Q3 2024 New Gold Inc Earnings Call
Speaker Change: [music].
Yeah.
Sylvie: Good morning, My name is Sylvie and I will be your conference operator today, we'll come to the new Gold's third quarter 2024 earnings Conference call. Please note that 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.
Sylvie: 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.
Sylvie: I would like to withdraw your question. Please press Star then the number two.
Speaker Change: I'd now like to hand, the conference over to Anne Kitchell Executive Vice President of strategy and business development. Thank you.
Anne Kitchell: Thank you Sylvie and good morning, everyone. We appreciate you joining us today for new Gold's third quarter 2024 earnings conference call and webcast.
Speaker Change: On the line today, we have Patrick <unk>, President and CEO and Bouchard, our CLO and Keith Murphy our CFO.
Speaker Change: In addition, we also have Luke Buchanan, Vice President Technical services and John for instead of a rather now vice president of geology available to assess during the Q&A portion of the call should you wish to follow along the webcast. Please sign in from our homepage at Nucor Dot com.
Speaker Change: Before the team begins the presentation I'd 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: Caution that actual results and future events could differ materially from those expressed or implied in forward looking statements.
Speaker Change: 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 available on SEDAR, plus which set out certain material factors that could cause actual results to differ.
Speaker Change: In addition, 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 its bad for some opening remarks.
Speaker Change: Thank you.
Speaker Change: Good morning, everyone.
Speaker Change: We got a lot of substance in the third quarter.
We have also some difficult moments.
Speaker Change: I think this unfortunately due to come on the team not just for the air conditioning.
Speaker Change: But also for all the response.
Speaker Change: And support each other.
Speaker Change: As a result of the company's worth obviously, and we look forward with them.
Speaker Change: Our operations delivered our strongest production quarter of the year to date.
Speaker Change: 40% increase in production over the second quarter.
Speaker Change: George and for some decrease in all in such and Trust.
Speaker Change: Rainy River delivered an impressive 29% reduction in all in sustaining costs compared to the second quarter.
Speaker Change: The strong cost performance allowed us to leverage the higher metal price environment.
Speaker Change: Adult you had an excellent quarter financially with multiple records achieved.
Speaker Change: Highlighted by record quarterly free cash flow generation of 57 million.
Speaker Change: Yesterday evening, we also provide an update on our key growth projects.
Speaker Change: I am pleased to report that new Gold zone has achieved commercial production.
Speaker Change: And the jury crusher and conveyor system in Pershing.
Speaker Change: Well ahead of schedule.
Speaker Change: The importance of these milestones cannot be overstated and without a direct.
Speaker Change: And positive impact on production costs.
Speaker Change: Cost and cash flow.
Speaker Change: Rainy River also achieved first is up I was born from the underground zone.
Speaker Change: Although the ore tonnage from underground made will stay relatively low until we come in stoping next year.
The achievement Mark a key milestone in our planning to preferred in the underground mine and the ramp up production of higher grade underground ore.
Speaker Change: We also realized both realized positive exploration results at both operations during the third quarter.
Speaker Change: At new Afton.
Speaker Change: Yeah, I agree the eastern sector of the mine continues to grow.
Speaker Change: One thing resolved with PS zone and Ingalls.
Speaker Change: And that's really river.
Speaker Change: Our first major exploration programs in 2017.
We are already seeing positive result, extending open pit and underground with organization.
Speaker Change: With that I will turn the call over to Keith.
Keith Murphy: Thank you Pat.
Keith Murphy: On slide six which has our operating highlights.
Keith Murphy: As Pat mentioned Q3 delivered the highest production and lowest cost of the year.
Keith Murphy: Production totaled approximately 78400 gold ounces and $12 6 million pounds of copper.
Keith Murphy: Each representing a 14% increase in gold production compared to the second quarter driven by higher feed grades at rainy River.
Keith Murphy: Consolidated all in sustaining costs for the quarter for $1195 per gold ounce in line with our plan.
Keith Murphy: This is a decrease of 13% over the second quarter.
Keith Murphy: This is highlighted by strong cost performance at both operations at rainy River continuing to decrease its all in sustaining cost at new Afton, achieving an all in sustaining cost of negative $408 per ounce after considering the copper credits.
Keith Murphy: We expect the increasing production and decreasing cost trends to continue into the fourth quarter, mostly as a result of higher production at rainy River and lower costs at new Afton.
Our total capital expenditures for the quarter were approximately 63 million with 20 million spent on sustaining capital and $43 million on growth capital.
Keith Murphy: At rainy River sustaining capital is primarily related to capitalized waste capital components, and tailings management and construction sustaining capital is trending lower than guidance as a lower proportion of waste tonnes are capitalized at a higher proportion remains an operating costs, but with no net impact on all in sustaining costs.
Keith Murphy: Growth capital is related to underground development as the underground main dumped continues to advance.
Keith Murphy: New asking sustaining capital is primarily related to tailings management and stabilization activities.
Keith Murphy: Growth capital is primarily related to fees on underground development and is tracking to the low end of the guidance range due to efficient capital management and early commissioning of the crushing conveyor system.
Keith Murphy: Turning to our financial results on slide seven.
Keith Murphy: Third quarter revenue was $252 million, which is a quarterly record.
Keith Murphy: Q3 revenue was higher than prior year quarter, primarily due to higher metal prices and higher gold sales.
Offset by lower copper production.
Keith Murphy: Cash generated from operations before working capital adjustments was $120 million.
Keith Murphy: <unk> per share for the quarter.
Keith Murphy: Other than the prior year period, primarily due to higher revenues.
Keith Murphy: <unk> generated record free cash flow of $57 million due to higher revenue and lower capital expenditures.
Keith Murphy: Yeah.
The company recorded net earnings of approximate $38 million five per share during Q3 and increased due to higher revenues.
Keith Murphy: Earnings were also impacted by lower depreciation than originally planned due to the lower accounting asset base, resulting from the deemed disposition of assets that we are asking when accounting for the otp P buyback in <unk>.
May of this year.
Keith Murphy: After adjusting for certain charges net earnings were <unk> 60, adjusted net earnings was $64 million or <unk> <unk> per share in Q3, a significant increase compared to adjusted net earnings of $23 million in the third quarter of 2023.
Keith Murphy: Our Q3 adjusted earnings includes adjustments related to other gains and losses.
Keith Murphy: At the end of Q3, we had cash on hand of $133 million and liquidity the liquidity position of $459 million.
Keith Murphy: This is after the company made a payment of $43 million to the Ontario Teachers' pension plan as part of the minimum cash guarantee under the terms of the original 2020 agreements and also repaid 50 million of that $100 million drawn on its credit facility to fund the payment of attendee amending agreement with Ontario teachers, which was entered into in May.
Keith Murphy: And subsequent to the quarter end, we paid an additional $20 million on our credit facility, leaving a balance of $30 million outstanding, which we expect to pay off by the end of the year.
Keith Murphy: To sum up we remain in a very healthy financial position.
Now I'll turn the call over to Johan to walk through our operating highlights.
Johan: Thanks Keith.
Johan: Starting between waiver on slide nine gold production in the third quarter was slightly below 78400 ounces. Although it was the operating operations strongest quarter. So far this year, we were slightly behind plan at the end of September and we're expecting full year gold production to be about 15000 ounces below the original guidance range.
Johan: There's two main reasons first as discussed on our second quarter call operation were impacted by a voluntary suspension follow a fatality in July.
Johan: And the progressive return to full production.
Johan: Both the front end loader or temporary removed from the fleet additional seek to device were installed on one of the units and the senior debt to return to production only a few days ago.
Johan: And loading unit is still waiting for parts and not with every function on that Sean.
Johan: Okay.
Johan: Second we are left high grade ore on debentures in the open pit.
I'm rich pocket.
Johan: I am great or on the $1 60, and 150 benches, where lower tonnes.
Johan: Tonnage than originally expected.
Johan: Although the impact of the volume was relatively small the reduction in high grade mill feed impacted gold production.
Johan: Going forward the team as we view the occurrence of iron grade blocks, considering additional greater control data and we start with the conservation leading to an adjustment of a small.
Johan: Fantastic.
Johan: <unk> block to mitigate risk.
Johan: I am confident in the open pit mine plan for the last quarter of this year.
Johan: Our 2025 and 2026 production outlook remain unchanged.
Johan: Despite the low the lower gold production. The team has done an excellent job to control costs. The third quarter. All in sustaining cost is about 29%. So were in the previous quarter at $1327 per ounce on a byproduct basis.
Johan: With the fourth quarter expected to be.
Johan: Our lowest cost quarter of the year, we are trending to the top end of that guidance range for the full year.
Johan: Turning to slide 10.
Johan: The rainy River also complete some significant project milestone in the underground mine during the third quarter as you know with the underground mine is divided into two main sectors and corrected which has been in production since 2022 and the much larger underground named sector.
Johan: Which we're currently developing.
Johan: In Q3 raised borrowing under the main fresh air raised and the second portal located in the east wall of the pit work completed.
Johan: Second portal will provide a second means of egress and improve installation for underground mine.
Johan: It will also significantly reduce the underground all its defenses.
Johan: The operation also achieve first ore development underground mine ahead of schedule.
Johan: Although the <unk> tonnage is still quite small it marks a significant milestone in our plan to prepare the underground mineral sector for stoping in the first half of next year.
Johan: And the ramp up to about 5500 tonnes per day by 2027.
Johan: Turning now to new Afton on slide 11.
Johan: You asked one deliver another strong operating quarter <unk> continued to deliver to plan with fees on the ramping up well leading to a 31% increase in ton milled over the third quarter last year.
Johan: Offset by the planned lower gold and copper grade from <unk>.
Johan: All in sustaining cost decrease and the big key compared to the prior year period.
Johan: Then by lower operating expenses lower sustaining capital spend.
Johan: Byproduct revenue.
Johan: The first nine months at new Afton deliver according to plan and we're trending favorably with the annual plan. We continue to transition from the <unk> to C zone and expect to see a continued ramp up in C zone mining rate throughout the year.
Johan: We expect mill throughput to continue increasing in the fourth quarter, partially offset by lower feed grade due to the cave draw sequence, leading to a fairly consistent quarterly gold and copper production profile as planned.
Speaker Change: I think the Wang with new Afton on slide 12.
Speaker Change: C zone commercial production and commissioning of the Gyratory Crusher and counter system is completed two months ahead of schedule and on budget.
Speaker Change: With the <unk> and linked system now fully operational.
Truck haulage is eliminated from Q zone, removing products unconstrained and.
Speaker Change: And resulting in significant cost reduction going forward.
Speaker Change: We also completed a total of 18 a draw bells as of mid October achieving hydraulic radius and commercial production in the C zone.
Speaker Change: These two milestone are transformative for new afton, increasing production and decreasing cost to generate meaningful cash flow.
Speaker Change: I would like to I would like.
Speaker Change: To provide an update on some of the technical study that we're working on to unlock additional value at rainy River and new Afton. Following the positive exploration results from both operation.
Speaker Change: At rainy river after adding phase III to mineral reserves at the end of last year, we extended the open pit mine life by approximately one year and defer reclaiming of the low grade stockpile.
Speaker Change: Based on the near surface.
Speaker Change: The near surface exploration results this year and considering a high gold price. We're now looking at leveraging the existing mill capacity and open pit mining fleet to further extend the open pit mine life, while keeping capital investment to a minimum.
Speaker Change: While still in the early stages, we have identified potential opportunities to add an additional push you back to the main pit and potential potentially some smaller satellite pits.
You ask them the company continued to optimize two zone with the potential to increase mineral reserves at no additional capital expenditure. The team is also advancing the east extension technical study with the objective of adding a new high grade zone to the east side to the to the east of C zone.
Speaker Change: These excellent expansion has the potential to improve the new afton copper and gold production profile and also to unlock otter I grade zone in the eastern section of the mine, including K zone and hanging wall zone.
Speaker Change: In terms of news flow the first quarter of 2025 will be active for the company.
Speaker Change: The company will report year end 2020 for mineral reserve and new Neurology resources in February 2025.
Speaker Change: Our three year operational outlook will also be provided in February supported by an investor and analyst technical session.
Speaker Change: And the technical information for both operation will be provided in updated Ni 43, 101 Technical report in the first quarter of 2025.
Speaker Change: With that I will hand over the presentation to Pat for closing remarks.
Pat: Thanks Ewen.
Pat: Slide 15 summarizes our 2020 outlook.
Pat: For the full year, we expect consolidated gold production was slightly below.
Pat: Good.
Pat: We present at <unk>.
Pat: Part of this year.
Pat: While production is expected to be thoughtful.
Pat: Strange.
Pat: <unk> is expected to be below the guidance range due to the reason that we outlined earlier.
Pat: Although gold production was slightly lower than plan all audio consolidated operational metrics are in line.
Or better than target.
Pat: Copper production is on track to be at the midpoint of the guidance range.
Pat: Consolidated all in sustaining costs are trending to the low end of the guidance rich.
Pat: This is a testament.
Pat: So the team operational discipline and capital management.
Pat: Sustaining capital is striking below the low end of the guidance range on the growth capital into striking to the low end of the guidance range.
Pat: The result of early termination of the mineral handling system.
Alaska.
Pat: Before handing over for questions.
I'd summarize some of new Gold's vehicle Krishnan.
Pat: Nine months into the year and that you have already successfully delivered the majority of our suite of strategies or goals.
Pat: Highlights for me as being the cost performance of our operations.
Pat: We are buying later throughout this presentation.
Pat: By achieving our cost targets.
Pat: However, with a slightly lower gold production Youll versions are realizing increasing margin with VR and with oil prices.
Pat: The increasing margins together with production growth and declining capital spending over the guidance.
Pat: Lawyers.
Pat: Jeff.
Jeff: As previously reported we achieve our free cash.
Jeff: Excellent production volume Q2, slightly ahead of schedule and we have just achieved a record quarterly free cash flow for the company.
Jeff: Another key accomplishment was the successful completion of key projects.
Jeff: For our new goals from you often see zone rainy river's underground mining project continuing downgrades.
Jeff: The team consistently delivers project on schedule.
Jeff: And on budget.
Jeff: Project execution is now one of <unk> biggest strengths.
Jeff: With the operation running well and project advancing as planned the company has included Persian program. This year.
Jeff: In Q3, we report positive results at both operations.
Jeff: We expect to be reflected in our year end reserves and resources base.
Jeff: And finally.
Jeff: We reduced Ontario teachers feature our short interest at new Afton from 46% rather than 20% in Q2.
Jeff: Anything meaningful shareholder value and increasing our exposure to a high quality operation with significant exploration upside.
Jeff: This concludes our presentation. So I will now turn it back to the operator for the Q&A portion of the call.
Speaker Change: Thank you Sir.
Speaker Change: Ladies and gentlemen, as stated earlier, if you would like to ask a question. Please press star followed by one on your Touchtone phone you will then hear a prompt that Johan has been raised and if she said with declines from the polling process. Please press star followed by two.
Speaker Change: And also note that if you're using a speakerphone you will need to lift the handset first before pressing entities. Please go ahead and press star one now if you have any questions.
Speaker Change: And your first question will be from Mike Parkin of National Bank. Please go ahead.
Mike Parkin: Thanks, guys for taking my questions if I'm looking at slide 13.
Mike Parkin: The aerial view of your open pit.
Mike Parkin: Just to be clear you had some issues in the past with grade reconciliation, if I remember correctly that was in the north lobe.
But is that not completely done and behind you and if I'm.
Mike Parkin: Looking at it in the right orientation that is the right side of the picture, where youre actually back filling that so that.
Mike Parkin: What seems to be a temporary issue is not in the problematic area of the path that done and behind you completely am I correct on that.
Speaker Change: Hi, Mike.
Mike Parkin: I can answer your question.
Speaker Change: No. This is nothing that large job.
Mike Parkin: Sorry.
Mike Parkin: Hey.
Mike Parkin: As you know excited about three years ago.
Mike Parkin: And during that period and fixed as well.
Mike Parkin: Well.
Mike Parkin: Wed like we seen any mine on a monthly basis.
Speaker Change: We see some positive and negative variance, but overall, yes Alan.
Speaker Change: And like John mentioned earlier on two benches, we have pockets of high grade ore that were lower than expected.
Speaker Change: Going forward is on the.
Speaker Change: A few of the laboratory lots remaining in Oregon.
Speaker Change: So we've applied a captain on those and any blocks to improve mine planning.
Speaker Change: We don't believe it will have an impact on our 2025.
Speaker Change: The document.
Speaker Change: Okay, that's great.
Speaker Change: And then that new App and can you just give us a bit more color like you've got the underground crusher online conveyor.
Speaker Change: Can you just give us a bit more color of how and when that has kind of come on in.
Speaker Change: What kind of tonnage rates you're tracking at.
Speaker Change: But like I say the month of October because that was kind of from what I understood from the sites, where last year. It was kind of a key deliverable unlocking.
Speaker Change: Tonnage, which is up quite a bit quarter over quarter, but we should ask.
Speaker Change: How soon do you expect to be able to bring that mill up to full capacity now that youre really kind of unlocking the potential teaser on what well both.
Speaker Change: Both the.
Speaker Change: The conveyor system and crusher, but I guess also the hydraulic radius being achieved.
Speaker Change: Do you expect that to be.
Speaker Change: Several quarters or could we actually see that achieved.
Speaker Change: Relatively early into 2025.
Speaker Change: So.
Speaker Change: Thank you Mark <unk> speaking so the first part of it.
Speaker Change: Screen, we will accelerate <unk>. So I think it's one thing.
Speaker Change: That's right and that we have.
Speaker Change: We're able to start the conveyor and crushing system.
Speaker Change: And if anything all the trucking that we're coming up to around two discharge of the mineral fiber closer between so it's a huge growth for us.
Speaker Change: With these equipments were interacting with the loveland actively using concentrating activities. So it will it will be it will improve the <unk>.
Speaker Change: The efficiencies are all of them working going forwards.
Speaker Change: You won't see that.
Speaker Change: In the short term.
Speaker Change: So I have two.
Speaker Change: So blockchain is about <unk>, so the base of the Lockheed with Celgene.
Speaker Change: Sure.
Speaker Change: Short term gain for longer right.
Speaker Change: So we have a good sequence that we presented in the outlook.
Speaker Change: So if you look at the project the depletion drove omidria.
Speaker Change: If we go through the trove of seasonal.
Speaker Change: In the outlook. So it wasn't that minions will accelerate mitre and will also.
Speaker Change: The C zone will show up more in the second part of the year.
Speaker Change: Basically we respect a and in Boston This progressive ramp up will go to 14500 tonnes per day in December 2025.
Speaker Change: Okay.
Speaker Change: And is there any major shutdowns that we should be thinking about for either Q4 Q1 of next year.
No.
Speaker Change: Youre talking about new <unk>.
Speaker Change: We either one.
Speaker Change: No nothing that is exceptional so we outgrew delusional vulnerable site to do the amendments that we are planning our mining sequence and you know we're bullish on profiling nothing exceptional model going forward.
Speaker Change: Great. Thanks, very much that's it for me thank.
Speaker Change: Thank you.
Speaker Change: Thank you next question will be from Eric Windmill at Scotia Bank. Please go ahead.
Eric Windmill: Great Good morning, Patrick and team. Thanks for taking my question nice to see the results this quarter.
Eric Windmill: Maybe just quickly on the guidance for the balance of this year, obviously production is down a bit at rainy but.
Eric Windmill: Costs are also coming down as well.
Eric Windmill: Any additional comments there in terms of how you were able to get the cost down here for the balance of the year.
Speaker Change: Yes, Keith.
Keith Murphy: I'd say going side by side at rainy River. The team has done a great job of focusing on cost control and optimization, which is added the impact of reducing gross costs and unit costs as well.
Keith Murphy: The open pit drilling and blasting that they've made improvements there and reducing haulage distances as well and the mill they've been able to optimize and Delaware consumable consumption and then on the maintenance side optimize again.
Keith Murphy: Look at that preventative maintenance programs and optimizing reduce cost there.
Keith Murphy: So the evaporator over performing compared to what we planned the maximize.
Keith Murphy: The utilization programs for any of our brands or to the team is in control nothing to report here.
Keith Murphy: Other than success.
Yeah.
Speaker Change: Okay, great great to hear I know certainly we're watching that.
Speaker Change: Alright, Thanks for taking my questions I'll hop back in the futures.
Speaker Change: Thank you.
Speaker Change: Our next question will be from Jeremy <unk> of Canaccord Genuity. Please go ahead.
Speaker Change: Hi, everyone. Thanks for taking my questions a lot of them have been answered already but.
Speaker Change: Got a few more to touch on.
Speaker Change: You mentioned that there'd be an immediate positive impact on costs from the early.
Speaker Change: Early commercial production at new Afton.
Speaker Change: Can you provide any more specifics on how you expect this to impact.
Speaker Change: The rest of this year and early next.
Keith Murphy: Yeah, It's Keith again.
Speaker Change: As Johan mentioned.
Speaker Change: They're commissioning eliminates the knowledge from the C zone level and increases our ton too but.
Speaker Change: Throughout 2024, we've continued to see a decrease in the mining cost per ton as he is on tonnage increases and we realize the benefits from the capital investments that we've made that trend will continue into Q4 and into 2025.
Speaker Change: Hey.
Speaker Change: Fully ramped up at <unk> zone will have a similar cost profile to what we had in.
Speaker Change: <unk> from 2012 to 2020, it's all trending very well.
Speaker Change: Got it.
Good.
Speaker Change: And in terms of the ramp up.
Speaker Change: Timing like we're still talking about.
Speaker Change: For 2500 tonnes per day in.
Speaker Change: 2025 is when are we expected to see that in 2025.
Speaker Change: Thank you.
Speaker Change: Looking at the <unk> profile.
Speaker Change: In Q4.
Speaker Change: So we have a range for that with.
Speaker Change: What would be achieved today and three impressive.
In this difficult for us to put around that and the cost that we have room to improve but basically it will it will it will mainly provided a steady operation.
Speaker Change: Undergone in the 24 hour business going forward.
Speaker Change: Yes.
Speaker Change: Okay. Thanks, I really appreciate the color I'll step back in the queue.
Speaker Change: Thank you.
Speaker Change: Next question is from Michael <unk> at RBC capital markets. Please go ahead.
Speaker Change: Yes, thanks, very much maybe first on rainy River.
Michael <unk>: You talk a bit more about what the potential there is for a pushback or the other satellite pits that you mentioned would that be purely gold price driven at this point or is it dependent on further drilling or other considerations and maybe can you quantify the potential opportunity there even even at a high level.
Michael <unk>: If I look here.
Michael <unk>: You had mentioned there is a few different opportunities, but one of them is that for another.
Michael <unk>: Another prospect to the main pit.
Speaker Change: But when we already have the measured and indicated resources for so.
Speaker Change: We don't need any additional drilling.
Speaker Change: <unk>.
Speaker Change: And then on the whole client server.
Speaker Change: Currently evaluating.
Speaker Change: What an update in the first quarter.
Speaker Change: So some of the other satellites.
Speaker Change: Around the main pit.
Now continuing into <unk>.
Speaker Change: No Sir.
Speaker Change: Thanks Sheila.
Speaker Change: So just so I heard you right should we be expecting an update on those opportunities with the updated technical report.
Speaker Change: Or is that longer term.
Speaker Change: Oh, yes, there will be included in the technical reports other resources and possibly as well.
Speaker Change: We're still evaluating that.
Speaker Change: Okay, and then and then maybe just one follow up if you were to start refocusing on off on excuse.
Speaker Change: Excuse me on open pit operations at rainy would that would that have anything to do or would it impact the plans for underground development or would you think of doing both in parallel.
Speaker Change: We continue to do.
Speaker Change: In parallel.
Speaker Change: Just the main benefit would be to deferred.
Reclaiming stockpile and to keep them move alone.
Speaker Change: Right Okay.
Speaker Change: And then maybe related.
Speaker Change: Sorry, Mike.
We need to provide a good quarter.
Speaker Change: If I recall the answers to the grocery store.
Speaker Change: Right right offsetting the lower grade right now it makes sense.
Speaker Change: Maybe a similar conversation on capital allocation, obviously goal driving that opportunity gold up about 400 since you Reconsolidation part of new Afton from teachers now declared commercial production.
Speaker Change: How are you thinking about the remaining 20% stake there and it is a full reconsolidation.
Speaker Change: That we should be thinking about that you're thinking about when it comes to capital allocation.
Speaker Change: Yes.
Speaker Change: The possibility that Rio so we always have.
Speaker Change: Well, we're looking for these type of possibilities.
Speaker Change: First tranche that we bought was really.
Speaker Change: Strategically important for us.
Speaker Change: The decrease in revenue for sugar shareholders.
Speaker Change: We're still keeping our reminder, fulfillment it's one of the possibility that we currently looking at.
Speaker Change: So would it be fair to say if I can put words in your mouth, maybe that you have.
Speaker Change: Significant opportunities for organic growth, both at rainy and potentially.
Speaker Change: At new Afton.
Speaker Change: That maybe keep you looking internal rather than potentially looking outside the company for growth is that is that a fair.
Speaker Change: <unk>.
Speaker Change: Are those notes to myself. This type of question Mark as you know, but you know as we are keeping all our options open.
Speaker Change: So surely believe that the good way to return value to shareholders is to through organic growth.
Speaker Change: Got it.
Speaker Change: Those are resolvable and we.
Speaker Change: We're really careful about Gov, and I think we are.
Speaker Change: Have a multiplicity of opdivo or two assets.
Speaker Change: Yes.
Speaker Change: <unk>.
Speaker Change: With respect to our people and the things that we if we can prove that my legs, if youre a portion and so for the future and we really appreciate it.
Speaker Change: For the for the other resorts sugarcane to view those all of my peers. We are we are vigilant, we are keeping our eyes open.
Speaker Change: <unk>.
Speaker Change: We did recently in May.
Speaker Change: We want to grow, but we don't want to grow to be big we want to grow to create value with the liquidating value of no growth, we don't want to do the bulk.
Four quarters.
Speaker Change: And we are but we are vigilant and we have capacity to.
Speaker Change: To address different.
So we the team today that has good demand.
Speaker Change: Many of the open pit and underground and we are.
Speaker Change: A lot of skills tumor and different type of ore body underground and insurance premiums were also in the Americas. So we keep our higher than all of our options open.
Speaker Change: Great. Thank you very much for the answers.
Thank you next question will be from Anita Soni of CIBC. Please go ahead.
Anita Soni: Hi, Patrick and Johan and team I, just wanted to ask a little bit more about firstly at new Afton could you just let us know how much the tonnage was this quarter from the seasonal.
Anita Soni: The tonnage from two one.
Anita Soni: So in the total.
Anita Soni: The total tonnage and what we're what Susan was represented.
Alright.
Anita Soni: There are cute.
Anita Soni: But for Q3, both of the arms coming from.
Anita Soni: Yeah from fund VIII actually and we have I would say.
Yes.
Anita Soni: Let's say a thousand tonnes coming from <unk> to a super kind of thought about that.
Sorry, you said 1000 tonnes per day from the season.
Anita Soni: It's about I mean, we're just extract enough to remove the following factor I mean, thats all but.
Anita Soni: What <unk> been doing that and two follow ups on that topic is that we got but then I'm more proud of is the construction of <unk>.
Anita Soni: <unk>.
Anita Soni: The dropdown and we've done that last platforms.
Anita Soni: The other draw points too.
Anita Soni: For us to be more efficient.
Anita Soni: Amortization costs.
Anita Soni: All of us to have at year end about 30.
Anita Soni: Draw balance deadlock fully developed to increase the footprint of case.
Anita Soni: Okay.
Speaker Change: Second question around rainy River as it pertains to next year in 2026, you said you are confident.
Speaker Change: Then it won't impact the mine plan can you just talk about.
Speaker Change: Then I guess the evaluation that you did on it on the 2025 and 2026.
Speaker Change: Great profile to come to that conclusion.
Speaker Change: Yes for sure I mean, so your question is about <unk> of the 2020 filings with the restrictions that Brian any type of specific yes, I'm trying to understand why.
Speaker Change: Go ahead third very good.
Speaker Change: No we in the process of preparing our budget in London and we.
Speaker Change: The basic fee will change we look at the I would say the rainy River, we change basically looked at the idea of the blocks.
Speaker Change: Last while remaining in Pittsburgh.
Speaker Change: We don't we don't have any thoughts on that and that's what happened.
Speaker Change: In Q3.
Speaker Change: Mark.
Speaker Change: Yes.
Speaker Change: On those as we apply some cafes as well as our most loss, but again there is not any of those risks by consistent going forward.
Speaker Change: We sequence everything and basically we came up pretty much as I would say the same on plan that we have.
Speaker Change:
Speaker Change: We present at the end of last year outlook.
Yes, so I guess that.
Speaker Change: <unk> explains.
Speaker Change: The fourth quarter impact, but I was just trying to understand how are you.
Speaker Change: Basically came to the conclusion that there would be no impact in 2025 and 2026 are there no.
Speaker Change: Or did you apply exactly.
Speaker Change: We did apply all the factor on the remaining of the block model that factor that Jeff was talking about here and basically we run the mine plan and we came up pretty much the same production.
Speaker Change: Okay, So maybe higher tons lower grade or is that or is it competitive.
Speaker Change: Knowledge is there is no there.
Speaker Change: The campaign, that's been put is really I would say impacting on this year, but no not much impact in the remaining years because there is no much high grade blocks.
Speaker Change: Okay, Alright, and then just in terms of the sustaining capital guide that you.
Speaker Change: You talked about being about $20 million under some from operational efficiencies and <unk>.
Speaker Change: Tailings dam I guess wins, there, but the other aspect you said was a little bit of timing of spending so how much do you think will be pushed into 2025.
For the sustaining capital.
Speaker Change: And not much is rainy river. The majority the majority of the reduction in sustaining capital is effectively reclassification to opex.
Speaker Change: So.
Speaker Change: The $2 million in savings on the tailings facility, but the remainder is re class II to opex. So that is all savings and not much deferrals at rainy River, new Afton in terms of capital a little bit of deferrals on the growth side is we were down to <unk>.
Speaker Change: Low end of the range and but some savings as well as the team of optimize them and commission them.
Speaker Change: Barry.
Barry: So maybe $5 million.
Questions next year, yes.
Barry: Yes.
Barry: Okay, and then lastly on rainy as you brought it up with the <unk>.
Barry: Stripping sorry, the capital moving to Opex.
Is that a result of higher gold prices and waste coming or I'm, just trying to understand why that happened and what the <unk>.
Sure.
Speaker Change: It's just the timing of the strip ratio from accounting perspective, we have a cap on our ratio that we capitalized.
And when we were doing our original guidance to fit the way the.
Speaker Change: The strip ratio ended up over the year and but the main message is there is no change in the mine plan in terms of the total tons. We've stripped in line with plan, it's just a little bit on the accounting reclassification.
Speaker Change: Okay and then so next year I was I recall earlier. This year, you had said that the remaining.
Speaker Change: The remaining life of mine plan. The strip was at the start of the year of $1 95, and Youre doing I guess about three or more right. Now. So is it fair to say in 2025 2026 are going to be below one one to one.
Speaker Change: Yes, I Havent got that number exactly in front of me, but you are right.
Speaker Change: The 2024 and was focused on stripping and exposing that order for 25 and 26 in phase four so yes, we will see a significantly reduced strip ratio of <unk> 25 in 2006.
Speaker Change: Okay. That's it from my questions. Thank you for taking my questions here.
Speaker Change: Thank you.
Speaker Change: Next question will be from Lawson Winder at Bank of America Securities. Please go ahead.
Lawson Winder: Yes, thanks, very much operator, hi, good morning team I just wanted to.
Lawson Winder: First of all can I ask about the.
The reserve update for year, and what are you guys thinking in terms of gold and copper price assumption in estimating that reserve and resource update.
Lawson Winder: And particularly as it pertains to the exploration success you've had to date.
Speaker Change: Yeah. So we can begin here so just.
Speaker Change: Bond.
Speaker Change: At the end of last year, we used.
Speaker Change: Metal prices of 41 to those brands at Goldman.
Speaker Change: <unk> hundred 25 per pound of copper.
Speaker Change: With the significant increase in the consensus long term prices. This year, we are looking to.
But as Lee increase those metal price assumptions for yearend resumes.
Speaker Change: It's still running some sensitivities and evaluate the net maintenance so what these numbers.
Speaker Change: Okay.
Speaker Change: Did you sorry, you say modest increase.
Speaker Change: Yes, it's still going to be significantly below the spot prices, but yes. We are looking at an increase compared to what we did last year.
Speaker Change: Okay, Great and I was also going to ask you about your exploration budget for next year.
Speaker Change: Given that you are still in that process I am not sure. If you can give us a very specific number but perhaps you could give us a directional range do you anticipate that exploration budget to increase in 2025 versus 24.
Speaker Change: Yeah.
Speaker Change: Two things here, because again because of the result for us whereas in their own growth.
Joe.
Speaker Change: Presenting projects include winning for the beginning of the year.
Speaker Change: So, but we look we are working with.
Speaker Change: We are good projects.
Speaker Change: Most of yoga, some others since geology to exploration, where we're not.
Speaker Change: Depending on the progress we are shipping more so.
Speaker Change: Joe the module to <unk> during the year based on their exclusion Jason the ideas were generated by the team so for next year with too.
Speaker Change: This.
Speaker Change: We are also we're drilling so the success of the turbine broker driven exploration work where should the next the next February.
We will probably be next year I was wondering if we can aggressive business model and intelligence.
Speaker Change: <unk> was it was excellent for future.
Speaker Change: The expected next year also.
<unk>.
Speaker Change: Following the close of Q1, we'll have to do some.
Speaker Change: The properties, we have between the reversal, we can look at.
Speaker Change: I don't want to again folks we have the number here we are working on.
Speaker Change: Most of it.
Speaker Change: Right.
Speaker Change: So.
Speaker Change: Sure.
Speaker Change: Super Foods openings will support to existing users.
Speaker Change: Okay.
Okay.
Speaker Change: Yes. Thanks for thank you for that color and then if I.
Speaker Change: I could just ask one more question as you think about potential expansions to rainy river are there areas.
Speaker Change: So where you could expand that would be exclusive of the royal gold stream.
Speaker Change: Uh huh.
Speaker Change: Are the areas Youre looking at also subject to that stream.
Speaker Change: Yes.
Speaker Change: The.
Speaker Change: <unk> is on the land package at rainy River so.
Speaker Change: I think most of the.
Speaker Change: Pit pushback et cetera would be would be subjective, but and the team are always looking at opportunities around there.
Speaker Change: So there <unk>.
Speaker Change: Yes.
Speaker Change: If the stock respectively subject industry.
Speaker Change: Okay. Thanks, very much John appreciate it.
Speaker Change: Thank you and at this time Mr. Sha we have no other questions registered please proceed.
Speaker Change #100: Thank you Sylvia and to everyone, who joined US today. Thank you 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 day.
Speaker Change #101: Thank you, Sir ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending and at this time, we do ask that you. Please disconnect your lines.
Speaker Change #101: [music].
Speaker Change #101: Yeah.
Speaker Change #101: Okay.
Speaker Change #101: Yes.
Speaker Change #101: Yes.