Q1 2025 New Gold Inc Earnings Call
Chester: Good morning, my name is Chester and I will be your conference operator today.
Good morning, My name is Chester and I'll be your conference operator today.
Chester: Welcome to the New Gold's first quarter 2025 earnings call and webcast. All lines have been placed on mute to prevent any back. Please be advised that today's conference call and webcast is being recorded.
Welcome to the new Gold's first quarter 2025 earnings call and webcast.
Lines have been placed on mute to prevent any background noise.
Be advised that today's conference call and webcast is being recorded.
Chester: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star button, then the number 1 on your telephone keyboard. If you would like to withdraw your question, please press the star button, then the number two.
I'll start the speaker's remarks, there will be a question and answer session.
If you would like to ask a question. During this time simply press the start button then the number one on your telephone keypad.
If you would like to withdraw your question. Please press the star button that the number too.
Ankit Shah: I would now like to hand the conference over to Ankit Shah, Executive Vice President of Strategy and Business Development. Thank you, operator, and good morning, everyone. We appreciate you joining us today for New Gold's first quarter 2025 earnings conference call and webcast. On the line today, we have Patrick Godin, President and CEO, and Keith Murphy, our CFO. In addition, we have Travis Murphy, Vice President of Operations, Luke Buchanan, Vice President of Technical Services, and Jean-Francois Rabanel, Vice President of Geology, available to assist during the question and answer period. Should you wish to follow along with the webcast, please sign in from our homepage at newgold.com.
Speaker Change: I would now like to hand, the conference over to Anne Gates Shah Executive Vice President of strategy and business development. Thank you.
Speaker Change: Thank you operator, and good morning, everyone. We appreciate you joining us today for new Gold's first quarter 2025 earnings conference call and webcast.
Patrick: I say, we have Patrick <unk>, President and CEO Keith Murphy our CFO. In addition, we have Travis Murphy Vice President of operations, Luke Buchanan, Vice President of technical services and John Fry. So Robin now Vice President of geology available to assess during the question and answer period.
Speaker Change: Wish to follow along with the webcast. Please sign in from our homepage at new gold Dot com.
Ankit Shah: Before the team begins the presentation, I would like to direct your attention to our cautionary language related to the four looking statements found on slide two of the presentation. Today's commentary includes four looking statements relating to New Gold. In this respect, we refer you to our detailed cautionary note regarding four looking statements in the presentation. Your caution that actual results in future events could differ materially from those expressed for implying for the statement. Slide 2 provides additional information and should be reviewed. We also refer you to the section entitled risk factors in New Gold's latest AIF, MD&A, and other filings available on CDAR Plus, which set out certain material factors that could cause actual results to differ.
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 slide two provides additional information. It should be reviewed we also refer you to section entitled risk factors in new Gold's latest <unk> and DNA and other filings available on SEDAR class, which set out certain material factors that could cause actual results.
Speaker Change: Different.
Ankit Shah: In addition, at the conclusion of the presentation, there are a number of end notes that provide important information and should be reviewed in conjunction with the material presented.
Speaker Change: In addition at the conclusion of the presentation. There are a number of end notes that provide important information and should be reviewed in conjunction with the material presented.
Ankit Shah: Slide four highlights some of the key accomplishments during the first quarter of twenty twenty five. Over the first four months of the year, we have made excellent progress on advancing and completing many of the objectives we presented at the beginning of the year. Safety highlighted by our courage to care culture continues to be a focus and strength for the company. During the quarter, we delivered a low total recordable injury frequency rate of 0.55, a 40% improvement compared to the first quarter of last year and continuing the downward trend over the last three years. During the quarter, the company produced just over 52,000 ounces of gold and 13.6 million pounds of copper at an all in sustaining cost of $1,727 per ounce.
Speaker Change: Slide four highlights some of the key accomplishments during the first quarter of 2025.
Speaker Change: Over the first four months of the year, we have made excellent progress on advancing and completing many of the objectives. We presented at the beginning of the year safety highlighted by our courage to care culture continues to be a focus and strength for the company.
Speaker Change: During the quarter, we delivered a low total recordable injury frequency rate of 0.55% to 40% improvement compared to the first quarter of last year and continuing the downward trend over the last three years.
Speaker Change: During the quarter. The company produced just over 52000 ounces of gold and $13 6 million pounds of copper at an all in sustaining cost of $1727 per ounce.
Ankit Shah: First quarter gold production represented approximately 15% of the midpoint of the consolidated production guidance of 325 to 365,000 ounces of gold, slightly ahead of the planned first quarter guidance of 14%. The company generated over $107 million in cash flow from operations and $25 million in free cash flow with New Afton contributing an impressive $52 million in quarterly free cash flow. The company successfully achieved several critical path items, which will enable us to realize the increased production profile throughout the year. At New Afton, CAPE construction progress is now more than 50% complete, facilitating the ongoing ramp up in the mining rate towards the target of 16,000 tons per day by early 2026.
Speaker Change: First quarter gold production represented approximately 15% at the midpoint of the consolidated production guidance of 325 to 365000 ounces of gold slightly ahead of our planned first quarter guidance of 14%.
Speaker Change: The company generated over $170 million in cash flow from operations and 25 million in free cash flow with new Afton contributing an impressive $52 million in quarterly free cash flow.
Speaker Change: The company successfully achieved et cetera, several critical path items, which will enable us to realize the increased production profile throughout the year.
Speaker Change: At New Afton keep construction progress is now more than 50% complete facilitating the ongoing ramp up in the mining rate towards the target of 16000 tonnes per day by early 2026.
Ankit Shah: At Rainy River, the first four months of the year have focused on waste stripping. The pit is now positioned to deliver ore at a low strip ratio through to the end of the year. In the underground line, we achieved an important milestone with the pit portal breakthrough, allowing for increased underground development and production rates. As a result, Rainy River is on track to deliver higher goal production and lower costs in the upcoming quarters, in line with our 2025 guidance.
Speaker Change: At rainy River. The first four months of the year have focused on waste stripping. The pit is now positioned to deliver or at a low strip ratio through to the end of the year in the underground mine, we achieved an important milestone with the pit portal breakthrough, allowing for increased underground development in production rates as a result rainy.
Speaker Change: Remember is on track to deliver higher gold production and lower costs in the upcoming quarters in line with our 2025 guidance.
Ankit Shah: The quarter was also successful in improving our financial flexibility. The company refinanced and extended its senior notes to 2032 and amended and extended the revolving credit facility to 2029, both at lower rates, thereby increasing New Gold's financial flexibility.
Speaker Change: The quarter was also successful improving our financial flexibility the company refinanced and extended its senior notes to 2032 and amended and extended the revolving credit. So its credit facility to 2029, both at lower rates, thereby increasing new gold's financial flexibility.
Ankit Shah: And lastly, in April, we announced that New Gold would acquire the remaining 19.9% free cash flow interest at New Afton, consolidating our interest to 100%. We successfully delivered the fourth first quarter as planned with the primary goal of creating meaningful value for our shareholders. Before getting into the quarterly details, I would like to take a moment on slide five to reiterate the April transaction, where we announced that New Gold would acquire the remaining 19.9% free cash flow interest on New Afton, held by Ontario teachers for $300 million. The transaction will be funded with a mix of cash on hand, our credit facility, and 100 million gold prepaid.
Speaker Change: And lastly in April we announced a new goal would acquire the remaining 19.9% free cash flow interest at new Afton consolidating our interests to 100%.
Speaker Change: We successfully delivered the fourth first quarter as planned with the primary goal of creating meaningful value for our shareholders.
Speaker Change: Before getting into the quarterly details I would like to take a moment on slide five to reiterate the April transaction, where we announced that new Gold's would acquire the remaining 19, 9% free cash flow interest on new Afton held by Ontario teachers for $300 million.
Speaker Change: The transaction will be funded with a mix of cash on hand, our credit facility and 100 million calls prepay.
Ankit Shah: This was an excellent transaction for New Gold and its shareholders for many reasons. There was no equity dilution and no due diligence risk. We consolidated 100% of the free cash flow as we enter a period of strong free cash flow at both New Afton and at New Gold, and it provides the company with full exposure to the significant exploration upside and mine life extension possibilities at New Afton. This transaction concludes a five-year journey that sees New Gold's free cash flow interest return to 100 percent. The initial transaction in 2020 was one of the critical first steps to improve New Gold's balance sheet.
Speaker Change: This was an excellent transaction for vehicles and its shareholders for many reasons.
There was no equity dilution and no detailed due diligence risk the.
Speaker Change: We consolidate 100% of the free cash flow as we enter a period of strong free cash flow at both new Afton and that new boat and it provides the company with full exposure to the significant exploration upside and mine life extension possibilities at new Afton.
This transaction concludes a five year journey that these new Gold's free cash flow interest returned to 100%. The initial transaction in 2020 was one of the critical first steps to improve new rules balance sheet. Following two successful transactions for our shareholders. We enter an incredibly exciting period of free cash flow generation with a strong balance sheet.
Ankit Shah: Following two successful transactions for our shareholders, we enter an incredibly exciting period of free cash flow generation with a strong balance sheet and financial flexibility to continue to build from here. We would also like to thank teachers for their support and partnership over the last five years.
Keith: And financial flexibility to continue to build from here. We would also like to thank teachers for their support and partnership over the last five years with that I will now turn the call over to Keith.
Keith Murphy: With that, I will now turn the call over to Thank you, Ankit. I'm on slide seven, which has our operating highlights. As Ankit noted, Q1 delivered production and costs on plan. Production totaled approximately 52,200 gold ounces and 13.6 million pounds of copper. This decrease in gold production compared to Q1 2024 was driven by planned lower feed grades at both sites. Consolidated oil and sustaining costs for the quarter were $1,727 per ounce per go downs on a byproduct basis due to the lower planned production in Q1. Costs will continue to trend down throughout the year as production increases.
Keith: Thank you I guess I'm on slide seven which has our operating highlights as they didn't get noted Q1 delivered production and cost on plan production totaled approximately 52200 gold ounces and $13 6 million pounds of copper is decreasing golf reduction compared to Q1 2024 was driven by <unk>.
Keith: Lower feed grades at both sites.
Keith: Consolidated all in sustaining costs for the quarter were $1727 per ounce or go down on a byproduct basis due to the lower plant production in Q1 cost will continue to trend down throughout the year as production increases.
Keith Murphy: New Aston delivered an excellent quarter as the B3K continued to deliver strong grades better than planned. As a result, New Afton achieved an all-in sustaining cost of negative $687 per ounce after considering the copper credit. Rennie River delivered on plan with the focus on waste stripping to set up the open pit for low strip, high ore extraction for the balance of phase four. All in sustaining costs were $2,758 in the quarter and should trend lower throughout the year as production ramps up. Our total capital expenditures for the quarter were approximately $75 million with $42 million spent on sustaining capital and $33 million on growth capital.
Keith: You're asking delivered an excellent quarter <unk> continued to deliver strong grades.
Keith: Hi.
Keith: As a result, new Afton achieved an all in sustaining cost of negative $687 per ounce after considering the copper credits.
Keith: Randy we over delivered on plan with the focus on waste stripping to set up the open pit for low strip high or a distraction for the balance of phase four.
Keith: All in sustaining costs were $2758 in the quarter and should trend lower throughout the year as production ramps up.
Keith: Our total capital expenditures for the quarter were approximately $75 million, but 42 million spent on sustaining capital and $33 million on growth capital.
Keith Murphy: At New Afton, sustaining capital is primarily related to equipment and vehicles, while growth capital primarily related to sea zone underground mine development and cave construction. At Rainy River, sustaining capital primarily related to capitalized waste, tailing samurais and capital components, while growth capital related to underground developments of underground main and intrepid.
Keith: At new Afton sustaining capital is primarily related to equipment and vehicles growth capital primarily related to C Zone underground mine development in Cape construction.
Keith: At rainy river sustaining capital primarily related to capitalized waste tailings dam raises and capital component growth capital related to underground development underground, Maine and intrepid.
Keith Murphy: Turning to the assets, starting with new apps and unsliding. You have been delivered another strong order. The B3K performed better than planned, and C-Zone ore production continued its ramp up following commercial production and crusher commissioning early in the fourth quarter of 2024. First quarter production represented approximately 28% and 25% of the mid point of guidance of 60 to 70,000 ounces of gold and 50 to 60 million pounds of copper respectively, higher than the quarterly guidance of 20% due to those higher B3 grades. The B3 cave is expected to be exhausted by the end of the second quarter, and annual production is expected to be in line with the guidance profile previously provided.
Keith: Turning to the assets, starting with new Afton on slide eight.
Keith: <unk> delivered another strong quarter.
Keith: The <unk> performing better than plan and seize on oil production continued its ramp up following commercial production and crusher commissioning in early early in the fourth quarter of 2024.
Keith: First quarter production represented approximately 28% and 25% at the midpoint of guidance of $60 to 70000 ounces of gold and 50 to 60 million pounds of copper respectively higher than the quarterly guidance of 20% due to those higher <unk> grades.
Keith: The <unk> is expected to be exhausted by the end of the second quarter and annual production is expected to be in line with the guidance profile previously provided.
Keith Murphy: All in sustaining costs for the quarter decreased substantially compared to the prior year period, driven by lower operating expenses, lower sustaining capital spend and higher byproduct revenue. With increased production at lower costs, you often generated an impressive $52 million of free cash flow while continuing to complete the construction of the C-Zone blockade.
Keith: All in sustaining costs for the quarter decreased substantially compared to the prior year period, driven by lower operating expenses lower sustaining capital spend and higher byproduct revenues.
Keith: With increased production at lower cost new Afton generated an impressive $52 million of free cash flow, while continuing to complete the construction of the C Zone block cave.
Keith Murphy: Turning now to Rainy River on slide nine. Co-production in the first quarter was in line with plan producing 33,900 ounces. First quarter production represented approximately 12% of the midpoint of guidance of 265 to 295,000 ounces of gold, slightly ahead of the quarterly guidance of 11%.
Keith: Turning now to rainy river on slide nine.
Keith: Gold production in the first quarter was in line with plan producing 33900 ounces.
Keith: First quarter production represented approximately 12% at the midpoint of guidance of 265 to 295000 ounces of gold slightly ahead of the quarterly guidance of 11%.
Keith Murphy: Production in the first quarter was lower than prior period as planned, as the majority of ore processed was from the lower grade stockpile, but phase four stripping was advanced. With the quarter delivering as planned, production is expected to step up meaningfully going forward, and we remain on track to deliver our production and cost guidance for the year.
Keith: Production in the first quarter was lower than prior period as planned as the majority of our process was from the lower grade stockpile phase four stripping was at Baxter.
Keith: With the quarter delivering as planned production is expected to step up meaningfully going forward and we remain on track to deliver our production and cost guidance for the year.
Keith Murphy: Our financial results can be found on slide 10. First quarter revenue was $209 million, higher than the prior year quarter due to higher metal prices and higher copper sales, slightly offset by lower gold sales. Cash generated from operations before working capital adjustments was $90 million or 11 cents per share for the quarter. This was higher than the prior year period, primarily due to higher revenue. New Gold generated quarterly free cash flow of $25 million as higher revenue was only partially offset by the higher capital expenditure as key growth projects were advanced. The company recorded a net loss of approximately $17 million, or $0.02 per share during Q1.
Keith: Our financial results can be found on slide 10.
Keith: First quarter revenue was $209 million higher than the prior year quarter due to higher metal prices and higher copper sales slightly offset by lower coal sales.
Keith: Cash generated from operations before working capital adjustments was $19 million or 11.
Keith: I appreciate it for the quarter.
Keith: This was higher than the prior year period, primarily due to higher revenues.
Keith: <unk> generated quarterly free cash flow of $25 million as higher revenue was only partially offset by the higher capital expenditure as key growth projects where advanced.
Keith: The company recorded a net loss of approximately 17 million or <unk> <unk> per share during Q1.
Keith Murphy: After adjusting for certain of the charges, net earnings was $12 million, or $0.02 per share in Q1.
Keith: After adjusting for certain of the charges net earnings was $12 million or <unk> <unk> per share in Q1.
Keith Murphy: Acute quarterly adjusted earnings include adjustments related to other gains and loss.
Keith: Quarterly adjusted earnings include adjustments related to other gains and losses.
Keith Murphy: Turning to slide 11. Q1 was a very productive quarter as we continue to strengthen our balance sheet and increase our financial flexibility. In March, we completed a 400 million senior notes offering with an interest rate of 6.875% and due in 2032. This was used to tender approximately $289 million of the 400 million 2027 senior notes, with the remainder to be redeemed in mid-July when the call price steps down. This five-year extension, as well as the lower interest rate, significantly enhances our financial flexibility.
Keith: Turning to slide 11.
Keith: Q1 was a very productive quarter as we continued to strengthen our balance sheet and increase our financial flexibility.
Keith: In March we completed a 400 million senior notes offering with an interest rate of six 875% in June 2032.
Keith: This was used to tender approximately $289 million of the $400 million 2000, 2017 year notes with the remainder to be redeemed in mid July when the call price steps down.
Keith: These five year extension as well as the lower interest rate significantly enhances our financial flexibility.
Keith Murphy: We also executed an amendment to our existing revolving credit facility with strong support from our syndicate of lenders. Under the amendment, the term has been extended by four years, now maturing in March twenty twenty nine. An accordion feature has also been added, which will allow the principal amount of the credit facility to be increased by up to a hundred million, subject to certain conditions.
Keith: We also executed an amendment to our existing revolving credit facility with strong support from our syndicate of lenders under the amendment. The term has been extended by four years now maturing in March 2029, and accordion feature has also been added which will allow the principal amount of the credit facility to be increased by up to $100 million.
Keith: Subject to certain conditions.
Keith Murphy: Lastly, as Ankit mentioned, after the quarter, we announced plans to acquire the remaining 19.9% free cash flow interest in New Aston. This is expected to close in the coming days, and as part of the financing, New Gold entered into a gold prepayment in mid-April. The company has agreed to deliver approximately 2,771 ounces of gold per month over the July 2025 to June 2026 period at an average price of $3,157 per gold ounce. We will utilize cash on hand and the revolving credit facility to pay the remaining $200 million with the expectation that the credit facility will be fully paid off by year end from the meaningful free cash flow we expect to generate throughout the year.
Keith: Lastly, as <unk> mentioned after the quarter, we announced plans to acquire the remaining $19 nine free cash so interest in new Afton. This is expected to close in the coming days and as part of the financing new gold entered into a prepaid gold prepayment in mid April.
The company has agreed to deliver approximately 2771 ounce of gold per month over the July 2025 to June 2000, 2006 period at an average price of $3157 per gold ounce.
Keith: We will utilize cash on hand, and the revolving credit facility to pay the remaining $200 million with the expectation of the credit facility will be fully paid off by year end from the meaningful free cash flow, we expect to generate throughout the year.
Keith Murphy: At the end of Q1, we had cash on hand of $213 million and a liquidity position of $590 million with the credit facility undrawn.
Keith: At the end of Q1, we had cash on hand of $213 million and a liquidity liquidity position of $590 million with the credit facility Undrawn.
Keith Murphy: Sumo, we are in a very healthy financial position by utilizing our balance sheet to consolidate our interest in New Afton to 100%.
Keith: So we are in a very healthy financial position by utilizing our balance sheet to consolidate our interest in new apps into 100%.
Patrick Godin: With that, I'll turn the call over to Pat. Thanks, Keith. Slide 13 reiterates our three years of We expect continued growth in gold and copper production over the next three years. With the increasing production, unit cost balances of gold are expected to be reduced significantly. Subsidizing and growth capital costs are expected to taper off over the next three years. This is probably due to the completion of major projects and the reduction in open distributing after the crisis. With the increase in production combined with the reduction in unit costs and differing capital costs over the next two years, the company is well-positioned.
Pat: I will turn the call over to Pat.
Pat: Thanks Keith.
Speaker Change: Slide 13, reiterates, our three years old books.
Speaker Change: We expect continued growth in gold and copper production over the next three years.
Speaker Change: We have been increasing production unit cost Ron silver gold are expected to be reduced.
Speaker Change: Softening in growth capital costs.
Speaker Change: Paperwork for the next three years.
Speaker Change: Following the completion of major results from the open pit stripping.
Speaker Change: We will be increasing production combined with the reduction in unit costs and different capital cost for the last two years the company is well positioned.
Patrick Godin: Did everyone receive it? I want to reintroduce this free cash flow slide. It was a focal point of our operational outlook presentation back in February. This has been updated to include New Gold's 100% free cash interest in UAFTA. We continue to expect to generate... At current consensus committee price, this translates to approximately $1.86 billion in free cash flow over that period. At current spot prices, the figure exceeds $2.5 billion, over 90% of our market cap.
Speaker Change: We did have a significant.
Speaker Change: Okay.
Speaker Change: I wanted to reintroduce the free cash with free cash flow slide. This was a focal point of our original awkward presentation back in February.
Speaker Change: That has been updated to include new Gold's, 100% free cash interest in the U S.
Speaker Change: We continue to expect to generate seem to tend to be kind of cool.
Speaker Change: Yes.
Speaker Change: Current consensus commodity price this translates to approximately one point.
Speaker Change: $1 billion in free cash silver, Peru at current spot prices.
Speaker Change: <unk> exceeded $2 $5 billion over 90% of our market cap.
Speaker Change: Yes.
Patrick Godin: Touching on exploration briefly on slide 15. At New Acton, the Lower Key Zone Exploration Drift is progressing as planned. We have more than 65% of advancement, and I'm happy to report that we start drilling for the first Exploration Day, and we'll have four additional drills in the drill by the end of Q2. Key zone drilling activities will therefore ramp up significantly throughout the year with the objective of defining key zone-indicated resources by year-end. In addition, we are conducting exploration and drilling for surfers to develop new near-marine tortoises. During the quarter, we also continue to advance technical studies of potential new mining zones not currently included in our recovery life of mining plans.
Speaker Change: Touching on exploration briefly on slide 15.
Speaker Change: Newark.
Speaker Change: The <unk> zone exploration drift is progressing as planned.
Speaker Change: With more than 65% of our best Advancement and I'm happy to report that we started drilling for the FERC extrusion.
Speaker Change: And we allow for additional drills and that live by the end of Q2.
Speaker Change: He is on drilling activities will therefore ramp up significantly throughout the year with the objective of defining an integrated resources by year end.
Speaker Change: In addition, the all kinds of things exploration drilling from surface.
Speaker Change: New near mine targets.
Speaker Change: During the quarter. We also continued to advance technical studies published you'll do mining Luxuriantly in blue.
Speaker Change: February life of mine plan.
Patrick Godin: These are Key Zones, Hanging Wall Zones, and D Zones. The focus continues to be on utilizing existing infrastructures and advancing growth projects to maximize net asset value and extend the mine life to 2040, generating significant free cash flow and value for our ships. At Rennie River, exploration focus during T1 was on the northwest trend, which based on last year drilling has the potential of presenting open pit reserve in the short term.
Speaker Change: These are <unk>.
Speaker Change: Meanwhile, zone and diesel.
Speaker Change: The focus continues to be an enterprising existing infrastructures and advancing growth project and maximize net asset value and extend the mine life to 2040 generating significant free cash flow and revenue for our shareholders.
Speaker Change: So it's really been heard firsthand focus during two one was on the northwest strength, which based on last year drilling of the potential of presenting open pit reserve in the short term.
Patrick Godin: and Phil Sogro, Paporto. Exploration Drilling also targeted the Dong Plunge Extension ODMA from surface as part of the company's strategy to explore for additional high-grade underground. This year's program at the Northwest Trend includes a combination of diamond drilling to test the down-dip extension of the current zone, NRC drilling to infill, and drove-the-zone-alone strike, speeding up exploration and saving on costs. We continue our work in open pit expansions and mining potential. Additional studies on underground mine design in a transition as well as tailings storage also continues to make progress.
Speaker Change: Sales will grow proportionately.
Speaker Change: The first one was I think also target the bank large extension <unk> from surface.
Speaker Change: As part of the company's strategy to explore for additional high grades and enroll.
Speaker Change: This year's program noteworthy trends include a combination of diamond drilling to test the deep down the down dip extension of the <unk> zone.
Speaker Change: North sea drilling to infill and drove this all along strike spending up exploration spending August versions oriented saving on costs.
Speaker Change: We continued our work in open pit and open to this.
Speaker Change: Pension.
Speaker Change: <unk> potential.
Speaker Change: So the bill for.
Speaker Change: Additional studies on the underground mine design and the transition of that as well as tailings storage also continues to make progress.
Speaker Change: Sure.
Patrick Godin: In closing, Q1 was positive for New Gold, and we continue to deliver on our stated strategic goals. We will continue to build on these goals from here.
Speaker Change: In closing.
Speaker Change: Q1 was positive for new gold and we're going to need to deliver on our stated strategic goals.
Speaker Change: We will continue to build on this goes from here.
Patrick Godin: This concludes the delivery of the 2025 production and cost guidance with the same attention to health and safety. Our continuous and powerful total reportable incident frequency rate performance is a direct indicator of the support from our employee for the coverage to care future. At New Afton, we will ramp up C-Zone and advance the development of its extension.
Speaker Change: Included in Israel, and Switzerland, both production and cost guidance.
Speaker Change: Attention to health and safety.
Speaker Change: Our continuous.
Speaker Change: But we are total total reportable incident frequency rate performance is a direct indicator of the support from our employee for their courage to care sugar.
Speaker Change: So at new Afton, we will ramp up seasonal and advance the development of its extension.
Patrick Godin: at Shreddy River. We'll continue to ramp up the underground mine, mining phase four, and advanced phase five open pit development. Lastly, we are continuing to increase our exploration effort on both sides with a combined $30 million of investment for 2025, targeting further reserves replacement. This is a very exciting time for New Gold, with increasing production and significant free cash flow generation in a robust community cycle. Combine that with our safe, well-established mining jurisdiction and exposure to what we view as our preferred metal in gold and copper, and New Gold offers a compelling investment opportunity. The reminder of 2025 will see the company build on the first quarter result, which is expected to create meaningful value for our shoulders and provide increased financial flexibility and optionality for New Gold moving forward.
Speaker Change: Its rainy river will continue to ramp up the underground mine mining phase four phase four in advanced phase VI of open pit development.
Speaker Change: Yeah.
Speaker Change: Lastly, we are continuing to increase our exposure in Florida bauxite with a combined 13 million of investment for 2025.
Speaker Change: Getting further reserves replacement.
Speaker Change: This is a very exciting time for new gold with increasing production and silicon free cash flow generation and our robust commodity cycle.
Speaker Change: That's with our safe would establish my name is a reduction in exposure to what we view are perfect perfect middle and gold and copper and you go out further competing investment proportion.
Speaker Change: The remainder of 2020 and fire was sued the company built on first quarter result, which is expected to create meaningful value for shareholders and provide increased financial flexibility in OXXO to upsell or will be for new gold moving forward.
Patrick Godin: Before I turn the call over to questions, I would like to just take a minute to welcome Travis Murphy to our team. Travis joined the New Gold team as our VP operation in late March and has spent his first month at site. Service will take a more active role in our quarterly calls as it settles in.
Speaker Change: Before I turn the call over to questions I will like to just take a minute to welcome Travis we refer you to our team.
Speaker Change: Travers joined the <unk> team as our VP of operations in late March.
Speaker Change: His first month at site.
Speaker Change: Service will take a more active role in our quarterly calls as it settles in.
Patrick Godin: But for now, I hope you will join me in welcoming him to our team.
Speaker Change: But for now I Hope you will join me in welcoming him to our team.
Patrick Godin: This completes our presentation.
Speaker Change: This completes our presentation I will now turn it back to the operator for the Q&A portion of the call operator.
Chester: I will now turn it back to the operator for the Q&A portion of the call. Operator?
Chester: Thank you.
Speaker Change: Thank you.
Chester: Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the number one on your telephone key. You will hear a prompt that your hand has been raised. Should you wish to cancel your request, please press the star button followed by the number 2. If you are using a speakerphone, please lift the handset before pressing the button.
Speaker Change: Ladies and gentlemen, we will now begin the question and answer session.
Speaker Change: Should you have a question. Please press the star followed by the number one on your telephone keypad.
Speaker Change: To hear a problem that you had has been raised.
Speaker Change: Should you wish to cancel your request. Please press the start button, followed bids and number two.
Speaker Change: If you are using a speaker phone please lift the handset before pressing any key.
Chester: One moment, please, for your first question.
Speaker Change: One moment for your first question.
Michael Siperco: Your first question comes from Michael Siperco from RBC Capital Markets. Please go ahead. Thanks very much for taking my question. Maybe starting with the New Afton exploration update that you provided.
Speaker Change: Your first question comes from Michael <unk> from RBC capital markets. Please go ahead.
Thanks, very much for taking my question.
Speaker Change: Maybe starting with the.
Speaker Change: New Afton exploration update that you provided.
Michael Siperco: In the context of the two part question, I guess, in the context of the additional consolidation of New Afton getting up to 100% and maybe the gold price as well over the last few months, does anything change in terms of how you're approaching that exploration and the outlook for the K Zone and the potential next block cave? And the second part is, can you give us maybe an indication of the cadence of what we should expect in terms of a potential for a resource study? How are you mapping that out over the next little while?
Speaker Change: And in the context of <unk>.
Speaker Change: A two part question I guess in the context of the.
Speaker Change: And the additional consolidation of.
Speaker Change: New afton and getting up to 100%.
Speaker Change: And maybe the gold price.
Speaker Change: As well over the last few months does anything change in terms of how you're approaching about exploration in the outlook for the <unk> zone.
Speaker Change: The potential next block cave and the second part is can you give us maybe an indication of the cadence.
Speaker Change: We should expect in terms of a potential for a resource Ah study how are you mapping that out over the next little while.
Speaker Change: Okay.
Patrick Godin: I think the first question.
Speaker Change: The first the first quarter.
Speaker Change: We consider features as a partner.
Speaker Change: The way that I think will start to know each other and like the way that I am working and not.
Speaker Change: Bring them working and I am fully engaged.
Speaker Change: So we will.
Speaker Change: We will not change to bring the mine life.
Speaker Change: Beyond 2040, so we're investment.
So we cannot spend more money for now that what we are doing because we are mainly limited by.
Speaker Change: By the <unk> itself.
Speaker Change: Our capacity to add more drill but vote, but we are pretty aggressive and will continue to be aggressive Q zone for us is the potential to two.
Speaker Change: We want our objective is to find a leather seats on there.
Chris: So that's why we have the team out sorry, Chris are working extremely hard for this.
Chris: The drift is going as expected.
Chris: We needed to.
Chris: <unk> two intersecting the orebody and to go deeper and to grow more east we need to pose a risk this risk.
Chris: We will be I think we originally we plan to have three drills and addressed we're going to push to find growth.
Chris: This year may lead to complete the drilling as much as we can for the beginning of Q4 to be able to allianz, given our resources and Keystone for Europe.
Chris: That we are doing but in parallel Java as well and the team are looking for targets.
Chris: So I hope that is before yearend, we will be able to disclose few of the discovery of <unk>.
Chris: We still have a lot of financial on our property and we want to maximize that.
Patrick Godin: And we will provide the exploration update probably at the end of Q3, mostly we're targeting that for September. So would it be reason, I know I'm skipping ahead a bit here, but would it be reasonable if you have, let's say, the success that you think you'll have at K-Zone and under the C-Zone, would it be realistic to think about maybe an initial study in 2026, or how are you thinking about that pacing? So, depending on our success, it's what we are, we will contemplate, yes. We're also having a wall where we have indicated, we're also having a wall with something that we don't want to park.
Chris: And we promote provider as far as an update.
Chris: End of Q3.
Chris: It's mostly we're targeting that for September.
Chris: So would it be reason I know I'm skipping ahead of it here, but would it be reasonable.
Chris: Let's say the success that that you think youll have at zone and under the C zone.
Chris: Would it be realistic to think about maybe an initial study in 2026 are or how are you thinking about that pacing.
Chris: No.
Chris: So thats, what we are we won't get the VTS. We also hanging wall, where we have indicated we also have been getting wall was something that we don't want to parse it.
Patrick Godin: It's on the, it's just behind the upper lift that we mined between 2012 and 2022. We have indicated resources and a new wall. So, we want to, the main objective for the team is for Jean-Francois and Luke is to look at the, to have a holistic approach of the resource that we have. If we're just having one target and we run after this, yes, we'll generate an EV, but if we put the three and we align them one after the other, what is the good order to generate the maximum EV and reduce the capital allocation to make sure that because one of the objective personal objective that it's our objective that we have is to be to continuously generate cash flow too often.
Chris: On the <unk>.
Chris: We are in the <unk> remind between 2012 and 2022.
Chris: We have indicated resources and then you also we want to the amount of the two four for the team moves forward look is to look at the two have unrealistic approach of the resource that we have if we just had the one target and we run. After this yes, we will generate an EV, but if we put the tree and we align them one after the other one is the good order.
Chris: To generate the maximum NPV and reduce.
Chris: The capital allocation to make sure that because one of the objective personal objective.
Chris: Our objective that we are able.
Chris: To be to continue and generate cash flow.
Patrick Godin: And based on that, I think if we do our job appropriately, we will be able to balance our capital allocation and the new generation and the NED for sure. So I think for now, as Jean-Francois and the team are blasting the exploration, if I can say that, to bring us and our objective, as I said to you, is to find another season there. And if it's been consequently, I think we can easily bring this money beyond 24.
Chris: And based on that I think if we do our job of appropriately will be able to balance our capital allocation and the revenue generation and the NPV for shareholders. So I think for.
Chris: We are now.
Chris: And the team are blasting the exploration if I can say that two to bring us an hour.
Chris: Dave as I said to you is to find another season there.
Chris: And consequently, I think we can easily bring this morning beyond 2014.
Chris: Yeah.
Patrick Godin: So we target studies for, we target studies for, we target resource updates for the end of this year. So we started providing an update to the market for exploration work at the end of Q3. We want to have new educated resources for year-end. And we will probably blast, we're already doing work, so Luke is working extremely hard with the team. We're already doing prep works to have studies for 2026. Okay, makes sense.
Chris: But with Oregon.
Chris: Target studies for with target resource update for the end of this year. So it's provided an update to the market for extortion work at the end of Q3, we want to have new unscheduled resources for year end and where we are.
Chris: Glass all we were already doing work. So Luke is working extremely hard with the team we already doing prep works to our studies for 2026.
Chris: Okay. It makes sense and then just one follow up on M&A then.
Michael Siperco: And then just one one follow up on on M&A then. I mean, it sounds to me like you you've got a lot of optimism about new Afton, there's the upside at at Rainy River, again, in the context of the consolidation from, you know, 50% to 100% of new Afton.
Chris: I mean, it sounds to me like.
Chris: You've got a lot of optimism about new Afton and there's the upside at rainy River again in the context of the consolidation from 50% to 100% of new Afton.
Patrick Godin: Are you thinking much about growth opportunities outside of the portfolio? Or do you think for now, you've got more than enough on your plate to look at longer term growth? I think the first thing is what we control is our organic growth. That's something that we, I'm sorry, we cannot control what is in the ground with exploration, but the thing is we are, we control our destiny through, if we develop our resources and develop our assets. So it's what we can control and it's where we are investing the majority of our effort in capital allocation in terms of organic growth.
Chris: Are you thinking much about growth opportunities outside of the portfolio or do you think for now.
Chris: <unk> got more than enough on your plate.
Chris: To look at longer term growth.
Chris: The first thing is what we control is our organic growth.
Chris: Thing that we cannot control what is in the ground with exploration, but I think as we control our destiny through true if we develop our resources and develop our asset so its what we can control and it's where we're investing the majority of our efforts.
Chris: And capital allocation turmoil, if organic growth for M&A.
Michael Siperco: For M&A, you know, it's, it all will depend on the opportunity, as I explained to you before, our intent is not to be bigger, to be bigger. Our intent is to be bigger, to be better. And so, and we are prudent in our approach and our focus is to increase value per share. And it's mainly what this data we're actually here. Okay, perfect. Thank you very much. I'll pass it on. Thank you so much for that question.
Chris: It all will depend on the opportunity as I explained to you before our intent is not to be bigger to be bigger.
Chris: <unk> has to be bigger it could be better.
Chris: And we are prudent in our approach and our focus and to improve its value per share.
Chris: And it's mainly what this picked our accident year.
Speaker Change: Okay perfect. Thank you very much I'll pass it on.
Speaker Change: Thank you so much for that question.
Lawson Winder: The next question comes from Lawson Winder from Bank of America, please go ahead. Thank you, operator. And good morning, Patrick and team. Thanks so much for the update. I'm thinking of Rainy River and the future there.
Lawson Winder: The next question comes from Lawson Winder from Bank of America Peak go ahead.
Lawson Winder: Thank you operator, and good morning, Patrick and team. Thanks, so much for the update.
Speaker Change: <unk> of rainy river and the future there so with the gold price where it is.
Lawson Winder: So with the gold price where it is, to what extent might you now consider a more significant layback on the open pit to continue to access additional ore there as opposed to just focusing on underground? And then in thinking of that, what are your options for Taylor? Yeah, so I think we, Luke and I, we can answer to this, but the new is, We are looking at this because we already have indicated resources. You know, we have a part, we have gains that we can have if we push the open pit, and we have part of the answers that will be transferred from underground to the open pit mining method.
Speaker Change: To what extent might you now consider a more significant layback on the open pit to Q2 continued access.
Speaker Change: Additional ore there as opposed to just focusing on underground.
Speaker Change: And then and thinking about what are your options for calix.
Speaker Change: Yeah. So thanks.
Speaker Change: <unk>, we get an answer to this but the new rules.
Speaker Change: We are we're looking at this because we already.
Speaker Change: Indicated resources.
Speaker Change: We are a part we have gains that we can if we bought the open pit than we are.
Speaker Change: Part of the answer is that will there'll be transferred from underground to the open pit mining method.
Patrick Godin: What we are looking at, actually, is the capex allocation, not necessarily for the pushback itself, but for the thin storage facilities. So we, for the 42-101 that we present to the market at the beginning of Q1 of this year, the thin storage facility is close to its maximum capacity. So we have All the approach and profile that we present in the technical report will be stored in the data storage facility, but we are closed to the maximum capacity. So we are looking at different possibilities to reduce the capex that we will have to invest in the data storage facility if we want to do the pushback.
Speaker Change: What we are looking at thanks really is is the capex allocation.
Speaker Change: $74 by itself.
Speaker Change: Please storage facility so.
Speaker Change: For the 42 <unk> hundred one that we presented to the market.
Speaker Change: The beginning.
Speaker Change: Beginning with Q1 of this year.
Speaker Change: Tailings storage facility.
Speaker Change: <unk> is close to its maximum capacity.
Speaker Change: Also we are.
Speaker Change: All of the infrastructure.
Speaker Change: All of the propulsion profile that we presented in the technical report.
Speaker Change: As will the store.
Speaker Change: So what we are close to the maximum capacity.
Speaker Change: We are looking at different possibilities.
Speaker Change: To redo the Capex that we will have to invest in building a storage facility. If we want to do the pushback.
Luke Buchanan: And it's all this balance that Luke is working on.
Speaker Change: All of this balance that Luke is working out what do you want to add something.
Luke Buchanan: Do you want to add something? No, I think that covers most of it. I think, just to add, that this exploration drilling that we're doing in Northwest Trend is... provided the opportunity for a potential small peer-to-northwest trend as well. And if that works out, then that also provides an extra opportunity for in-peer tailings in the future as well. So we're looking at lots of different scenarios and different options. Yes, you're right. The capital is behind us in the mill. We have trained people who are trained and qualified to do a bit mining. We have motivated people.
Speaker Change: No I think thats.
Speaker Change: Covered most of it I think.
Speaker Change: Debt.
Speaker Change: This exploration drilling that we're doing in northwest trend is.
Speaker Change: Provided the opportunity for potential small pit at northwest trend as well.
Speaker Change: And that also budgeted share opportunities.
Speaker Change: Future as well so we've been looking at lots of different service disruptions.
Speaker Change: Yes, Youre right its the capital is behind Us and the mill.
Speaker Change: A trained people are trained and qualified to do on the mining we are motivated people, we improved drastically our performance in health and safety, we improved drastically also were.
Patrick Godin: We improved drastically our performance in elk and safety. We improved drastically also our maintenance, mill availability with the maintenance in the mill. So we want to maximize that as much as we can.
Speaker Change: <unk>.
Speaker Change: Okay.
Speaker Change: <unk> web.
Speaker Change: The maintenance in the mill.
Speaker Change: We want to maximize that as much as we can and then also for the first time this year.
Patrick Godin: And also for the first time this year, often we are investing job as well as looking for targets on our land package at Rainy River. So with the vision that if we, our vision is ultimately at the end of the, when we'll exhaust the mining, the mining reserve that we have, is that we have a pit that will be a really low and no cost stating storage facility. So if we can find another pit, then we are, we're connected to the national grid. We have a really efficient mill that is performing extremely well in terms of recovery compared to the grade that we're feeding the mill with.
Speaker Change: Invest things up was what I was looking for targets on our land package at rainy River, So with division that.
Speaker Change: Our vision is ultimately at the end of the winter will exhaust the mining the mining reserve that we have.
Speaker Change: Is that we have a pit that will be.
Speaker Change: A really low or no cost savings. So those are some diesel if we can find another pit than we are.
Speaker Change: We're connected to the national grid, we really appreciate a meal that is performing extremely well in terms of recovery compared to the degree that we are feeding the mill with I think that's what we're looking at we are we are initiating work for the first time on the property to find additional resources.
Patrick Godin: I think it's what we're looking at. We are, we are initiating work for the first time on the property to find additional resources this year.
Speaker Change: This year.
Speaker Change: Okay.
Lawson Winder: Intriguing, yep, looking forward to hearing more about that.
Speaker Change: Intriguing, yes, looking forward to hearing more about that.
Lawson Winder: Can I follow up on on Mike's question just about growth and your desire to get bigger? When you think about the ideal asset to add to the portfolio, do you think of a project, an operating mine? And then when you think of jurisdiction, I mean, are you primarily focused on Canada? You've mentioned the Americas in the past. Maybe you could just elaborate on what your thinking is. of Jurisdiction. What you know is... So because we are a company with two assets, actually, we are pretty agile. We have a head office that is not entirely... We are modest.
Speaker Change: Can I follow up on.
Speaker Change: On my question just about <unk>.
Speaker Change: Growth and your desire to get bigger.
Speaker Change: The when you think about the ideal asset to add to the portfolio do you think of a project an operating mine.
Speaker Change: And then when you think of jurisdiction.
Speaker Change: Are you primarily focused on on Canada, you mentioned in the Americas in the past and maybe you could just elaborate on what Youre thinking is in terms of just curious section as well.
Speaker Change: Well you know it is.
Speaker Change: Sure.
Speaker Change: Yeah.
Speaker Change: So because we are not there.
Speaker Change: Tony we have two assets actually we are.
Speaker Change: We're pretty agile beyond what.
Speaker Change: We have we haven't built that into <unk>.
Speaker Change: Our sales for media plans.
Patrick Godin: We have experience in the Americas. So basically, it's something that if we have to look back, it's something that we will, we are, to be opportunistic, we're looking at. But you know, it's difficult to find a project, you know, that is perfect. We have expertise in open fit. We have expertise in underground. We have, like myself, I built two mines and two companies from scratch. But you know, it was prior. So today, it's a bit different. We have the capital risk is different. But you know, in terms of, it's difficult to get to be precise on this.
Speaker Change: Modest.
Speaker Change: We have experience with the Americas.
Speaker Change: So it was again something that if we have to look back.
Speaker Change: Something that we will.
Speaker Change: We are to be opportunistic were looking up but.
Speaker Change: It's difficult to find the project and all that is perfect.
Speaker Change: We have expertise in open pit, we have expertise in underground we have myself I built to remind them to company from scratch.
Speaker Change: But we knew it was prior.
Speaker Change: It's a bit different we have the capital risk is different but in term of.
Speaker Change: It's difficult to get to be precise on this.
Patrick Godin: And so we look at the safety of people first. And we are looking at stability first. We cannot afford to invest time and effort and capital in the project and to in the government where we are looking, we are doing business is calling back the permits when we cannot afford that. And also, for me, personally, the security of my people is the most important thing. And I'm just I don't want to compromise the security of people we are doing work. So maybe it guides and we know where we want to play, and I think it's where we're looking at.
Speaker Change: So we will look at the safety of people first and we are looking at <unk> <unk>.
Speaker Change: We cannot afford to invest time and therefore it in capital in the project and the government, where we are looking at we are doing business as <unk> banka permits.
Speaker Change: We cannot before that.
Speaker Change: So for me personally.
Speaker Change: The security of it might people is the most important pick.
Speaker Change: I don't want to compromise the security of people we are doing works.
Speaker Change: So maybe it guide that we know where we want to play and I.
Speaker Change: I think as we're looking up.
Patrick Godin: Now, just the other part of my question was kind of project versus operating line. Is there a strong preference between the two? The thing is that Perth is becoming small, so my preference will be to have a mine that is operating with cash flow, and since it can be to build something, but you know, we'll have to see. Again, we want also, our company is... We add to my predecessor, they did an amazing work to re-address the balance sheet of this company and I don't want to get back in the same position, that's why we want to be presenting that.
Speaker Change: No.
Speaker Change: The other part of my question was kind of project versus operating mine is there a strong preference between the two.
Speaker Change: I think it was the perfect becoming small so.
Speaker Change: <unk> is one of them.
Speaker Change: My preference would be to do Avenue, a mine that is operating with cash flow and so as we can be to build something but then we'll have to see again, we want all our company is.
Speaker Change: We added to my my predecessors did an amazing work to to reiterate with the balance sheet of this company and I don't want to get back into the same position. That's why we wanted to be presenting that.
Speaker Change: So but.
Lawson Winder: So, but if we can, the priority will be to add, to bold to our two assets, a productive asset, an asset that is in production, that is trading in cash and subsequently is to build something. But, you know, the last time that I checked on Amazon, it was not possible to find this, you know. Yeah, not easy. Okay, thanks for that color, Patrick. Thanks. Much appreciated.
Speaker Change: If we can the priority will be to to add to bolt on to our two asset productivity. So that's what that is in production that is generating cash and subsequently used to build some big.
Speaker Change: But thanks very much.
Speaker Change: The last time I checked on Amazon in the past.
Speaker Change: People to find us.
Speaker Change: <unk>.
Patrick: Yes, not easy okay. Thanks, thanks for that color Patrick Thanks, much appreciate it.
Lawson Winder: Thank you. Welcome.
Speaker Change: Thank you Youre welcome.
Patrick: Okay.
Patrick: Yeah.
Lawson Winder: Thank you so much for that question.
Eric Windmill: Thank you so much for that question and for the next question, we have here Eric Windmill from Scotiabank.
Eric Winmill: And for the next question, we have here Eric Winmill from Scotiabank. Please go ahead. Hi, Patrick and team. I appreciate you taking my question. Just a new AFT and I wonder if you could elaborate a little bit. So you're doing the flow cleaner circuit upgrade here to bump the recoveries. I know you're saying it's commissioning in Q3, just wondering what some of the key milestones you're looking for there. If you could please remind us on the CapEx. And then I guess, second part, are you seeing any challenges in the supply chain here? It was relates to geopolitics and tariffs and what we're seeing.
Patrick: All I had.
Eric Windmill: Hi, Joe Hi, parchment team I appreciate you taking my question.
Speaker Change: New Afton I Wonder if you could elaborate a little bit so youre doing the flow cleaner circuit upgrade here to bump the recoveries.
Speaker Change: I know youre, saying its commissioning in Q.
Speaker Change: Q3, just wondering what some of the key milestones we should looking for there. If you could please remind us on the Capex and then I guess second part are you seeing any challenges in the supply chain here.
Speaker Change: As it relates to geopolitics and tariffs and what we're seeing.
Patrick Godin: Thanks. Yeah, so we, we have a few, a few questions. Eric, I'll try to, if I'm missing some points, you let me know. So on CapEx, we're bang on. So I think what we present in the technical report, what we present to you in the guidance, we are, so we're, what we're doing, our forecast for year-end, we are bang on. We're progressing extremely well in, because this year we have in the capital allocation is for the stabilization of the tailings. We are a year in advance. And when we did the veximetry of the tailings storage facility, we have 20% less water than expected.
Speaker Change: Thanks.
Speaker Change: So we are.
Erik: We're a few a few question Erik I'll try to if I'm missing some points you let me know so on Capex.
Speaker Change: <unk>.
Speaker Change: So I think what.
Speaker Change: What we presented.
Speaker Change: Nickel report, what we presented to you in the guidance.
Speaker Change: So we're.
Speaker Change: What we are doing.
Speaker Change: Our forecast for year end, we are buying on we're progressing.
Speaker Change: Revenue well in the <unk> because this year we are in the.
Speaker Change: Capital allocation is for the stabilization of the tailings, we argue and events.
Speaker Change: And when we did the debt from three of the tailings storage facility, we are 20% less water and as expected. So we are really well positioned to stabilize that more than a year in advance. So we are really satisfied.
Patrick Godin: So we are really well positioned to stabilize that more than a year in advance. So we are really satisfied. We have an investment in the mill that will increase the recovery in our concentrate that is just replaced with additional cells. It's going extremely well. We are bang on time and slightly under budget. And for underground, we are exactly where we want to be in terms of the progression of the construction of the cave. So we are 53% progression in the cave. We expect to be at 94% at year-end. So we're still having two drawbills to build in Q1 2026 as planned.
Speaker Change: We have an investment in the mill that will increase the recovery that we're concentrate that is just replace what is themselves.
Speaker Change: It's going extremely well, we are bang on time and slightly under budget.
Speaker Change: Underground, we are exactly where we want to be in terms of the progression of the conclusion of the case. So we are.
Speaker Change: We are 53% of the progression in the cave, we expect to be at 94% at year end. So we will still adding crude Rob we're able to build in Q1 2026 as cloud.
Patrick Godin: And actually, we are bang on in terms of CAPEX. So the next milestone is what is exceptional for New Afton is in Q1, we overperformed V3 in terms of recovery and in grade. So it was excellent. And also the progression, it's the progression of L because we have we slowed down the progression of C zone to go forward with the zone because we have more time to extract. And also the progression of C zone is as planned and will reach slightly more So is, and in terms of tons that we'll convey, so we're still expecting to be at 60 tons per day by the end of this year.
Speaker Change: Actually we are bang on in terms of Capex. So the next milestone is.
Speaker Change: What is exceptional for our new opportunities in Q1, we over perform vitry in term of recovery and in term of grades.
Speaker Change: So it's it was excellent.
Speaker Change: So the program is.
Speaker Change: The broker so it felt because we are we slow down the progression of season to go forward with this one because we are more tons to extract and also the progression of <unk> as planned and will reach slightly more.
Speaker Change: So is.
Speaker Change: And in term of term that will come right. So we're still expecting to be at 60 tons per day.
Speaker Change: By the end of this year.
Patrick Godin: And we have, we'll do the expulsion update. That is a major milestone at New Afghan in Q3. We'll have our new reserve at the end, at the beginning of Q4. And so, and so I think it's the major milestone that we're going to have there this year. So the mine is, we're really pleased. It's performing as expected. It's not better than expected mainly at B3.
Speaker Change: And we will do the exploration update that is a major milestone at new Afton in Q3, we will have our new reserve at the end.
Speaker Change: The beginning of Q4.
Speaker Change: And so and so I think that's the major milestone that we got out there this year.
Speaker Change: So the mine is we're really pleased that it's performing as expected if not better than expected <unk>. So and we will complete the extraction of battery in Q2 in this quarter in Q2 2025.
Patrick Godin: So and we'll complete the extraction of B3 in Q2, in this quarter, in Q2 2025.
Keith Murphy: And Eric, it's Keith on supply chain. And yeah, we're not really seeing a material impact right now. And there's a relatively small portion of our cost profile that comes from the US and is subject to tariff. We have seen some pressure that say overall on supply chain, but our team has done a really good job to mitigate. We haven't seen any impact on critical supplies right now. So a little bit, but not much impact at the moment.
Speaker Change: And Eric it's Keith on supply chain, and we're not really seeing a material impact right now and is a relatively small portion of our cost profile that comes from the U S and is subject to tariffs.
Speaker Change: <unk> seen some crashes I'd say overall on supply chain, but our team has done a really good job to mitigate we haven't seen any.
Speaker Change: Impact on critical suppliers.
So a little bit, but not much impact at the moment.
Eric Winmill: Okay, fantastic.
Speaker Change: Okay Fantastic I really appreciate all the added color.
Eric Winmill: Yeah, I really appreciate all the added color.
Luke Buchanan: Maybe just on the float cleaner circuit upgrade, any specific milestones we should be looking for there as it comes into service in Q3? Yeah, hi Eric, it's Luke here. So we've just finished a major shutdown in the plant at New Afton this month, which was planned. So as part of that, we completed the bypass of the third stage of cleaners. So that's put us in position to complete the project in Q3 without any major delays or interruptions to the operation. So that's the really major milestone which was just completed. and the fabrication of the actual Jameson solo.
Speaker Change: Maybe just on the flow cleaner circuit upgrade.
Speaker Change: Specific milestones, we should be looking for there as it comes into service in Q3.
Lawson Winder: Yeah, Hi, Eric it's leukemia.
Lawson Winder: We've just finished a major shutdown in the plants.
Speaker Change: Good afternoon.
Lawson Winder: <unk>, which was planned.
Speaker Change: As part of that would be completed the bypass.
Speaker Change: The third stage of cleaners said, it's predicting positioned to complete the project in Q3 with I E.
Speaker Change: Delay interruption to the operations.
Speaker Change: Thats, a really major milestone, which was just completed.
Speaker Change: And then the fabrication of the extra James.
Speaker Change: Hello.
Eric Winmill: Everything's on track there. All right. Great to hear. Really appreciate it.
Speaker Change: Everything's on track there.
Speaker Change: Alright, great to hear I really appreciate it so yeah. Congrats on a good start to the year ill hop back in the queue cheers.
Eric Winmill: So yeah, congrats on a good start to the year. I'll hop back in the queue. Cheers. Thank you. Thank you for the question.
Speaker Change: Thank you.
Speaker Change: Thank you for the question and for our next question that would be for Jeremy or higher from Canaccord Genuity.
Jeremy Hoy: And for our next question, that would be for Jeremy Hoy from Canaccord General. Please, go ahead. Thank you, operator. Hi, Pat, Ankit, Keith. Thanks for taking my questions and welcome to Travis. Just 2 questions from me. You guys completed a milestone at Rainy River in the underground development as the breakthrough of the pit portal. 2 other key items that you had talked about was the fresh air raise and the vent loop. Can you comment on progress there and if those are still expected to be complete in Q2? And my 2nd question is on grades in V3.
Speaker Change: Please go ahead.
Speaker Change: Thank you operator, hi, Keith Thanks for taking my questions and welcome to Travis.
Speaker Change: Just two questions from me.
Speaker Change: Guys completed a milestone at rainy river and the underground development as the breakthrough of the portal.
Speaker Change: Two other key items that you had talked about was the fresh air range and event loop.
Speaker Change: Could you comment on progress there and if those are still expected to be complete in Q2 and my second question is on grades and the three I know thats going to be culminating.
Luke Buchanan: I know that's going to be culminating this quarter, but just wondering so far if we're seeing elevated grades as that cave tails off. Just for maybe the first point for Ring River, the fresh air raise, you know, the excavation, the raise boring is completed, it was completed last year. The raise is outcast for now. But we, I think we're close to receive all the components. And our objective is to commission that during mid June and to be fully operational for the end of June. So I think it's going to be Q2.
Speaker Change: This quarter, but just wondering so far if we're seeing seeing elevated grades is that case tails off.
Speaker Change: Okay.
Speaker Change: And just for maybe the first boring for you removed the fresh areas.
Speaker Change: The activity. There is boring is completed was completed last year.
Speaker Change: <unk> costs were nine.
Speaker Change: But we think where it goes to receive all the components and our objective is to commission that mid June and to be fully operational for you in June So I think it's going to be in Q2.
Luke Buchanan: That's an important milestone for us. And in the event loop, I think we're still having 117 meters of development to complete. We are ramping up and we are, we have a, we're working for both sides of the decline and we're ramping up and we plan to complete the event loop for again in Q2 this month, this quarter. So basically there's two major milestones with a lot of possibilities to speed up the development too. And the portal, we are using the portal actually and we are hauling the material for removing the waste from the development to the pit and we re-handle that from the pit to the storage facility.
Speaker Change: That's an important milestone for us.
Speaker Change: And the <unk>.
Speaker Change: We're still having one with some activators of Gabon to complete that were ramping up in Europe.
Speaker Change: Yes.
Speaker Change: We're working for both sides and we're ramping up and we felt we plan to complete.
Speaker Change: So thank you for again in Q2 of this month this quarter. So basically there is two major milestone with our locked a lot of possibilities to speed up mobile market.
Speaker Change: Yes.
Speaker Change: We are using the portal actually.
Speaker Change: All leading to material for the wafer with Mclaughlin.
Speaker Change: So the <unk> build.
Speaker Change: Build out from Libya to do so.
Keith Murphy: Okay, great. And then, Jeremy, with them, with the grades, yeah, you know, as we said, we continue to see the B3 cave progress. Well, as I said, you know, expect that to be completed and exhausted in Q2, and then we'll be, you know, in that transition period between C zone and B3 grade. So, you know, we do expect the production profile to, you know, be aligned with what we guided previously. You know, Jeremy, on the grade in the block cave, we simulated that, we're using sophisticated software, we call that PCBC, to do the model of the grade.
Speaker Change: Okay, Great and then along with it.
Speaker Change: Yes.
Speaker Change: And then Jeremy with them with the great. Yeah, we as I said, we continue to see the <unk> K progressed, well as I said.
Speaker Change: We expect that to be completed and exhausted in Q2, and then we'll be in that transition.
Speaker Change: Issue here between C zone in between right. So we do expect the production profile.
Speaker Change: Be aligned with what we guided previously.
Speaker Change: He is on the grade in the block cave as we.
Speaker Change: We assimilated that we're using surplus to good solid surface skip itself, where we call the PCB sito mobile to redo the model of the grid.
Jeremy Hoy: And at the end of the block cave, usually you have more dilution because you have less material in the stope and the dilution is coming from the wall. So we plan for the worst and we wish for the best. And in this situation, we got the best because we had less dilution, so the grade is higher than expected. It's really what is happening. Yeah, well, it was a nice little surprise for the quarter. Sometimes it's good to have some positive, you know. Yeah, absolutely. I'm in agreement there.
Speaker Change: The end of the block cave, we usually you have more dilution because you're you have less material in the scope of the division is coming from the wall. So we plan border worth it we wish for the best and this is the reason we got the best because we are the resolutions would agree that we are going as expected.
Speaker Change: We knew what was happening.
Speaker Change: Yeah, well it was a nice little surprise for the quarter.
Speaker Change: Okay great.
Speaker Change: So sometimes it is good to have some positive.
Speaker Change: Yeah, absolutely I'm in agreement there and if you can.
Jeremy Hoy: And if you can't find any assets on Amazon, maybe you can look at TMU. I hear prices are cheaper there as well. Thank you. Thank you for that question.
Speaker Change: Find any assets on Amazon may be you can look at team, who I hear cheese prices.
Speaker Change: [laughter]. Thank you.
Speaker Change: [laughter].
Speaker Change: Thank you for that question and for our next question that would be far Mohamed <unk>.
Muhammad Siddiq: And for our next question, that would be for Muhammad Siddiq. Please go ahead. Thank you, Patrick and Tim, thanks for taking my question. So just to follow up on Jeremy's question, I guess that you have done under grades, I just wanted to focus maybe on the split. So you mentioned that we can still, I guess, model that 45% in the first half of 2025. And you have to under that imply basically a weaker Q2 with grades coming down there. Yeah, as I said, the Q2 with the B3 coming off and the C zone ramping up, there is that kind of transition point with the caves and, you know, with the start up of the C zone cave, we did expect them, we do expect that to be lower grade.
Speaker Change: Please go ahead.
Speaker Change: Thank you Patrick and thanks for taking my question. So just to follow up on Jeremy's question I guess that you have done under grades.
Speaker Change: I just wanted to focus maybe on the split so you mentioned that we can still.
Speaker Change: I guess smaller that 45% into first half of 2025, and you have to them does that imply basically a weaker Q2.
Speaker Change: With grades coming down there.
Speaker Change: Yes, as I said, the Q2 Petrie coming off in <unk> and <unk> Zelman ramping up there is that kind of transition point with the with the caves in.
Speaker Change: The startup of the C zone K, we did expect and we do expect that to be lower grade. So yes. We still are in line with that production profile that we outlined at the start of the year.
Patrick Godin: So, yeah, you know, we're still in line with that production profile that we have lined at the start of the year. And also, more than this is the bottom part of C zone, we have some lower grade that is expected because it's part of the reserves itself. It's not homogeneous. So, with the lower part, and also we have some drawbills or in waste, and the ore is over and above. So, it's planned. So, in 2025, we will process more tons than we did in 2024 to produce the same metal more or less. And really, because the beginning of C zone, the grade is lower.
Speaker Change: Sure.
Speaker Change: This is the bottom part of C zone.
Speaker Change: Some lower grade that is expected because it's part of the reserves itself, it's not a new drivers so with the lower part and also we have some draw builds of ore and waste in Europe is over and above so.
Speaker Change: Its plan so in 2025.
Speaker Change: We will process more tons than we did in 2024 to produce the same metal more or less is really because of the beginning of a seasonal decorating as the work and its work is in the plan that's what we forecast.
Muhammad Siddiq: And it's what is in the plan. It's what we forecast. Great, thanks a lot for that caller. That's pretty helpful.
Speaker Change: Great. Thanks, a lot for that color that's pretty helpful and just the second question on the capital allocation priority I think.
Patrick Godin: And just the second question on the capital allocation priority, I think, Otto-Alan already touched on the M&A front, but I was just wondering if as part of, you know, as you look over the next three years, and the amount of free cash that you'll be generating, if there was any thinking around maybe potential capital returns to shareholders, or that's really not top of mind currently. Thank you. It's something that, so we are working on that. So for now, for sure for this year, we have to, so just the buyback of the 19.9%, we didn't want to dilute our shoulders.
Speaker Change: All of ours or did you touch on the M&A front, but I was just wondering if that's part of it.
Speaker Change: As you look over the next three years in the amount of free cash flow, you'll be generating if there was any thinking around maybe potential capital returns to shareholders are desperately.
Speaker Change: Not top of mind currently thank you.
Speaker Change: Okay.
Speaker Change: Oh.
Speaker Change: It's something that.
Speaker Change: So we are we are working on that.
Speaker Change: So for now of course for this year.
Speaker Change: We too so just the buyback of the 19 bought 9%.
Speaker Change: Didn't want to dilute our shareholders. It was always strategies so yes.
Patrick Godin: It was our strategy. So yes, we have the prepay and we have the revolver that we want to refill for year as much as possible. And we want also to maintain a minimum of cash in, based on what happened with COVID. COVID can happen or it's mining. So we want to make sure that we have sufficient capital. I'm not talking to have a billion, but was there $150 million in cash in the bank account to react appropriately to what we have to face and to be opportunistic. And after that, if the projects are not. If we have if so we have our project that we want to support is the important value for shoulder it's not for sure if we have we'll have to return the money to the shoulders and something that with the board we are really vigilant and we know that the cash flow that will generate and we know that it's shareholder money and so it's why we're working for and so we will probably look at this in the medium term for sure.
Speaker Change: Yes, we have the prepay and we have the revolver that we want to refill before year end.
Speaker Change: As much as possible and we want also to maintain a minimum of cash and based on what happened with Covid and Covid can reopen over.
Speaker Change: My name is so we want to make sure that we have sufficient.
Speaker Change: Capital I'm, not talking to a $1 billion.
Speaker Change: 100 $150 million in cash in the bank account to react appropriately to what we have to face and to be opportunistic and after that the projects are not.
Speaker Change: If we are.
Speaker Change: So we have our <unk>.
Speaker Change: <unk> that we want to support as they are brought in value for shareholder is not for sure if we.
Speaker Change: We will have to return the money to the shareholders and it's something that with the board. We are really vigilant and we know that the cash flow that we'll generate and we know that that's shareholder money.
Speaker Change: And so that's why we're working for them.
Speaker Change: So we will probably look at this in the medium term.
Speaker Change: Sure.
Muhammad Siddiq: Thanks a lot, Patrick, and congrats on a good quarter. Thank you. Thank you for that question, Mohammed.
Speaker Change: Thanks, a lot Patrick and congrats on a good quarter.
Speaker Change: Thank you.
Speaker Change: Thank you for that question Mohammed and since there are no. Further question at this time I will be transferring to the conference again to Mr. <unk> Shah. Please continue.
Ankit Shah: And since there are no further questions at this time, I'll be transferring the conference again to Mr. Ankit Shah. Please continue. Thank you and thank you to everybody who joined us.
Speaker Change: Thank you and thank you to everybody who joined us.
Ankit Shah: 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 day.
Speaker Change: 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 day.
Speaker Change: Yeah.
Chester: This concludes today's call. Thank you for participating.
Speaker Change: This concludes today's call. Thank you for participating you may now disconnect.
Chester: You may now disconnect.