Q4 2024 New Gold Inc Earnings Call
Core earnings call and webcast.
All lines have been placed on mute to prevent any background noise.
Please be advised that today's conference call is and webcast and is being recorded.
After the Speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press Star then the one on your telephone keypad.
If you would like to withdraw your question. Please press the Star then the number two.
Speaker Change: I would now like to hand, the conference over to and get Shah.
Get Shah: Executive Vice President of strategy and business development.
Speaker Change: We saw it.
Speaker Change: Thank you Vincent and good morning, everyone. We appreciate you joining us today for new Gold's fourth quarter and full year 2024 earnings conference call and webcast.
Speaker Change: On the line today, we have Patrick <unk>, President and CEO and Keith Murphy. Our CFO. In addition, we have Luke Buchanan Vice President Technical services, and John <unk>, Vice President of geology available to assess during the question and answer portion of the call.
Speaker Change: But you wish to follow along with the webcast. Please sign in from our homepage at <unk> Dot com.
Speaker Change: For 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: By two provides additional information and should be reviewed we also refer you to the section entitled risk factors in new Gold's latest annual information form MD&A and other filings available on SEDAR, plus which set out certain material factors that could cause actual results to differ.
Speaker Change: Addition, at the conclusion of the presentation. There are a number of end notes that provide important information and should be reviewed in conjunction with the material.
Speaker Change: Slide four highlights some of the key accomplishments of 2024, we accomplished a lot of our objectives, we laid out at the start of the year.
Speaker Change: By prioritizing health and safety through our courage to care culture, we delivered a low trefor and continued to improve year over year.
Speaker Change: The company produced just under 300000 ounces of gold and 54 million pounds of copper at an all in sustaining costs of $1239 per ounce, beating the low end of our all in sustaining cost guidance range as strong cost discipline led to increasing margins and delivering cash flow from operations of over $390 million in free cash flow.
Of $85 million.
Speaker Change: Throughout the year, we successfully delivered on key project milestones.
Speaker Change: At New Afton, we achieved commercial production at <unk> Zone and commission, the crusher and conveyor systems at.
Speaker Change: At rainy River, we mined the first development ore from the underground means on these milestones were accomplished on budget and ahead of schedule.
Speaker Change: Last week, we released updated technical reports for both assets. These reports incorporated mine life extensions at both sites and increased our underlying net asset value.
Speaker Change: Our exploration efforts throughout the year successfully replace mining depletion of reserves on a gold equivalent basis, we plan to maintain this momentum in 2025 to unlock additional long term value.
Speaker Change: Finally in May we increased our exposure at new Afton to over 80% following the transaction with Ontario teachers, reducing their free cash flow interest from 46% to 19, 9%.
Speaker Change: 2024 successfully positioned our company and we look forward to building on this in 2025 to create significant value for our shareholders.
Speaker Change: With that I will turn the call over to Keith.
Keith: Thank you again.
Speaker Change: <unk>, which has our operating highlights.
Speaker Change: Q4 production was pre released back in early January but it's worth we are great in certain points Q4 delivered the highest production and lowest cost of the year.
Speaker Change: <unk> totaled approximately 80400 gold ounces and $14 5 million pounds of copper.
Speaker Change: The increase in gold production compared to the third quarter was driven by higher feed grades at both sites.
Speaker Change: As holiday at all in sustaining cost for the quarter.
Speaker Change: $18 per ads, a decrease of 15% over the third quarter.
Speaker Change: This is highlighted by strong cost performance at both operations with rainy River continuing to decrease its all in sustaining cost at new Afton, achieving an all in sustaining cost of negative $540 per ounce after considering the copper credits.
Speaker Change: Despite this slight missing gold production compared to our updated guidance strong cost management and discipline allowed the company to beat the low end of its original 2020 for consolidated all in sustaining cost guidance.
Speaker Change: Our total capital expenditures for the quarter.
Speaker Change: The $75 million.
Speaker Change: 1 million spent on sustaining capital and <unk>.
Speaker Change: <unk>.
Speaker Change: Capital.
Speaker Change: At rainy River sustaining capital is primarily related to capitalized waste and tailings.
Speaker Change: Growth capital for the full year under.
Speaker Change: Underground development at <unk> underground trackless.
Speaker Change: Reconciling continue into <unk>.
Speaker Change: Full year total capital is below the 2024 guidance range of $145 million to $165 million due to efficient capital management savings related to the execution of the rainy river retailing salaries and lower capitalized waste stripping, but approximately $5 million of growth capital deferred into 2025.
Speaker Change: At New Afton sustaining capital is primarily related to continuation of the tailings management and stabilization activities.
New Afton growth capital is primarily related to seize on underground mine development and gave construction.
Speaker Change: Full year total capital in 2024 guidance range of $145 million to $165 million, but approximately $15 million of capital deferred into 2025.
Speaker Change: I'll touch on operations, starting with rainy River on slide seven.
Speaker Change: Gold production in the fourth quarter was impacted by unexpected mechanical downtime on the crushing conveying system in December.
Speaker Change: Despite the lower gold production the team did an excellent job to control costs all in sustaining costs were $1327 per ounce for the fourth quarter, which resulted in the operation achieving the original full year all in sustaining cost guidance range.
Speaker Change: This is an impressive effort from the team and resulted in $19 million of free cash flow generated in 2024, while setting up the operation for a sustained period of free cash flow generation.
Speaker Change: Turning now to Neulasta on slide eight.
Speaker Change: Often delivered another strong operating quarter with an increase of 19% gold production and 15% copper production over the third quarter.
Speaker Change: <unk> K performed as planned and season or production is ramping up following commercial production and crusher commissioning early in the fourth quarter.
Speaker Change: Production beat the top end of the original 2024 guidance range with copper production achieving the midpoint.
Speaker Change: All in sustaining costs for the quarter and the year decreased substantially compared to the prior year period, driven by lower operating expenses lower sustaining capital spend and higher byproduct revenues.
Speaker Change: As a result full year all in sustaining cost per gold ounce sold was well below the 2024 guidance range. The operation generated $24 million of free cash flow, while completing the key infrastructure required to enter a period of sustained free cash flow going forward.
Speaker Change: Both operations exit 2024, well positioned to generate significant free cash flow.
Speaker Change: I'll wrap up with our financial results on slide 10.
Speaker Change: Fourth quarter revenue was $262 million, which is a quarterly record.
Speaker Change: Q4 revenue was higher than the prior year quarter, primarily due to higher metal prices and higher copper sales slightly offset by lower gold sales.
Speaker Change: Cash generated from operations before working capital adjustments was $126 million or <unk> 16 per share for the quarter.
Speaker Change: Other than the prior year period, primarily due to higher revenues.
Speaker Change: Jugal generated quarterly free cash flow of $22 million due to higher revenue, partially offset by higher capital expenditures in the quarter as key growth projects milestones were achieved.
Speaker Change: Company recorded net earnings of approximately $55 million or <unk> <unk> per share during Q4 and increased due to higher revenues.
Speaker Change: After adjusting for certain what the charges net earnings were $59 million seven per share in Q4, a significant increase compared to an adjusted net loss of $5 million in the fourth quarter of 2023.
Speaker Change: Our Q4 adjusted earnings include adjustments related to other gains and losses.
Speaker Change: At the end of Q4, we had cash on hand of $105 million and liquidity and our liquidity position of $482 million with the credit facility Undrawn.
Speaker Change: In the second half of 2024, we repaid the entirety of the $100 million drawn on the credit facility related to the Ontario teachers buyback transaction with cash on hand, and during in a capital intensive period for both operations.
Speaker Change: This is made possible by the operational excellence and cost discipline both of our sites showed during the year.
We remain in a very healthy financial position.
Pat: With that I'll turn the call to Pat.
Keith: Thanks Keith.
Keith: Well, if you've ever lymphoma rose over three years outlook, we released last week.
Keith: We expect continued significant growth in gold and copper production over the next three years.
Keith: Both operations will cover remains bullish increase their realization.
Keith: But were completed in 2000.
Keith: Global or.
Keith: Useful.
Keith: Talks amongst those of 2024% to a midpoint of 410000 ounces in 2000.
Keith: 30% increase over three years.
Keith: Copper production is expected to increase 424 million pounds 20, 242, and then pursue Oregon 5 million pounds.
90% of the crews over and over.
Keith: The increasing production and costs were also a board president.
Keith: Sure.
Keith: While in 2000, and the console will do to the all in sustaining costs is expected to be 400 to $500 gold ounces.
Keith: 64% reduction compared to <unk> 24.
Keith: Softening in growth drove growth.
Keith: We're up significantly over the next three years.
Keith: These forward too.
Keith: Fusion proteins and the reduction.
Keith: And yet for the book.
Keith: Further estimates consider the carryover of some capital that was not spent in 'twenty four.
Keith: The increase in production combined with the reduction in unit costs <unk> capital costs over the next three years.
Keith: There is an hour up due to the <unk>, we expect to generate symptom free cash flow over the next three years following the inflection point.
Keith: In mid 2024.
Keith: <unk> constant currency prices.
Keith: We're also the Newton.
Keith: Yes.
Keith: At current spot price the finger exceed $2 billion U S over 80% of our market cap.
Keith: At New Afton in 2025 brochure will look a lot like 2024, as we continue transitioning from the <unk> to the seasonal uptick.
Keith: Total gold production for the year is expected to be 60 to 72000 ounces. While October production is expected to be 50 to 60 million Bucks.
Keith: These all mining rates will continue to ramp up throughout the year towards a 16000 tonnes per day.
Keith: The increase rate is partially offset by lower grades in <unk> is exhausted in the first half of 2025 and <unk> <unk> increase from the year.
Keith: Portions of our direct to consumer campaigns drove hanging in the second half with the first quarter, representing approximately 20% of the annual production again, driven by lower grade those between years.
Keith: <unk>.
Keith: <unk> is expecting gold production of 265 into Jordan 95000 ounces for the year, a 20% increase compared to the tour moved 26000 ounces produced in 2004.
Keith: The increase was driven by a 20% 25% increase in Golar group of Jonah growing mining rates increased during the year.
Keith: Approximately 11% of production scheduling the first oil in the first quarter and 37% in the first stockholder either this is due to the open pit mining sequence.
Keith: We are currently completing we're stripping in phase four and we will permanently.
Speaker Change: Oh Wow.
Speaker Change: From Q2 onwards, we will release iron grade low strip ratio ore from the open pit.
Resilience obtaining capital as we're going forward, our first belt of the year.
Speaker Change: The autograph islands, where we're bullish on to deliver 843000 ounces and Duane Florida as a result of the development completed in 24 that drove the global women's consistent throughout the year broker.
Speaker Change: Capital allocation is higher in the first half of 'twenty due to the commissioning.
Speaker Change: Conversion in the fresh air Roos bonds, which will be complete in Q2.
Speaker Change: Of this year and the brokers with mobile and equivalent.
Speaker Change: In closing 2024 was a challenging year, but an important.
Speaker Change: In 2020 will be another important.
Speaker Change: We will continue to deliver on our students strategy goals.
Speaker Change: This includes delivering on 2020 firewall are shown in gross guidance the same at <unk> 12.
Speaker Change: Support from our employees for their courage to care program.
Speaker Change: Contributing significantly to our health and safety performance since I joined the company.
Speaker Change: At New Afton, we will ramp up susana them in terms of development of ASIC central.
Speaker Change: Now turning to <unk>, we will continue to ramp up the underground mine and advance this viable printed development.
Speaker Change: We will continue to increase our exposure in the affordable bauxite targeting future reserve replacement.
Speaker Change: We haven't turned in a very exciting time for new gold for increasing production and symptom free cash flow generation and a robust communities come into to cycle.
Speaker Change: Combined with our well established warnings or as our showroom and exposure to what we view our pro forma goals in gold and copper the new gold offers a compelling investment opportunity.
Speaker Change: I strongly believe we have a team dedicated to value creation.
Speaker Change: The most read last week with the delivery of two new Technical report and mine life extension of both of our assets.
Speaker Change: Turning towards the fire will be this year, but we look forward to building on free cash flow inflection points achieved in 2024 to create value for our company, our stakeholders by teammates and our shareholders.
Speaker Change: With that we will open the floor up to questions.
Speaker Change: Thank you ladies and gentlemen, we will now begin question and answer session should you have a question. Please press star followed by the one on your Touchtone phone, you'll hear pumps that Johan has been raised.
Speaker Change: Did you issue a decline from the polling process. Please press the star followed by the team.
Speaker Change: Using speaker phone please lift the handset before pressing anything.
Speaker Change: Yeah.
Speaker Change: One moment for our first question.
Speaker Change: Your first question comes from Eric window.
Speaker Change: Please go ahead.
Speaker Change: Oh, yes, good morning patent team. Thanks, a lot for taking my question.
Speaker Change: Nice to see the company generating cash flow here, despite investing in the assets.
Speaker Change: Just a question on rainy River I wanted to follow up from the Tech session and again the MD&A you talk about the opportunity for additional pit pushback some with minimal drilling there just sort of wondering you know what you need to see or how those might ultimately get into the mine plan.
Speaker Change: Any color would be appreciated thanks.
Speaker Change: You brought up so we are.
Speaker Change: As we presume the thing we presented the phase five was an extension with south of the pit.
Speaker Change: We are actually.
Speaker Change: Germany is.
Speaker Change: The normal horse trailer was an expansion to the west.
Speaker Change: We have more money. So we are currently this.
Speaker Change: It's an abortion new for us to to extend the mine life as well so.
Speaker Change: Can extend that these volumes the fifth sixth look solid.
Speaker Change:
Speaker Change: It's depending on few things. So we have that we are addressing that is mostly complete up there it will be driven by rate as far as the whole loans for sure but also.
Speaker Change: Two two to convert in the next tariff we need to confirm the.
Speaker Change: Therefore, the ultimate capacity of our tailings storage facility.
Speaker Change: So it wasn't present those technical report is something that is fully attach and visible so tourists forgetting about the infrastructure that we have.
Speaker Change: We are if we want to extend or push back the pit we are to determine our capacity to Angola, the savings by itself and its something that we are currently working on.
Speaker Change: Okay Fantastic I really appreciate that.
Speaker Change: And just a question as we look out in 2025, obviously you know the back office is setting up a pretty strong Q.
Speaker Change: Q1's going to be lower production.
Speaker Change: Comments on the costs and how we should think about.
Speaker Change: Sustaining costs throughout the early quarters of the year.
Keith: Yes, Keith.
Keith: Yes, it's similar with the production profile that that part outlined.
Keith: We expect Q2 or the second half of the year to be stronger than we expect.
Keith: Our cost profile to follow that so.
Keith: It would be decreased eight at towards the end of the year is that as our production profile increases.
Speaker Change: Okay, Great. That's helpful. I appreciate the added color I'll hop back in the queue.
Speaker Change: As a reminder, if you wish to ask a question. Please press star one on your telephone keypad.
Speaker Change: There are no further questions. Please continue.
Speaker Change: Great. Thank you Vincent and thank you for everyone, who joined US today as always should you have any additional questions. Please do not hesitate to reach out to us by phone or email, thanks and have a great day.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.