that just a onetime adjustment.

Unknown Executive: Yeah, that was an adjustment in the first quarter due to the value we assigned to the low grade stockpile. We use a, you know, a medium-term price; we don't expect there to be, you know, a mark to market adjustment significant for the rest of the year.

Randy: Yes.

Speaker Change: Yeah that was it an adjustment in the first quarter and due to the value we assigned to the low grade stockpile and we use a.

Randy: Medium term price, we don't expect ATB and mark to market adjustments significant to the rest of the year.

Anita Soni: Okay, and then lastly, on New Afton, the tonnage is running just slightly ahead of, I guess, what I would have expected. It seems like if you, you know, continue to deliver an even year in terms of production guidance, quarter over quarter, you're going to end up near or a little over the top end on New Afton. Do you expect Q2 to moderate a little bit so that you're closer to that 50-50 or right now? Or are you sort of, you know, is the plant operating better than expected, you know, could we be gearing towards the top end?

Randy: Okay, and then lastly on new Afton.

Randy: <unk> is running just slightly ahead of them.

Speaker Change: I guess, what I would have expected it seems like if you.

Randy: Continue to delivering even an even year in terms of production guidance.

Randy: Quarter over quarter, Youre going to end up near or a little over the top and on new Afton do you expect Q2 to moderate a little bit. So that you are closer to that 50 50 or right now are you sort of.

Randy: Yes.

Randy: Is the plant operating better than expected could you may be hearing towards the top end.

Unknown Executive: Yeah, I mean, in our view, I mean, for sure, we're going to see some fluctuation for a quarter, but not so much. But basically, we see stable production at New Afton between the second and the first and the second half of the year.

Randy: Yeah.

Randy: In our view I mean for sure we're going to see some fluctuation quarter over quarter, but not so much but basically we see a stable production at new Afton I mean between the second and the first on the second half of the year.

Anita Soni: Okay, thank you. That's it for my questions.

Speaker Change: Okay. Thank you that's it for my questions and also don't forget I mean, we have we do have processing capacity.

Anita Soni: And also, don't forget, we do have processing capacity. I mean, I mean, so I mean, if we have it, we can really like manage our grade and throughput and be able to get the target production without any problem. Okay, thank you very much.

Randy: So I mean, if we have we can really like mayonnaise, our grade and throughput and be able to hit that target production without any problem.

Anita Soni: Okay, thank you very much. Congratulations on a good quarter.

Speaker Change: Okay. Thank you very much and congrats on a good quarter.

Speaker Change: Thank you too.

Ankit Shah: Thank you. There are no further questions at this time. I'd now like to turn the call back over to Mr. Shah for his final closing comments.

Speaker Change: Thank you there are no further questions at this time I would now like to turn the call back over to Mr. Shah for final closing comments.

Ankit Shah: Great, thank you, Laura. And to all of you who have joined us today, thanks again. As always, should you wish, should you have additional questions, please do not hesitate to reach out to us by phone or email. Have a great day.

Shah: Great. Thank you Laura and to all of you who have joined US today. Thanks again as always should you wished. It should you have additional questions. Please do not hesitate to reach out to us by phone or email have a great day.

Lara: Thank you, sir. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.

Speaker Change: Thank you, Sir ladies and gentlemen, this concludes your conference call for today.

Speaker Change: Thank you for participating and ask that you. Please disconnect your lines have a lovely day.

Speaker Change: Okay.

Randy: Yeah.

Randy: Hum.

Randy:

Randy: Okay.

Randy: Yes.

Randy: Yes.

Randy:

Randy: Uh huh.

Randy: Yes.

Randy: Yes.