Q2 2024 New Gold Inc Earnings Call
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Speaker Change: Please be advised 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 seemed you press star followed by the number one on your telephone keypad and if you would like to withdraw your question. Please press the star followed by the number too.
<unk> Shah: I would now like to hand, the conference over to <unk> Shah Executive Vice President of strategy and business development. Please go ahead.
Shah: Thank you Louise and good morning, everyone. We appreciate you joining us today for new Gold's second quarter 2024 earnings conference call and webcast.
Speaker Change: On the line today, we have Patrick <unk>, President and CEO and Keith Murphy our CFO.
Speaker Change: Addition, we also have Luke Buchanan Vice President of technical services, and John <unk>, Vice President of geology available for the question and answer answer portion of the call.
Speaker Change: Should you wish to follow along with the webcast. Please sign in from our homepage at <unk> 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.
Speaker Change: 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: You are 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.
Speaker Change: We also refer you to the section entitled Risk factors in New Gold's latest Aif MD&A and other filings available on SEDAR, plus which set out certain material factors that could cause actual results to differ.
Speaker Change: In addition at the conclusion of the presentation. There are a number of end notes that provide important information and should be in conjunction with the material presented I will now turn the call over to Pat and remarks.
Thanks.
Pat: Before discussing the quarter.
Pat: To take a moment to discuss last week's.
Pat: When we experience the fidelity of the rainy River mine.
Pat: More specifically, we lost a colleague.
Pat: Alright talks continue to be with his family and friends.
Pat: Every quarter, we go I'll start by talking about safety.
Speaker Change: I will talk about our courage to care tutor.
Speaker Change: We do this because I believe.
Speaker Change: The key the key to consistent and disciplined production start with.
Speaker Change: With safe production.
Speaker Change: It starts with the coverage to care for our colleagues.
Speaker Change: Looking out for one another.
Speaker Change: Being word if it's not safe and answering everyone goes on to their family and friends safely.
Speaker Change: And a fair ratio.
Speaker Change: I've been proud of the ultimate safety performance by our accretion embody the commitment of all employees.
Speaker Change: We have been able to celebrate the awards and milestones together, but in the instance.
Speaker Change: We mourn together with the family friends and colleagues who have been impacted by this tragic.
Speaker Change: Incident.
<unk> Shah: I will now talk about our second quarter.
<unk> Shah: The second quarter's new gold deliver another quarter.
<unk> Shah: As planned.
<unk> Shah: During the quarter, our new Afton mine, one two superb award for having the lowest total recordable injury frequency rate in 2023.
<unk> Shah: The first being the safest large on the role mining D. C presented by the BC Ministry of energy margins in low carbon innovation.
<unk> Shah: And the second being the John P. Reilly and original CTO word in mines in BC in Yukon presented by the Canadian Institute of mining.
<unk> Shah: I am pleased to take a moment to recognize their accomplishments.
<unk> Shah: Operationally, we deliver on the quarterly plan with Australia D runs through our Bushnell outlook release from February.
<unk> Shah: You have to and deliver a strong quarterly production result at low cost.
<unk> Shah: Renew that river made excellent progress on the plan waste stripping program and the open pit is well positioned to deliver on our increasing production profile for the second half of the year.
<unk> Shah: On our first quarter call I know that we were one quarter away from securing the increase in production and cash flow expected in the second half of the year.
<unk> Shah: I am pleased to see that annually, we entered the period with we do so having finished the first half of the year with free cash flow positive.
<unk> Shah: And with the company exiting the first half were put into 'twenty for free cash flow positive.
Speaker Change: Im pleased to see that new Golar as low entered.
<unk> Shah: And free cash flow generation period.
<unk> Shah: We also.
<unk> Shah: Made excellent progress on key growth projects importantly, all key growth projects remain on track for completion in the second half of the year.
Speaker Change: We made significant progress with our exploration effort at both operations in the second quarter.
<unk> Shah: At New Afton the company provided a positive exploration update on season.
<unk> Shah: The team there also complete the exploration drift early in the quarter and immediately began advancing priority near mine targets.
<unk> Shah: Now to rainy River exploration drilling continues to make meaningful progress from both surface and underground.
<unk> Shah: Through the first half of 2024, the company out of Israel approximately 320.
<unk> Shah: 20000 meters at Trinity River, there's been various Io priority targets were.
<unk> Shah: We are anticipating providing an exploration update later in the third quarter.
<unk> Shah: The company also achieve a number of corporate milestone in the quarter, we announced the publication of our 2023 years do report something the company has published annually since 2015.
<unk> Shah: As well as our 2023 task force on climate related financial disclosure report.
<unk> Shah: All reports are available on our website.
<unk> Shah: As a last point I'm extremely pleased to underline that we successfully delivered and decorative transaction forward shoulder by increasing our free cash flow interest in new afton to 81%.
<unk> Shah: To sum up.
<unk> Shah: The second quarter in the first half of the year met expectations.
<unk> Shah: And the company is well positioned to deliver on guidance and sustaining free cash flow generation going forward.
<unk> Shah: With that I will turn the call over to Kate.
<unk> Shah: <unk>.
Kate: Thank you Bob.
Kate: On slide six which has our operating highlights.
Kate: Q2 was another solid quarter.
Speaker Change: We used approximately 69000 gold ounces and <unk> 6 million pounds up.
Speaker Change: Any river produced approximately 50300 gold ounces at <unk>.
Kate: While advancing waste strip.
<unk> Shah: New Afton produced approximately 18300 gold ounces and $13 6 million pounds of copper.
<unk> Shah: This represented an 8% and 10% increase in gold and 13% increase in copper production compared to Q2 2023 axes on ore processing is ramping up.
<unk> Shah: Consolidated all in sustaining cost for the quarter were $1381 per gold ounce on a byproduct basis in line with plan.
<unk> Shah: We expect cost to trend lower in the second half of the year.
<unk> Shah: At new Afton, all in sustaining cost for the quarter of negative $433 per gold ounce was significantly lower than the prior year period due to increased copper production and sales.
I'm extremely pleased to underline that we successfully delivered and acquisitive transaction power shoulder by increasing our free cash flow interest in new afton to 81%.
To sum up.
<unk> Shah: At rainy river costs were higher compared to Q2 2023, but in line with plan and.
The second quarter in the first half of the year met expectations.
And the company is well positioned to deliver on guidance and sustaining free cash flow generation going forward.
<unk> Shah: They are expensive and lower in the second half.
<unk> Shah: Production increases.
<unk> Shah: Turning to our financial results on slide seven.
With that I will turn the call over to Pete.
<unk> Shah: Second quarter revenue was approximately $219 million.
Sure.
Pete: Thank you Bob.
<unk> Shah: Q2 revenue was higher than the prior year quarter, primarily due to higher metal prices and higher copper production, partially offset by lower planned gold production.
Pete: On slide six we kept our operating highlights.
Pete: Q2 was another solid quarter.
Speaker Change: We used approximately 69, hasnt gone down $13 6 million pounds up.
Speaker Change: Cash generated from operations before working capital adjustments was $90 million or <unk> 14 per camera per client.
Pete: Any river produced approximately 50300 gold ounces and plan, while advancing waste strip.
<unk> Shah: This is higher than the prior year period, primarily due to higher revenues and positive working capital adjustments.
Pete: <unk> produced approximately 18300 gold ounces from $13 6 million pounds of copper.
<unk> Shah: Company recorded net earnings of approximately $52 million or <unk> <unk> per share during Q2.
Pete: This represented an 8%, 10%, increasing gold and 13% increase in copper production.
<unk> Shah: The increase is primarily due to additional revenues, resulting higher metal prices and a net gain on the derecognize them of the new App and free cash flow obligations.
Pete: Compared to Q2 2023 as sees on ore processing is ramping up.
Pete: Consolidated all in sustaining costs for the quarter were $1381 per gold ounce on a by.
<unk> Shah: In connection with the amended Ontario teachers agreement the liability related to the original agreement that was recorded at fair value was extinguished.
Pete: Product basis in line with plan.
Pete: We expect cost to trend lower in the second half of the year.
Pete: At new Afton, all in sustaining costs for the quarter of negative $433 per gold ounce was significantly lower than the prior year period due to increased copper production and sales.
<unk> Shah: Updated agreement did not constitute a financial liability for accounting purposes, and will be counted for the partial disposition of mining interests.
<unk> Shah: Net impact of this with a $42 million.
Pete: At rainy river costs were higher compared to Q2 2023, but in line with plan and they are expected to trend lower in the second half.
<unk> Shah: After adjusting for certain other charges net earnings was $17 million or <unk> <unk> per share compared to adjusted net earnings of $12 million in the second quarter of 2023.
Pete: Production increases.
Pete: Turning to our financial results on slide seven.
Pete: Second quarter revenue was approximately $219 million.
<unk> Shah: Our Q2 adjusted earnings include adjustments related to other gains and losses.
Pete: Q2 revenue was higher than the prior year quarter, primarily due to higher metal prices and higher copper production, partially offset by lower planned gold production.
<unk> Shah: Our total capital expenditures for the quarters were approximately $72 million with $32 million spent on sustaining capital and $41 million on growth capital.
Pete: Cash generated from operations before working capital adjustments was $90 million or <unk> 14 per share for the quarter.
<unk> Shah: At rainy River total capital increased over the prior year period due to higher growth capital spent.
Pete: This is higher than the prior year period, primarily due to higher revenues and positive working capital adjustments.
<unk> Shah: Sustaining capital is primarily related to capitalized waste capital components tailings impoundment construction.
Pete: Company recorded net earnings of approximately $52 million or <unk> <unk> per share during Q2.
<unk> Shah: Sustaining capital is trending lower as the proportion of waste tonnes of capitalized and a higher proportion remaining remains in operating costs.
Pete: The increase is primarily due to additional revenues, resulting from higher metal prices and a net gain on the fee recognition of the new afton free cash flow obligations.
<unk> Shah: No net impact on ASIC.
<unk> Shah: Growth capital is related to underground development at the underground mine continues to advance.
Speaker Change: In connection with the amended Ontario teachers agreement the liability related to the original agreement that was recorded at fair value was extinguished. The updated agreement did not constitute a financial liability for accounting purposes and was accounted for the partial disposition of lining interests.
<unk> Shah: At New Afton total capital decreased over the prior year period, due to both lower growth and sustaining capital stack.
<unk> Shah: Sustaining capital is primarily related to tailings management and stabilization activities.
<unk> Shah: Capital is primarily related to the CS on underground development.
Speaker Change: Net impact of this was a $42 million.
<unk> Shah: At the end of Q2, we had cash on hand of 184 million with a liquidity position of 461 time.
Speaker Change: After adjusting for certain other charges net earnings was $17 million or <unk> <unk> per share compared to adjusted net earnings of $12 million in the second quarter of 2023.
Speaker Change: This is after increasing new goes effective free cashflow interesting, new afton to 81% for an upfront cash payment of 255 million financed with $100 million from an existing airplane from our existing revolving credit facility and net proceeds from a concurrent equity financing.
Speaker Change: Q2, adjusted earnings include adjustments related to other gains and losses.
Speaker Change: Our total capital expenditures for the quarters were approximately $72 million with $32 million spent on sustaining capital and $41 million on growth capital.
<unk> Shah: We anticipate repaying the credit facility with free cash flow generated in the second half of 2024.
Speaker Change: At rainy River total capital increased over the prior year period due to higher growth capital spent.
<unk> Shah: Sum up we remain in a very healthy financial position, all while continuing to invest in growth projects.
Speaker Change: Sustaining capital is primarily related to capitalized waste capital components tailings management and construction.
<unk> Shah: As we successfully executed on half one objectives. We have ended the sustaining period of free cash flow generation, and we are well positioned to leverage the higher metal price environment.
Speaker Change: Sustaining capital is trending lower as the proportion of waste tonnes are capitalized and a higher proportion remaining remains an operating costs with no net impact on ASIC.
Speaker Change: Now I'll turn the call back to walk through our operating highlights.
Speaker Change: Growth capital is related to underground development at the underground mine continues to advance.
Keith Murphy: Thanks Keith.
Keith Murphy: Starting to refer the river on slide nine.
Speaker Change: At New Afton total capital decreased over the prior year period, due to both lower growth and sustaining capital spend.
Speaker Change: Rainy River continues to perform well achieving another quarter in line with our plant.
Speaker Change: On the mining front waste stripping was the photos during the quarter an increase from Q1.
Speaker Change: Sustaining capital is primarily related to tailings management and stabilization activities growth capital is primarily related to the <unk> underground development.
Speaker Change: I am pleased to mention that the open pit is in excellent position as we started the second half of the year.
Speaker Change: At the end of Q2, we had cash on hand of $184 million with a liquidity position of 461 time.
Speaker Change: Waste stripping is expected to decline through the remainder of the year as we access greater quantities of grid order.
Speaker Change: This is after increasing new goes effective free cash flow interest in new afton to 81% for an upfront cash payment of 255 million financed with $100 million from a single airplane from our existing revolving credit facility and net proceeds from a concurrent equity financing.
Speaker Change: And the underground mine exploration from the entrepreneur zones continued as planned and the development 2 million zone is schedule for first ore from development in the second of 2024.
Speaker Change: The middle performed very well.
Speaker Change: Progressing over 26000 tons per the 12% increase compared to the Q2 of last year.
Speaker Change: We anticipate repaying the credit facility with free cash flow generated in the second half of 2024.
Speaker Change: We continued to operate above the gold mill throughput rate of 24700 tonnes per day.
Speaker Change: So mark we remain in a very healthy financial position.
Speaker Change: While continuing to invest in growth projects as.
Speaker Change: The right side of this slow at all times, our 2024 outlook as presented in February and our previously guidance between the first and the second half of the year. This information is still valid since month into the year.
Speaker Change: As we successfully executed on half one objectives. We have ended the sustaining period of free cash flow generation, and we are well positioned to leverage the higher metal price environment.
Speaker Change: Now I'll turn the call back to Pat to walk through our operating highlights.
<unk> Shah: And well positioned to meet our guidance production and cost objective for 2024.
Pat: Thanks Keith.
Pat: Starting to refer the river on slide nine.
<unk> Shah: We remain on track for second half production under representing approximately 60% of the funnel.
Pat: Rainy River continues to perform well achieving another quarter in line with our plan.
<unk> Shah: Our annual production.
<unk> Shah: Mostly due to the open pit mining sequence.
Speaker Change: On the mining front waste stripping was the photos during the quarter an increase of ASP loan from Q1.
<unk> Shah: We will continue to reclaim some lower grade stockpiled in jewelry, while we release higher grade ore in the open pit for later in the year.
Speaker Change: I'm pleased to mention that the open pit is an excellent position as we started the second half for the year.
Speaker Change: The servicer ratio is to decrease in the second half of the year as planned.
Speaker Change: Waste stripping is expected to decline through the remainder of the year as we access greater quantities of grid order.
<unk> Shah: Which result in higher operating costs and lower sustaining capital. However, no other impact on ASIC, which will trend lower in the second half of the year with the gold production.
Speaker Change: And the underground mining extraction from the entrepreneur zones continued outflows in the development 2 million zone is schedule for first ore from development and the signals of 2024.
<unk> Shah: Lateral development meters in the underground mine will continue to ramp up through the year as we access additional underground mining zone in more eddings become valuable.
Speaker Change: The middle performed very well.
Speaker Change: Progressing over 26000 Boes per day, a 12% increase compared to the Q2 of last year.
Speaker Change: Slide 10 outlines the progress we have made on the roads.
<unk> Shah: The underground means one remains on track for first oil from development in the second half of 2024.
Speaker Change: We continue to improve above the gold mill throughput rate of 24700 tonnes per day.
<unk> Shah: As previously mentioned the priority for 'twenty 'twenty four is to establish a primary ventilation circuit and excess multipolar mining zone.
Speaker Change: They are outside of the slowed outlines our 2024 outlook as presented in February and a previously guides that between the first and the circuit level for the year. This information is still valid since month into the year.
<unk> Shah: These two items will be key to ramping up mining rate to 5500 tonnes per day by 2027.
Speaker Change: Then well positioned to meet our guidance production and cost objectives for 2024.
<unk> Shah: The team at rainy River did an excellent job advancing underground lateral development.
<unk> Shah: Underground development continued to increase quarter over quarter and I expect this trend to continue into two into Q3 and Q4 as it is.
Speaker Change: We remain on track for second half production, representing approximately 60% of that.
Speaker Change: Our annual production.
Speaker Change: Mostly due to the open pit mining sequence.
<unk> Shah: It is open and initial underground mining equipment is delivered.
Speaker Change: We will continue to reclaim some lower grade stockpiled in jewelry, while we reduce our grid or in the open pit for later in the year.
<unk> Shah: There is more renewal of five meter diameter.
<unk> Shah: 420 meter long fresh areas come in in the second quarter.
Speaker Change: The strip ratio is to decrease in the signal out of the year as planned.
<unk> Shah: At the end of Q2, both the OEM is ventilation loop and they're fresher raise where approximately 50% complete in line with our plan.
Speaker Change: Which result in higher operating costs and lower sustaining capital however, northern impact on ASIC, which will trend lower in the second half of the year with the gold production.
<unk> Shah: In addition, I am pleased to report that the construction of the in pit portal offering a second muni fee growth and decrease waste hauling distance will commence in few days early August.
Speaker Change: Lateral development meters in the underground mine will continue to ramp up through the year as we access additional underground mining zone and the more <unk> become available.
Speaker Change: Turning now to new iPhone on slide 11.
Speaker Change: Slide 10 outlines the progress we have made on the roads.
Speaker Change: New Afton delivered to plan.
Speaker Change: Enrollment remains on track with first ore from development in the second half of 2024.
Speaker Change: We continued to deliver above industry on a tonnes per day and the seasonal ramp up as being going to plan, leading to a 34% increase in ton milled and a corresponding increase in gold and copper production compared to Q2 last year.
Speaker Change: As previously mentioned the priority for 'twenty 'twenty four is to establish a primary ventilation circuit.
Speaker Change: And excess multipolar mining zone.
Speaker Change: These two items will be key to ramping up mining rate to 5500 tonnes per day by 2027.
Speaker Change: The increased copper production is the primary driver of the reduced all in sustaining cost compared to the prior year period.
Speaker Change: The team is really river did an excellent job advancing underground lateral development.
Speaker Change: Looking now at the information on the right side of the slide.
Speaker Change: Similar to rainy River the first of all deliver according to plan and we are trending in line with the other roadblock.
Speaker Change: Underground development continued to increase quarter over quarter and I expect this trend to continue into two into Q3 and Q4.
Speaker Change: We continue to transition from <unk> to C zone, and expect to see a continued ramp up and Susan mining rigs throughout the year.
Speaker Change: So things open and Amazon underground mining equipment is delivered.
Speaker Change: There is worry over five meters diameter.
Speaker Change: We continue to expect the iron mill throughput in the second half to be partially offset by the lower feed grade due to the cave draw sequence lead into a fairly consistent quarterly gold and copper production profile.
Speaker Change: 120 meter long fresh areas come in in the second quarter.
Speaker Change: At the end of Q2, both the OEM is ventilation loop and they're fresher raise where approximately 50% complete in line with our plan.
Speaker Change: Flat.
Speaker Change: In addition, I am pleased to report that the construction of the <unk>.
Suzanne: Suzanne pro growth as shown on slide 12.
Speaker Change: Portal offering a second muni fee growth and decrease we're installing systems will commence in few days early August.
Speaker Change: Commissioning of the Gyratory Crusher and conveyor system is on track for the second half of this year.
Speaker Change: This will eliminate all the requirement and the impact positively unfolds going forward.
Speaker Change: Turning now to new Afton on slide 11.
Speaker Change: New often deliver to plan this.
Speaker Change: We are on schedule to complete the seasonal construction phase this year, which include the Susan K, reaching adroit at reviews and commissioning of the gyratory crusher and conveying system.
Speaker Change: Lateral development continued to advance unplanned with over 80% of the development meters now complete.
Speaker Change: Im really pleased with the progress the team has made and seize on development is no longer a critical path item for our seasonal and commissioning.
Speaker Change: These two milestones will be transformative for new afton, increasing production and decreasing cost to generate meaningful cash flow.
Speaker Change: Just to sum up.
Speaker Change: Operationally, we delivered our first of our stock.
Speaker Change: We will continue to deliver on our stated strategic goals.
Speaker Change: Fortunately don't move forward. These include delivering on production and cost guidance.
Speaker Change: We have now delivered eight consecutive quarters to plan.
Speaker Change: As I've said before same production technical excellence and operational discipline in our new roles keys to ensuring consistent quarter over quarter result.
Speaker Change: Commissioning of the Gyratory Crusher and conveyor system is on track for the second half of this year.
Speaker Change: Exploration continues to advance a bauxite and we'll share those results with you in the coming months.
Speaker Change: This will eliminate the hauling requirement and impact positively and costs going forward.
Speaker Change: We continue to focus on both extending our mine lives and it means probably new prospective targets to achieve our strategic objective of our certainly we're bullish on platform of approximately 600000 gold equivalent ounces per year.
Speaker Change: We are on schedule to complete the seasonal construction phase this year, which include the season <unk>, reaching an ROIC reviews, and commissioning of the gyratory crusher and conveying system.
Speaker Change: Lateral development continued to advance unplanned with over 80% of the development meters now complete.
Speaker Change: We deliver an accretive transaction for our shareholders by increasing our free cash flow interest and you ask them to 81%.
Speaker Change: I am really pleased with the progress the team has made and seize on development is no longer a critical path item for seasonal and commissioning.
Speaker Change: At New Afton, we will achieve commercial operations at <unk> and commissioning of the crusher and conveyor.
Speaker Change: At rainy River, we will establish a into this <unk> system and the second mean of <unk> growth, while continuing to preparing the mining inventory leading up to first oil from main zone development. This year.
Speaker Change: These two milestone will be transformative for new afton, increasing production and decreasing cost to generate meaningful cash flow.
Speaker Change: We exited the first half of the year free cash flow positive with the free cash flow inflection point behind us.
Speaker Change: Just to sum up operationally, we deliver our first of our stock.
Speaker Change: We will continue to deliver on our stated strategic goals.
Speaker Change: We have no enter our system cash generation period.
Speaker Change: Fortunately don't have forward. This includes delivering on production and cost guidance.
Speaker Change: This continued to be a transformative year for our company and our shareholders and we look forward to providing more positive updates on our third quarter call. Later this fall.
Speaker Change: We have now delivered eight consecutive quarters to plan.
Speaker Change: As I've said before same production technical excellence and operational discipline in our new roles keys to ensuring consistent quarter over quarter result.
Speaker Change: This completes our presentation and I will now turn it back to the operator for the Q&A portion of the call.
Speaker Change: Okay.
Speaker Change: Thank you and ladies and gentlemen, we will now begin the question and answer session. If you would.
Speaker Change: Exploration continues to advance on both side and we'll share those results with you in the coming months.
Speaker Change: To ask a question at this time she progressed with star followed by the number one on your telephone keypad.
Speaker Change: We continue to focus on both extending our mine lives and an inspiring new prospective targets to achieve our strategic objective.
Speaker Change: Their phone please speak up your handset before pressing Janney Keith did withdraw your question. Please press the star followed by the number of Q1 90.
Speaker Change: Certainly we're bullish on platform of approximately 600000 gold equivalent ounces per year.
Speaker Change: First question.
Speaker Change: We deliver an accretive transaction for our shareholders by increasing our free cash flow interest and you ask them to 81%.
Eric <unk>: And your first question comes from the line of Eric <unk> with no.
Speaker Change: With Scotiabank. Please go ahead.
Speaker Change: At New Afton, we will achieve commercial operation at <unk> and commissioning of the crusher and conveyor.
Eric: Hi, Patrick and team I appreciate you taking my question.
Speaker Change: At rainy River, we will establish a into this <unk> system and the second mean of egress, while continuing preparing the mining inventory leading us to first oil from main zone development. This year.
Speaker Change: Maybe just a.
Speaker Change: Quick question here on new Afton.
Speaker Change: Mining cost per tonne was down over Q1.
Speaker Change: Any additional commentary there in terms of onetime items that might have caused that or how are you thinking about the mining costs here throughout the year, obviously, you should sort of stabilize these lower levels as the cave ramps up.
Speaker Change: We exit the first half of the year free cash flow positive with the free cash flow inflection point behind us.
Speaker Change: We have now enter a certain cash generation period.
Speaker Change: Yes.
Speaker Change: This continued to be a transformative year for our company and our shareholders and we look forward to providing more positive updates on our third quarter call. Later this fall.
Speaker Change: Yes.
Speaker Change: As we continue to increase the throughput at new Afton with D&C is on or coming online.
Speaker Change: It will decrease our cost per tonne.
Speaker Change: This completes our presentation and I will now turn it back to the operator for the Q&A portion of the call.
Speaker Change: A lot of fixed cost at new Afton.
Speaker Change: Well leverage that increased here, but so as we continue to increase throughput that that cost per camera per unit of that.
Speaker Change: Thank you and ladies and gentlemen, we will now begin the question Sean I'll answer it.
Speaker Change: If you would like to ask a question at this time.
Speaker Change: Okay, great. Thank you very much and just turning to rainy river for a moment, obviously and the shutdown last week.
Speaker Change: Star followed by the Green line on your telephone keypad.
Speaker Change: Their phone please pick up your handset before pressing any key withdraw your question. Please press the star followed by the number of Q1.
Speaker Change: My condolences.
Speaker Change: On the fatality there.
Speaker Change: Any sort of broader read through we should think in terms of pit stability or any other issues in the open pit at rainy.
Speaker Change: This is for you.
Speaker Change: First question.
Eric Winmill: And your first question comes from the line of Eric <unk> with no.
Speaker Change: Yeah. Thanks for your question so.
Eric Winmill: With Scotiabank. Please go ahead.
Speaker Change: Yes, it was not an easy week for us.
Eric Winmill: Hi, Patrick and team I appreciate you taking my question maybe.
Speaker Change: And then I know, it's nothing compared to the refinery, but this remains an ongoing investigation and in respect of the process.
Speaker Change: Maybe just a.
Speaker Change: Quick question here on new Afton.
Speaker Change: All of them.
Speaker Change: Cost per tonne was down over Q1.
Speaker Change: Go into the specific details of the incident, so what I can confirm to you <unk>.
Speaker Change: Any additional commentary there in terms of one time items that might have caused that or how are you thinking about the mining costs here throughout the year, obviously, you should sort of stabilize these lower levels as the <unk> ramps up.
Speaker Change: It's not related to pit slope.
Speaker Change: So it wasn't related incident with a piece of equipment. So it was the equipment that was loading approach. So we have noticed annuity concern <unk> technical issues or not in regards to India.
Speaker Change: Yes.
Speaker Change: And yes.
Speaker Change: The infrastructure of the payable or whatever so.
Speaker Change: If I can the ring fence the incident, it's related to the operation of the new equipment.
Speaker Change: Alright, Thank you very much for that.
Speaker Change: On an easy situation.
Speaker Change: And then so obviously.
Speaker Change: You know a week of downtime is that.
Speaker Change: What we should expect here.
Speaker Change: Legacy operations have resumed more or less.
Speaker Change: So, but we are first we.
Speaker Change: We started the operation when the incident up in the morning of last Wednesday.
Speaker Change: So and we restart on Saturday, so basically we stopped.
Speaker Change: Let's talk mostly over three days.
Speaker Change: And so as we ramp up vessels smooth.
Speaker Change: Smoothly on the Saturday or the operations, so, but we are on track to deliver guidance. So most of the year three or four days is the range that we can absorb.
Speaker Change: To deliver in the range of our guidance for 2024, So we're not we're not impacted for this.
Speaker Change: We just took.
Speaker Change: The appropriate time to two.
Speaker Change: To do the first I will say the together the data for the investigation.
Speaker Change: And.
Speaker Change: It will be.
Speaker Change: So we always doing an investigation and in something like this or no matter. The incident that we are facing in auto that we're doing in other words. So it was important for US together all the data we collaborate with the minister of mines, the Chief Inspector and also we are and we are doing the investigation in partnership with our with our employees and of our team.
Speaker Change: And then so obviously a sort of a week of downtime is that what we should expect here and I guess the operations have resumed more or less.
Speaker Change: So in the time together August two sorted out and to care for the <unk>.
Speaker Change: We started the operation with our people. So we mostly have lost three days, but I'm not seeing that as a licensing that is a careful my colleague.
Speaker Change: Yes, but we first we are.
Speaker Change: We started the operation when the incident up in the morning.
Speaker Change: Wednesday.
Speaker Change: So absolutely no I really appreciate the added.
Speaker Change: So and we start on Saturday, so basically we stopped.
Speaker Change: Commentary. Thank you very much I'll hop back in the queue.
Speaker Change: Let's talk mostly over three days.
Speaker Change: And we are so when we ramp up.
Speaker Change: And your next question comes from the line of Anita Soni with CIBC World markets. Please go ahead.
Speaker Change: Smoothly on the Saturday the operation So, but we are on track to deliver guidance. So most of the three or four days is the range that we can absorb.
Speaker Change: To deliver in the range of our guidance for 2024, So we're not we're not impacted for this.
Anita Soni: Thanks Arnie.
Speaker Change: We just took.
Speaker Change: The appropriate time to two.
Arnie: As we began here any more questions.
Speaker Change: To do the first I will say the gather data for the investigation.
Arnie: <unk>.
Arnie: Yeah.
Speaker Change: Keeping yourself on mute okay.
Speaker Change: And.
Speaker Change: Very good.
Speaker Change: Sorry about that.
Speaker Change: <unk>.
Speaker Change: Firstly my condolences on the loss of life.
Speaker Change: And so we are always doing an investigation and it's something that like this one no matter. The incident that we are facing and until that we're doing in other ways. So it was important for US together all the data we collaborate with the minister of mine the Chief Inspector and also we are and we are doing the investigation in partnership with our with our employees and of our team.
Speaker Change: Often sorry at rainy River and then my question.
Speaker Change: I'll start with the Capex at new Afton. It seems that you are a little understanding there relative to the guide that.
Speaker Change: As a result of cost savings or are you just.
Speaker Change: A little bit behind on Lucerne will that catch up in the back half of the year I think.
Speaker Change: So in the time together all this sorted out and to care for the family to care also to restart the operation with our people. So we mostly have lost three days, but I'm not seeing that as a licensing that is a cure for my colleague.
Speaker Change: The guide was more like 130 to $1 45 for growth capital and you guys are.
Speaker Change: The average memorial sub 120, so far.
Speaker Change: So it's mainly related to two and so good morning, and it was mainly related to two items. So the first are those where we have a bit of.
Speaker Change: Absolutely and I really appreciate the added commentary. Thank you very much I'll hop back in the queue.
Speaker Change: They offset the quarter to quarter for the delivery of the equipment for the extraction zone and the reality of the crushers silver.
Speaker Change: Having an impact on our operation as we are using the previous equipment territory, so equipment delivery and the other one the other item is mislead because we are.
Speaker Change: And your next question comes from the line of Anita Soni with CIBC World markets. Please go ahead.
Speaker Change: We are proud of the fact that.
Speaker Change: The one with the team here are working very hard to optimize that asset values. So the so we invest a lot of time and effort to optimize the development, we are performing better on development.
Anita Soni: Thanks Arnie.
Anita Soni: Hi, Judy we can hear any my question may be on mute.
Speaker Change: So and we delayed some openings for next year, so a slight adjustment because it's only this is good with good management and the planning of the development on the timely matter redo the number of contractors to increasing and decreasing our cost and improving our productivity. So this is mainly the reason why.
Anita Soni: Yeah.
Anita Soni: So keeping yourself on mute.
Judy: Sorry about that.
Speaker Change: Firstly my condolences on the loss of life.
Speaker Change: New Afton rainy River.
Speaker Change: And then my question.
Speaker Change: Start with the Capex at new Afton, It seems that you're a little under spending narrow relative to the guide that.
Speaker Change: We are on the consumer and a customer point of view and the Capex more of you.
Speaker Change: As a result of cost savings or are you just a.
Speaker Change: <unk> delayed, but we will deliver we will have to spend this money in a timely manner.
Speaker Change: A little bit behind on the spending will that catch up in the back half of the year I think.
Speaker Change: Okay, so from a quarter to quarter to quarter to our core loan or quarter, but we know with snap et cetera, it's not an extra expense is just.
Speaker Change: Right.
Speaker Change: More like 130 to $1 45 for growth capital and you guys are kind of average moral sub one 'twenty shopper.
Speaker Change: Not an underperformance, it's it's a great performance.
Speaker Change: So it's mainly related to two so good morning, and it does really related to two items. So the first items, where did we have a bit of let's say offset that quarter to quarter for the delivery of the equipment for the extraction zone and the reality of the crushers silver.
Speaker Change: Okay, so a little bit of it.
Speaker Change: Better unit cost optimization, and a little bit of deferral and a little bit of catch up spending in the back half.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Alright, and then that absolutely. Thank you my next question both of the.
Speaker Change: Both new Afton and rainy river outperform not just on the mining cockpit on all of the unit cost is that.
Speaker Change: Any impact on our operation as we are using the previous equipment territories or equipment delivery and the other one the other item is mislead because we are very proud of the fact that the.
Speaker Change #105: Was that something that was just a one time thing or is that better.
Speaker Change: Optimization on behalf on Johan and his team.
Speaker Change: Yes, I think first I can say to you that we are.
Speaker Change: The one with the team here are working very hard to optimize that asset values. So the so we invest a lot of time and effort to optimize the development, we are performing better on development.
Speaker Change: Because you want it really is is that when you reverse this is why I'm thinking as part of the call.
Speaker Change: He is taking care of our colleagues there, but is really really proud of this achievement that rainy river because.
Speaker Change: And so and we delayed some openings for next year, so a slight adjustment because it's only this is good with good management and the planning of the development on the timely matter.
Speaker Change: On the total cost point of view, we mined more ton for less money. So we are we are at a point that we optimize the open pit. We are we fully maximize the fact that we are not using the word dumped anymore. Because we are doing in pit dumping pollo waste reduce haulage distance.
Speaker Change: The number of contractors, increasing and decreasing our costs and improving our productivity. So this mainly the two reason why we are on a constant and a customer point of view and a capex point of view.
Speaker Change: <unk> drilling in the blood things. So we have a new mine manager in place that is employees collaborate is a big part with his team.
Speaker Change: Currently a delay, but we will tell you we will have to spend this money in a timely manner.
Joseph Zhou: Okay, Joseph Zhou from quarter to quarter to quarter to acquire another quarter, but it's not it's not a it's not an extra expense is just it's not an underperformance, it's and it's a great performance.
Speaker Change: The big part of this success to date.
Speaker Change: But we improved drastically the productivity in the pit so we mined more tonnes for less money. So we are really pleased by this really please.
Speaker Change: Okay, so a little bit of.
Speaker Change: And.
Speaker Change: And before for rainy River, New Afton as I said to you, we managed really well our performance.
Speaker Change: And better unit cost optimization, a little bit of deferral and a little bit of catch up spend in the back half.
Speaker Change: Yes.
Speaker Change: So we are pushing really hard to deliver our crushing in the material and Lindbergh in advance. So we are in advance I surely on the schedule and the data that will started up it will reduce hours will reduce our opex because we will eliminate all the trucking because we're trucking up all of the material from C zone to the mineral fiber.
Speaker Change: Alright, and then that actually would make you. My next question both of the.
Speaker Change: Both new Afton and rainy River at performed not just on the mining cockpit on all of the unit cost is that.
Speaker Change: Was that something that was just a one time thing or is that better.
Speaker Change: Optimization on behalf of the Johan and his team.
Speaker Change: Yeah, I think first I can say to you that we are.
Speaker Change: So we know how to do that anymore. So in terms of manpower.
Speaker Change: Because you want it really is is that when you reverse this is why I'm I'm I'm thinking as part of the call is taking care of our colleagues there but is really is really proud of this achievement that rainy river because.
Speaker Change: <unk> equipment maintenance of the equipment it will be.
Speaker Change: The Missouri game for Us.
Speaker Change #108: Alright, and Thats. It for my question, congratulations on achieving a positive free cash flow.
Speaker Change #104: Ill get back into queue. Thank you.
Speaker Change #101: Thank you.
Speaker Change: On a total cost point of view, we mined more ton for less money. So we are we we are at a point that we optimize the open pit. We are we fully maximize the fact that we are not using the waves dumped anymore. Because we are doing and the dumping for waste reduce haulage distance optimize the drilling and the black thing. So we have a new mine manager in place.
Speaker Change: And your next question comes from the line of Jamie Hawaii with Canaccord. Please go ahead.
Speaker Change: Alright.
Jamie Hawaii: Thanks for taking my question condolences for your colleague at rainy River.
Speaker Change: I think I'll touch on the ramp up new asking.
caliber: That is in Peru is caliber is a big part with his team.
Speaker Change: When we were there back in May.
caliber: The big part of this success to the team.
caliber: But we improved drastically the productivity in the pit so we mined more tonnes for less money. So we are really pleased by this very please.
Speaker Change #102: The progress of the project, which is going quite well I think you had four draw bells completed and where we're looking to complete at a rate of about four per months, so with hydraulic radius being 18, we're looking at achieving that potentially.
Speaker Change: And.
Speaker Change #107: August or September I believe.
Speaker Change: Could you guys give a bit more detail on.
Speaker Change: When do you expect to achieve acres, because things seem to be moving at a quite a good pace.
Speaker Change: Yes so.
Speaker Change: For the reducer.
Speaker Change #100: Actually on the on the <unk>, because we have experience with <unk> is the fourth one.
Speaker Change: In theory, we need to achieve to have 18 draw bells.
Speaker Change: Theyre loving and function to reach these are the creators.
Speaker Change: And lastly, we're trending toward the beginning of Q4, so we're doing well in that we are still trending throughout duty drawback for yearend.
Speaker Change: So as we discussed and we are on plan so were trending.
Speaker Change: You can start the cave by itself out with 17. It can start with 21. So it's not a it's not an exact science, but actually we're trending toward the beginning of Q4, so really pleased by this because.
Speaker Change: And also for the conveyor system.
Speaker Change: The crusher.
Speaker Change: I think that we present, some a picture of the year.
Speaker Change: We're fixing the bottom part of the Observatory Crusher, a picture about so actually of mental and the spider or probably in place.
Speaker Change: So it's worth looking more so were mostly.
Speaker Change: Look at the end of Q4, we're looking at the Q4, so it's a it's where it's excellent for us doing well.
Speaker Change: Okay. That's that's great to hear and my next question was going to be on the conveyor and the.
Speaker Change: Crusher, so I appreciate the detail there as well.
Speaker Change: Is it for me.
Speaker Change #110: So we are installing the allowance build this week, so business EDA printers in place under them.
Speaker Change: With me on the on the <unk>.
Speaker Change: Because we have experience with black.
Speaker Change: If you look at the fourth one.
Speaker Change: In theory, we need to achieve to have 18 draw bells.
Speaker Change: I think that we will quality sorted out shortly so the next item on thermal infrastructure and controlling the cultural of infrastructure will be the crushers. So it won't be the focus.
Speaker Change: Developing and function to reach these are accretive.
Speaker Change: And lastly, we're trending toward the beginning of Q4, so we're doing well in that we are still trending to actually draw bell for year end.
Speaker Change: From the following weeks up to the mid November so we already are well positioned and that goes into the good job. You did also a safe job. So so it was well there with them on Sunday and nothing to you that's.
Speaker Change: And so as we discussed and we are on plan so were trending.
Speaker Change: You can start the cave by itself at our 2017. It can start with 21. So it's not a it's not an exact science, but actually we're trending toward the beginning of Q4, so really pleased by this because.
Speaker Change: Perfect.
Speaker Change: Oh, great. Thanks for the additional color.
Speaker Change: And your next question comes from the line of Mike Parkin with Barclays.
Speaker Change: And also for the conveyor system and.
Speaker Change: Please go ahead.
Speaker Change: The crusher.
Speaker Change: So I think that we present, some a picture of the.
Mike Parkin: Hi, guys. All my questions have been answered so thank you.
Speaker Change: We're fixing the bottom part of the Observatory Crusher, a picture of that so actually is mental and despite her or probably in place.
Speaker Change #103: Thank you <unk>.
Speaker Change #103: And there are no further questions at this time I'd like to turn it back to Ankur Shah for closing remarks.
Speaker Change: So it's worth looking more so were mostly.
Speaker Change: Look at the end of Q4, we're looking at the Q4, so it's excellent for us doing well.
Ankur Shah: Thank you, Larry and to everyone, who joined US today. Thanks again as always should you have any additional questions. Please do not hesitate to reach out to us by phone or email have a great rest of your summer.
Speaker Change: Okay, that's great to hear and my next question was going to be on the conveyor and the.
Speaker Change: Thank you presenters, ladies and gentlemen. This concludes today's conference call. Thank you all for participating you may now disconnect.
Speaker Change: Crusher, so I appreciate the detail there as well.
Speaker Change: It for me.
Speaker Change: So we are installing the allowance build this week, so basically the apprentice in place under them. So I think it's we will quality solid out shortly so the next item on terms of infrastructure and controls the concern of infrastructure will be the crushers. So it won't be the focus.
Speaker Change: From the following weeks up to the mid November so we already have well positioned the guys did a good job with it also a safe job. So so I was there with them on Sunday and nothing to add.
Speaker Change: That's perfect.
Speaker Change: Oh, great. Thanks for the additional color.
Speaker Change: Your next question comes from the line of Mike Parkin with.
Speaker Change: Please go ahead.
Michael Parkin: Hi, guys all of my questions have been answered so thank you.
Speaker Change: Thank you Mike.
Speaker Change: And there are no further questions at this time I'd like to turn it back to you and get Shah for closing remarks.
Shah: Thank you, Larry and to everyone, who joined US today. Thanks again as always should you have any additional questions. Please do not hesitate to reach out to us by phone or email.
Speaker Change: Rest of your summer.
Speaker Change: Thank you presenters, ladies and gentlemen. This concludes today's conference call. Thank you all for.
Speaker Change: For participating you may now disconnect.
Speaker Change: [music].