Q2 2025 New Gold Inc Earnings Call
Jean-Louis: My name is Jean-Louis, and I will be your conference operator.
Jean-Louis: Welcome to the New Gold second quarter 2025 earnings call and web All lines have been placed on mute to prevent any background Please be advised that today's conference call and webcast is being recorded. After the speaker's remarks, there will be a question and answer session. If you would like to ask questions during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, simply press star 1 again.
Good morning. My name is John Louie and I will be your conference operator today, welcome to the new gold second quarter 2025 earnings call and webcast all lines have been placed on mute to prevent any background noise.
Please be advised that today's conference call and webcast is being recorded after the speaker's remarks. There will be a question and answer session.
If you would like to ask questions during this time, simply press star, then the number 1 on your telephone keypad,
Ankit Shah: I would now like to hand the conference over to Anit Shah, Executive Vice President of Strategy and Business Development. Thank you.
If you would like to withdraw your question, simply press star 1 again.
Oh no like to hand the conference over to Anika uh Executive Vice President of strategy and Business Development. Thank you.
Ankit Shah: Thank you, Jean-Louis, and good morning, everyone. We appreciate you joining us today for New Gold's second quarter of 2025 earnings conference call and webcast. On the line today we have Patrick Godin, President and CEO, Keith Murphy, CFO, and Travis Murphy, Vice President, Operations. In addition, we have Luke Buchanan, Vice President, Technical Services, and Jean-Francois Ravenel, Vice President, Geology available to assist during the question and answer portion at the end of the call.
Thank you and good morning everyone. We appreciate you joining us today. For new world's second quarter 2025 earnings conference call and webcast.
On the line today we have Patrick Odin president, and CEO, Keith Murphy CFO and Travis Murphy vice president operations.
Ankit Shah: Should you wish to follow along with the webcast, please sign in from our homepage at newgold.com.
In addition, we have Luke Buchanan, vice president, Technical Services and John Franco Ravenel by vice president. Geology available to assist during the question and answer portion at the end of the call.
Ankit Shah: Before the team begins the presentation, I would like to direct your attention to our cautionary language related to forward looking statements found on slide two of the presentation. Today's commentary includes 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.
Should you wish to follow along with the webcast? Please sign in from our web home page at new gold.com?
Before the team Begins the presentation I would like to direct your attention to our cautionary. Language related to 4 looking statements found on slide 2 of the presentation.
Ankit Shah: You are cautioned that actual results in future events could differ materially from those expressed or implied in forelooking statements. Slide 2 provides additional information and should be reviewed.
Today's commentary, includes 4. Looking statements relating to noodle in this respect. We refer you to our detailed cautionary know, regarding for looking statements in the presentation.
your caution that actual results in future events could differ materially from those expressed or implied in 4 looking statements,
Ankit Shah: 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.
By 2 provides additional information and should be reviewed.
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.
We also refer you to the section. Entitled risk factors in new gold's latest aif mdna, and other filings available on Cedar plus, which set out certain material factors that could cause actual results to differ.
In addition, at the conclusion of the presentation, there are a number of M 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 second quarter.
Ankit Shah: Through the first half of 2025, we have made excellent progress on advancing and completing many of the objectives presented at the beginning of the year. Safety, highlighted by a purge to care culture, continues to be a focus and strength for the company. During the quarter, we delivered a low total reportable injury frequency rate of 0.82, continuing the downward trend over the last three years. New Afton was awarded three safety awards during the second quarter for exemplary safety performance in 2024. The awards received included the J.T. Ryan Regional Award for British Columbia and Yukon, British Columbia's Safest Large Underground Mine and British Columbia's Mine Safety Innovation Award.
Slide 4 highlights. Some of the key accomplishments. During the second quarter through the first half of 2025, we have made excellent programs on advancing and completing many of the objectives presented at the beginning of the year.
Safety highlighted by a reference to chair culture continues to be a focus and strength for the company during the quarter. We delivered a low total recordable injury, frequency rate of 0.82. Continuing the downward Trend over the last 3 years.
New atton was awarded 3 safety awards during the second quarter for exemplary. Safety performance in 2024, the awards received included the JT Ryan Regional award for British Columbia and Yukon.
Ankit Shah: In the second quarter, New Afton also won British Columbia's Underground Mine Rescue Championship and the Rainy River Mine won Thunder Bay District Mine Rescue Championship. A true testament to our commitment to health and safety.
British Columbia's safest. Large underground mine and British Columbia's mine safety. Innovation award.
Ankit Shah: During the quarter, the company produced approximately 78,600 ounces of gold and 13.5 million pounds of copper at an all in sustaining cost of $1,393 per hour. Gold production for the first half of the year was about 38% of the midpoint of the consolidated production guidance range of 325 to 365,000 ounces of gold, consistent with the plan 38% stated in the February outline. The company generated more than $163 million in cash flow from operations and achieved a record of $63 million in free cash flow. Rainy River also recorded a quarterly record of $45 million in free cash flow.
Bay District, mine rescue Championship a true Testament to our commitment to help and safety.
During the quarter, the company produced, approximately 78,600 ounces of gold and 13.5 million pounds of copper at an all-in sustaining cost of 1,393 per ounce.
Gold production for the first half of the year was about 38% of the midpoint of the Consolidated production, guidance range of 325 to 365,000 oz of gold consistent with the plan 308 percent stated in the February. Al look,
Ankit Shah: The company made significant progress on initiatives aligned with its three year production growth and accomplished several key milestones during the quarter. At New Afton, C-Zone cave construction is now approximately 65% complete, supporting the progressive increase in processing rates towards the target of 16,000 tons per day by early 2026. An important development milestone was also achieved in May with the completion of undercutting, unlocking the remaining extraction drives for development and construction. At Rainy River, the pit portal breakthrough was achieved in early April. Subsequently, completion of the ODM east ventilation loop and commissioning of the fresh air rays were accomplished later in the quarter.
The company generated more than 163 million in cash flow from operations and achieved a record of 63 million in free cash flow Rainy. River. Also recorded a quarterly record of 45 million in free cash flow.
The company made significant progress on initiatives aligned with its 3 year production growth and accomplished several key Milestones during the quarter.
At new atton sea on Cape construction. Is now approximately 65% complete, supporting the progressive increase in processing rates towards the target of 16,000 tons per day by early 2026,
An important development Milestone was also achieved in May with the completion of undercutting unlocking, the remaining extraction, drives for Development and Construction.
At Randy River. The PIP portal breakthrough was achieved in early April.
Ankit Shah: These key milestones are expected to facilitate increased underground development and production.
Ankit Shah: Our exploration initiatives made significant progress during the quarter, highlighted by record activity at New Afton. Following the completion of the C-Zone extraction level exploration drift, current efforts are concentrated on K-Zone. At Rainy River, work is advancing on the northwest trend open pit zone, as well as upgrading the underground ore inventory.
Subsequently completion of the odm East ventilation Loop and commissioning of the fresh air rays were accomplished later in the quarter. These key Milestones are expected to facilitate increased underground development and production rates
Our exploration initiatives made significant progress during the quarter highlighted by record activity at new eitan.
Following the completion of the Season extraction level exploration. Drift current efforts are concentrated on.
Ankit Shah: We plan to provide an exploration update in September.
Ankit Shah: In April, it was announced that New Gold would acquire the remaining 19.9% free cash flow interest at New Afton, consolidating our interest to 100%.
At Rainy River. Work is advancing on the northwest Trend. Open pit Zone as well as upgrading the underground or inventory. We plan to provide an exploration update in September.
Ankit Shah: In summary, we achieved the planned objectives for the first half of 2025 with a continued focus on generating meaningful value for our shareholders.
In April, it was announced that new builds would acquire the remaining 19.9%, free cash flow interest at new atton. Consolidating our interest to 100%
Ankit Shah: With that, I will now turn the call over to Travis. Travis.
Travis Murphy: Thank you, Ankit. I'm on slide six, which has our operating highlights. As Ankit noted, Q2 delivered production and costs on plan. Production totaled approximately 78,600 gold ounces and 13.5 million pounds of copper. This increase in gold production compared to Q2 2024 was driven by planned higher feed grade at Rainy River, partially offset by lower plan feed grade at New Afton. Consolidated all-in sustaining costs for the quarter were $1,393 per gold ounce on a byproduct basis, in line with Q2 2024, but a substantial improvement over the first quarter of 2025.
In summary, we achieved the planned objectives for the first half of 2025, with a continued, focus on generating, meaningful value for our shareholders with that. I will now turn the call over to Travis.
Travis.
Thank you, anchor.
I'm on slide 6 which has our operating highlights as anchor noted, Q2 delivered production and costs on plan production totaled, approximately 78,600 gold Oz and 13.5 million pounds of copper this increase in gold production compared to Q2 2024 was driven by planned higher feed grade at Rainy River partially offset by lower plan feed grade.
Travis Murphy: Costs will continue to trend down throughout the year as production increases. NUAPN delivered an excellent order as the B3K continued to over-deliver compared to the plan set out at the beginning of the year. As a result, New Afton achieved an all in sustaining cost of negative $537 per ounce after considering the copper credit. Rainy River delivered on plan as a mill transitioned from low grade stockpile material to processing higher grade open pit ore. All in sustaining costs were $1,696 per ounce in the quarter, a substantial improvement compared to the first quarter.
New eitan Consolidated all in sustaining costs. For the quarter were 1,393 for gold Downs. On a byproduct basis in line with Q2 2024, but a substantial improvement, over the first quarter of 2025.
Costs will continue to Trend down throughout the year as production increases.
New happen. Delivered an excellent quarter as a B3. Cape continue to overdeliver. Compared to the plan set out at the beginning of the year.
As a result new aen achieved, an all-in sustaining cost of negative 537 per ounce. After considering the copper credit Rainy, River, delivered on plan. As a mill transition from low-grade stockpile material to processing higher. Grade open pit or
Travis Murphy: Costs should continue to trend lower throughout the year as production ramps up.
All-in sustaining costs were 1,696 per ounce in the quarter, a substantial Improvement, compared to the first quarter.
Travis Murphy: Our total capital expenditures for the quarter are approximately $92 million, with $34 million spent on sustaining capital and $58 million spent on growth capital. At New Hampton, sustaining capital is primarily related to mobile equipment, while growth capital primarily related to construction, growth, mine development, tailings, and machinery and equipment. At Rainy River, sustaining capital is primarily related to open pit stripping and tailings facility expansion, while growth capital related to underground development, machinery and equipment.
Cost should continue to Trend lower throughout the year as production ramps up.
Our total Capital expenditures for the quarter are approximately 92 million with 34 million spent on sustaining capital and 58 million spent on growth capital.
I do apt and sustaining capital is primarily related to mobile equipment. While growth Capital, primarily related to construction growth, Mine Development, tailings, and machinery, and equipment.
At Rainy River. Sustaining capital is primarily related to open pit stripping and tailing facility expansion while growth Capital related to underground development and machinery and equipment.
Travis Murphy: Turning to the assets. Starting with New Afton on slide 7. New Afton delivered another strong quarter. The B3 cave continued to over-deliver and C-Zone ore production continued its ramp up following commercial production and Crusher commissioning early in the fourth quarter of 2024. Through the first six months of the year, production represented approximately 54% and 49% of the midpoint of guidance of 60,000 to 70,000 ounces of gold and 50 to 60 million pounds of copper respectively, higher than the first half guidance provided in February due to the B3 outperformance. The B3 cave is now expected to exhaust in the middle of the third quarter, and annual production is expected to be in line with the guidance profile previously provided.
Turning to the assets.
Starting with new aeon on slide 7. New atom delivered, another strong quarter, the B3 cave, continue to overdeliver and sea zone or production continued, its ramp up following commercial production and Crusher commissioning. Early in the fourth quarter of 2024,
Of the Year production represented, approximately 54% and 49% of the, midpoint of guidance of 60,000, to 70,000 oz of gold, and 50 to 60 million pounds of copper respectively, higher than the first half, guidance provided in February, due to the B3 outperformance.
The B3 cave is now expected to exhaust in the middle of the third quarter.
Travis Murphy: With increased production at lower cost, New Afton generated an impressive $33 million in free cash flow.
and annual production is expected to be in line with the guidance profile previously provided
Travis Murphy: while continuing to complete the construction of the C-Zone Block Cave. Through the first half of 2025, New Haven has generated over $85 million in free cash flow. In terms of development, the C-Zone cave construction continues to advance on schedule. Undercutting was completed in May, which consisted of the last stage of production blasting and mucking. and was a significant milestone achieved in the development timeline. Cave construction progress is 64% complete as of the end of June.
with increased production at lower cost, new atton generated an impressive 33 million in free, cash flow.
While continuing to complete the construction of the sea zone, block cave to the first half of 2025, new aen, has generated over 85 million in free, cash flow in terms of development. The c-zone cave construction continues to advance on schedule undercutting was completed in May which consisted of the last stage of production, blasting and mocking.
Travis Murphy: Season remains on track to ramp up to full processing capacity of approximately 16,000 tons per day beginning in 2026.
And was a significant Milestone to achieve in the development timeline cave. Construction, programs is 64% complete as of the end of June.
C's own remains on track to ramp up to full processing capacity of approximately, 16,000 tons per day. Beginning in 2026,
Travis Murphy: Turning now to Rainy River on slide 8. Gold production in the second quarter was 61,600 ounces of gold at an all in sustaining cost of $1,696 per gold ounce sold. The first six months of production represented approximately 34% of the midpoint of guidance of 265,000 to 295,000 ounces of gold, slightly behind the first half guidance of 37%. This is driven by a one week delay in the sequencing of the higher grade open pit material in May, which led to an increase of approximately 5,900 ounces of gold in circuit inventory at the end of the quarter.
Turning now to Rainy River on slide 8.
Gold production in the second quarter was 61,600 oz of gold at an all-in sustaining cost of 1,696 per go down. Sold
The first 6 months of production represented, approximately 304% of the midpoint of guidance of 265,000 to 295,000, oz of gold slightly behind the first half guidance of 37%.
This is driven by a 1-week delay. In the sequencing of the higher grade. Open pit material inmate.
Travis Murphy: What this effectively means is we mined and process the 5,900 ounces, but we're unable to pour it into our final product by the quarter end, which would have translated to a consolidated production of approximately 84,000 ounces of gold. Production was substantially higher than the first quarter as we successfully transitioned from stockpile ore and started processing the higher grade open pit ore. As Ankit mentioned at the top of the call, June was a record production month with over 37,300 ounces produced. at an average rate of 1.44 grams per ton. The mill also demonstrated the ability to process higher grade material at high throughput rates, with over 40% of the days in June processing over 30,000 tons per day.
which led to an increase of approximately 5,900 ounces of golden circuit inventory, at the end of the quarter,
What this effectively means is we mined and processed the 5,900 Oz, but we're unable to Port into our final product by the quarter end which would have translated to a Consolidated production of approximately 84,000 oz of gold.
Production was substantially higher than the first quarter as we successfully transition from stockpile or and start processing the higher grade open pip.
Or.
As an mentioned, at the top of the call, June was a record production month with over 37,300 Oz produced.
At an average grade of 1.44 grams per ton.
The mill also demonstrated the ability to process higher grade material at high throughput rates with over 40% of the days in June processing over, 30,000 tons per day.
Travis Murphy: As a result of the increased production, Rainy River generated a quarterly record $45 million in free cash flow.
Travis Murphy: Following the successful breakthrough of the PIP portal in early April, the Rainy River underground mine achieved another important milestone with fresh air raised commissioning and the completion of the ODM East ventilation loop. Underground development and stow production from several new mining zones can now progress as they come online in late 2025.
As a result of the increase production Rainy, River generated a quarterly record 45 million dollars in free, cash flow.
Travis Murphy: To sum up, we made excellent progress in the second quarter and remain on track to deliver our 2025 stated objectives.
Following the successful breakthrough of the pit portal in early. April the Rainy River underground mine achieved. Another important Milestone with fresh are raised commissioning. And the completion of the odm East ventilation Loop underground development and still production from several new mining zones can now progress as they come online in late 2025
Keith Murphy: With that, I'll turn the call over to Keith. Thanks, Travis.
To sum up, we made excellent progress in the second quarter and remain on track to deliver our 2025 stated objectives.
With that, I'll turn the call over to Keith Keith.
Keith Murphy: Our financial results can be found on slide 10. Second quarter revenue was $308 million, higher than the prior year quarter due to higher gold prices and gold sales, slightly offset by lower copper prices and sales. Cash generated from operations before working capital adjustments was $161 million, or $0.20 per share for the quarter, higher than the prior period, primarily due to higher revenue. New Gold generated a record quarterly free cash flow of $63 million as higher revenue was only partially offset by the higher capital expenditure as key growth projects were advanced. The company recorded net earnings of approximately 68 million or nine cents per share during the second quarter.
Thanks Travis.
Our financial results can be found on slide 10.
Second, Slaughter Revenue was 308 million higher than the prior year quarter due to higher gold, prices and gold sales, slightly offset by lower copper prices and sales.
Cash generated from operations before working capital adjustments was 161 million or 20 cents per share for the quarter higher than the prior period primarily due to higher revenues.
New gold generated record, quarterly free cash flow of 63 million. As higher Revenue was only partially offset by the higher capital expenditure. As key growth projects were advanced
Keith Murphy: After adjusting for certain other charges, net earnings was $90 million or $0.11 per share in Q2.
the company recorded, net earnings of approximately 68 million or 9 cents per share during the second quarter.
Keith Murphy: Our Q2 adjusted earnings include adjustments related to other gains and losses and other non-reoccurring items. Turning to our balance sheet on slide 11. At the end of Q2, we had cash on hand of $226 million and a liquidity position of $452 million. Post Water, the remaining $111 million of the 2027 senior notes was redeemed, as planned and previously announced, and paid for with cash in hand.
After adjusting for certain other charges, net earnings was 90 million or 11 cents per share in Q2.
Our Q2 adjusted earnings included, adjustments related to other gains and losses and other non-recurring items.
Turning to our balance sheet on slide 11.
Million and a liquidity position of 452 million.
Keith Murphy: In order to fund the new Afton buyback transaction announced back in April, $150 million of the credit facility was drawn in the quarter and a gold prepayment was entered into in mid-April. The company has agreed to deliver approximately 2,770 ounces of gold per month over the July 2025 to June 2026 period at an average price of 3,157 per gold ounce.
Post quarter the remaining 111 million of the 2027, senior notes was redeemed as planned, and previously, announced and paid for with cash in hand.
In order to fund the new app and buy back transaction announced back in April.
150 million of the credit, facility was drawn in the quarter and a gold. Prepayment was entered into in mid April.
Keith Murphy: To sum up, we are in a very healthy financial position with a significant free cash flow profile ahead of us.
The company has agreed to deliver approximately 2,770 ounces of gold per month over the July 2025 to June 2026 period at an average price of 3,157 per gold outs.
Unknown Executive: With that, I'll turn the call back. That is eight Touching on this person briefly, I'm on slide 30. The new Afton Exploration Program centered on Keyzone and nearby targets is currently at an all-time high, with one surface drill targeting the Keyzone trend along strike and six underground drills actively targeting the core of the zone and testing its footprint. With the T-Zone level exploration drift complete and the Lift-1 level being completed last year, we now have two distinct exploration drifts separated by more than 4 meters in elevation to better explore and fill T-Zones. At Renewaver, the company is advancing open pit and underground exploration in parallel.
To sum up, we were in a very healthy financial position with a significant free cash flow profile ahead of us.
With that, I'll turn the call to 5.
108.
Watching on this portion, briefly I'm on slide 30.
The new office on exploration program centered on tism and nearby Targets. It's currently at a hotel, an all-time high with 1 surface drill targeting. The keys on Trend, along strike and 6 on the ground drills, activity targeting, the core of the zone and test testing its for bread with the seizoen level expression, drift complete in the left, 1 level of dream completed last year. We now have, we now have 2 distinct explosion, drips subread by more than 4 m.
In elevation to better, explore, and infill T-Zone.
Unknown Executive: During Q2, this includes drilling the northwest trend open pit zone to infill part of the inferred resources and test potential pit extension. Exhibition building also focused on testing underground ore growth opportunity at ODM main front surface. We continued our work on open pit expansion studies with the goal of keeping the mill free to utilize for longer. and Sean's studies on online design and extension also continue to make progress. As I've said previously, we expect continued and significant growth in gold and copper production over the next three years. The second quarter performance was an excellent indication of the expected trajectory to come.
After whenever the company is advancing open pit and undergo explosion in parallel.
During Q2 this include drilling the Northwest Trend open pit Zone to infill part of the inferred resources and test potential pit extension.
Expiration drilling also focused on testing a level of growth opportunity at odm Maine from surface.
We continue our work on open pit, extension studies with the goal of keeping the mill fully to utilize for longer as shown studies on environment. Designation, also continued to make progress.
As I have said, previously, we expect continued and things can grow and gold and copper pollution over the next few years. The second quarter performance was an excellent identification of the expected trajectory to come.
Unknown Executive: As production volumes increase, the unit cost per ounce of gold is projected to decrease subsistently. As a result, we continue to expect to generate significant free cash flow over the next three years. at Current Consensus Committee Price. This translates to approximately 1.86 billion U.S. In pre-cash flow over that period, at current spot prices, the figure exceeds $2.5 billion, over 70% of our market cap.
As pollution volumes increase, the unique customer also of gold is projected to decrease substantially.
As a result, we continue to expect to generate significant free, cash flow over the next 3 years.
At current consensus commodity prices.
Unknown Executive: In closing, the second quarter was positive for New Gold as we continue to deliver on our stated strategic goals. We will continue to build on these goals from here. This includes delivering on 2025 election in good guidance with the same attention to health and safety. Our continuous improvement with our preferred performance is a direct indicator of the support from our employees and colleagues for the courage of the caricature. At New Harpin, we will ramp up C-Zone in advance of the development of East Extension. At Rainy River, we will continue to ramp up the underground main, mining phase 4, and advance phase 5 open pit development.
This translate to approximately 1 point, it is 6 billion US and free cash flow over that period at current spot prices. The figure exceed 2.5 billion over 70 to 70% of our market cap.
In closing, the second quarter was positive for new gold, as we continue to deliver on our student strategic goals.
We will continue to build on these goals from here.
This include delivering on 2025 production in Cut, Guidance with the same attention to health and safety.
our continuous improvement with our trip for performance is a direct indicator of the support from our employees and colleagues, for the courage of the Care culture,
That new app and we will ramp up soon in advance, the development of East extension.
Unknown Executive: Lastly, we are continuing to increase our exploration efforts at both sides with a combined $20 million of investment for 2025, targeting for third reserve replacement.
Our training River, we will continue to ramp up the integral main mining phase 4 and advanced Space by open pit development.
lastly, We are continuing to increase our exploration efforts at both site with a combined, 2 million dollars of investment for 2025, targeting for to reserve replacement,
Unknown Executive: New Gold offers a compelling investment opportunity with increasing production and simple and free cash flow generation combined with our safe, well-established mining jurisdiction. Increasingly compelling exploration upside and exposure to what we view as prefer metal and gold and copper. We were confident in our ability to deliver additional. The remainder of 2025 will continue to build from here, both operationally as well as project and exploration candidates, which is expected to create meaningful value for our shoulders and provide increased financial flexibility and optionality for New Gold moving forward.
New gold offers a compelling investment opportunity.
With increasing production and simpling free cash flow generation combined with our safe. Well established mining rejection.
Increasingly compelling, exploration outside and exposure to what we view as preferable in gold and color.
We were confident in our ability to deliver additional website.
The remainder of 2025 will continue to build from here.
Both operationally as well as project next version Catalyst, which is expected to create meaningful value. For our shoulders and providing increased Financial flexibility in optionality, for new goal moving forward.
Unknown Executive: This completes our presentation.
Unknown Executive: I will now turn it back to the operator for the Q&A portion of the call. Shall we? Thank you.
Jean-Louis: If you have a question, please press star 1 on your telephone keypad. If you wish to remove your... Star One again.
This completes our presentation, I will now turn it back to the operator for the Q&A portion of the call Charlie.
Jean-Louis: One moment, please for your first.
Question.
Lawson Winder: Your first question comes from the line of Lawson Winder of Bank of America. Your line is open. Thank you very much, Operator. Hello, gentlemen. Thank you for the update. today.
Your first question comes from the line of laws and Winder of Bank of America. Your line is open,
Unknown Executive: Can I please start off by asking for a little additional color on the split in production between Q3 and Q4. 4 of 2025. So we're mostly in Q3, Q4. We are targeting to have the same portion mostly. Is that consistent across both Rainy and New Afton, in terms of gold? Yeah. So in terms of gold, it's mostly yes. Rainy will generate the majority of the cash because we produce a lot of gold as planned, and we're ramping up New Afton. So we'll exhaust the B3 cave and we will ramp up C-Zone. And C-Zone, so we still target to produce the metal that we forecast in the guidance.
Uh, thank you very much, operator. Hello gentlemen. Thank you for the update. Uh today, could I please start off by asking for a little additional color on the split in production between Q3 and Q4 of 2025? Thank you.
So, we're mostly in Q3 Q4, we are targeting to have the same pollution mostly.
Is and is that consistent across both rainy and, uh, new Aston in terms of gold? We have. Yes, in terms of gold is mostly, yes, rainy will will generate the majority of the, of the cache because we will will produce a lot of of gold as planned. And we're ramping up, uh, new at. So we'll exhaust the D3 cave, and we will rent boxes on and as, and see on the the so, we still Target to produce the metal that we forecast in the guidance.
Unknown Executive: Okay, with regards to reserves and resources, just looking towards year-end. First of all, I guess just generally, do you expect to replace reserves in 2025 and then a little more specifically with the Northwest trend resource conversion to indicated, do we expect that to show up in reserves and resources? And then just thinking about gold price assumption, year-end 2024 was $1,650, we're nearly double that now, $1,980 I think you guys used for resources.
Uh, okay. Um, with regards to uh, reserves and and resources, uh, just just looking toward year end and
Unknown Executive: How are you thinking about a gold price assumption for calculating reserves and resources at year-end? Yeah, so first, in the In terms of in terms of new often in terms of reserve a new role, we are target for this year, as we discussed, was to increase our indicated resources, ultimately to produce a probable reserve or feasibility study that the main purpose is to have the sufficient drilling ground to convert resources and reserve and studies in 2026. So that's what we plan for in terms of concerning the Rainy River. The intent is to define, complete the definition building to pre-classify Northwest trend and to transfer that in reserve.
Um, first of all, I guess just generally do you expect to replace reserves in 2025 and then and then a little more specifically with the Northwest Trend. Uh, resource conversion to indicated. Do we expect that to show up in uh, reserves and and resources? And then just thinking about gold price? Assumption year, end 2024 was 1650. Where nearly double that now 1980? I think you guys used for resources. Um, how are you thinking? About a, a gold price assumption for calculating reserves and, and resources at your end?
yeah, so first uh, in
the, in term of the,
In terms of new options in term of reserve a new role, we are Target for this year as we discussed was to increase our insulated, resources and timely to produce.
A probable Reserve or visibility study that. That's that's the main purpose is to have the sufficient drilling grid to convert resources and reserved and studies in 2026. So it's what we plan.
for, in concerning the, uh,
Rainy River. Uh, the intent is to to Define complete the definition building to 3 classify Northwest trend.
Unknown Executive: So it's our objective. And also we have some excellent targets on the ground that we will, as we explained in February, is our objective is to increase reserves on the ground where we plan to already, we already plan to have infrastructures to reduce the capex and increase the NAV for the company. And actually it's what we are doing.
And and to transfer that in reserve. So it's our objective. And also, we have some excellent Targets on the ground that we will, uh, as we explained.
uh, in in February is our objective is to uh,
Unknown Executive: So I don't think that at Rainy River to be objective and rational that we will renew the totality of what we mined, but we will, it will be a significant for us. It's mainly, so for one thing.
Unknown Executive: Second thing concerning the The gold price every year we're benchmarking of our peers what our peers are doing so it's where it's not coming out coming from from for the corner office so obviously we're going to use this price but basically for sure with the current consensus the price for reserve calculation outside people well we have a high probability that it will increase so maybe turn around 1900 to 2000 probably it's something that is actually the trend that the industry is looking at so but basically it's uh it's what we'll look for but when you're at at the 20 reverse so it's going to it can provide some value for sure Okay, thanks for that.
Increase reserves on the ground where we plan to already. We already plan to have infrastructure to reduce the capex and increase the nav for the company and actually, it's what we are doing. So it's, uh, uh, um, I don't think that that, when you revert to be objective and rational that we will renew the totality of what we mind, but we will, it will be a significant for us. It's been the so for 1 thing. Second thing concerning the, uh,
The gold price. So every year with benchmarking of our peers, what our peers are doing, so it's uh, it's not coming out coming from, from, for the corner office, or August here. We're going to use this price.
But basically, for sure, with the current consensus, the price for for Reserve calculation. So slightly, but we have a high probability that it will increase. Uh so maybe turn around 1900 to 2,000, probably it's something that is actually the trend that the industry is looking at
So, but basically it's, uh, what we look for, but when you're at at, at 20 reverse, so it's going to, it can provide some, you can value for shoulders.
Unknown Executive: And if I could just squeeze in one more questions, thinking about your capital allocation priorities, vis-a-vis the very strong expected inflection higher in free cash flow. Is there any thought to being active or putting in place a buyback, thought about a dividend, where are the priorities vis-a-vis those two options in debt repayment, and then if you could just comment on your thoughts on acquisitions, so does it remain a strategic objective to add a third core asset? Thank you.
Okay, uh, thanks for that. And if I could just squeeze in 1, more question, just thinking about your Capital allocation priorities, uh, Visa V the, uh, very strong expected. Inflection higher in free cash flow. Um, is there any thought to, um, being active or, or in, um, putting in place a buyback. Uh, thought about a dividend where are the priorities Visa V? Uh, those 2 options and debt repayment. And then, if you could just, uh, comment on, um, your, uh,
Thoughts on acquisition. So so does it remain a strategic objective to add a third core asset? Thank you.
Ankit Shah: Hey Lawson, it's Ankit. No, shareholder returns are definitely something that we evaluate. In the near term right now, I guess Keith mentioned, we ended the year with just over 200 of cash. Subsequent to quarter, we paid down the debt from the original bond offering. So bringing down our cash balance, we still have $150 million on our credit facility that we expect to pay by the end of the year. And we are also ramping up two significant projects with the C-Zone, the underground main, sorry, the underground development plus our exploration program is also back half-weighted. So I would say for 2025, our focus is very internal and organic.
Ankit Shah: And as we hit this free cash flow inflection point and kind of come towards the end of the year, that will be something that shareholder returns will be definitely top of mind.
Unknown Executive: In terms of M&A, I think as Pat's mentioned on previous calls, I think we did our best transaction with a consolidating new Afton over the last year, able to consolidate an asset that we own at sub-one times NAV in a rising gold price environment. We will continue to evaluate other opportunities, assuming they improve the profile of new gold based on our internal criteria. So that's something that we always evaluate, but will be very prudent in our M&A strategy. Okay, fantastic.
A 2 significant projects with the season and the underground main uh sorry the underground development plus our exploration program um is also back half weighted. So I would say for 2025 our focus is very internal and organic. Um, and as we hit this free, cash flow, inflection point and kind of come towards the end of the year. Um, that will be something that Cheryl returns will be definitely top of Mind in terms of m&a. Um, I think it's Pat's mentioned on previous calls. Um, I think we did our best transaction with a consolidating, new eitan over the last year, able to consolidate an asset that we own at sub. 1 times nav and a rising Google price environment. We will continue to evaluate other opportunities, um, assuming they improved the profile of new gold, um, based on our internal criteria, so that's something that we always evaluate but we'll be very prudent in our m&a strategy.
Unknown Executive: Thanks very much, guys.
Okay, fantastic. Thanks very much, guys.
Michael Siperco: Your next question comes from Michael Siperco of RBC Capital Markets. I think thanks very much, guys.
Your next question comes from line of Michael superco of RBC Capital markets. Your line is open.
Unknown Executive: Quick question on new Afton with the B zone being extended. Can you just clarify on how we should expect the transition to primary C zone mining to go and Is there a transition period or should we just see a smooth uptick in throughput and grade and sort of when does that that manifest in the second half? In turn, a lot of the. So this year... You know, for us, we are really pleased by what is happening in B3, because it's the result of the disciplined drama management of the decade that we are having in front of us.
Yeah, thanks. Thanks very much. Uh guys. Uh, quick question on new aft. And um, with the bone being extended can you just clarify on how we should expect the transition to primary seizoen mining to go? And is there a transition period or, or should we just see a smooth uptick in throughput? Uh, and and grade and and sort of when does that, that man?
Fast uh in in the second half.
Well, in terms of the the so V3 is
Unknown Executive: So we always plan for the worst and wish for the best. And in term, actually, what is nice with the B3 is we all we will reconcile extremely well. And so and we are marking because the dilution is actually is less than expected. So going forward, it's, it's excellent. And the grade is good for us. It just delays his own in term of we will not delete his own sorry, but it will extend the my life of his own by the by the additional coming from B3.
You know, it's for, for us we are really pleased and and buy what is happening at the in B3 because it's the result of the discipline drum management of the cave that we are having in front of us.
So, we always plan for the worst and wish for the best.
And in term actually, what is nice with the B3 is we, we will reconcile extremely well.
Unknown Executive: But we in the beginning of season, I just want to remind you, Michael, that we are it was planned like this. And all the bottom part of season, we localize that to optimize the recovery. So the grade, the average rate is lower than the grade in the in the lower part of season is lower than the average rate of the of the blockade by itself. It's planned. It's what we have in our plan. It's what we plan in the middle middle produce in 2025. And we're sticking to our plan mostly. So basically is what we're not expecting.
Unknown Executive: Due to the good news that we are extending the my life of B3 to change our little production guidance for June 4 2025. We're back. The other thing is to and for us, it's a pros more than a cons. Because the way that we'll accelerate the cave of season, it will be more flat than to be more aggressive in the center and on the wings of the of the blockade. So it means that we'll have a better better drama management looking forward.
And so and we are marking because the delusion is actually is, there's an expected. So, going forward, uh, it's uh, it's excellent and the grid is good for us, it just delays. His own in term of we will not deal with his own sorry, but it will extend the, my life of his own by the, by the additional intelligence that are coming from B3. But we, uh, and at the beginning of season, I just want to remind you to you. Michael. That we are. It was planned like this and all the bottom part of season. We we localized that to optimize the recovery. So the grade the average rate is lower than the, the Grid in the, in the lower part of season is lower than the average grade of the of the, of the blockade by itself. Its plan is what we have in our plan. It's what we plan in the middle middle produce in 2025, and we're sticking to our plan mostly. So, basically is what we're not expecting due to the good news, that we are extending the, my level of B3 to change our work little production guidance for Q4, 2025 with Banga.
Unknown Executive: So it's extremely positive for us to have additional Okay, great.
You have received is to. And for us, it's a prose more than a cons because the way that we'll accelerate the cave of season, it will be more flat than to be more aggressive in the center and less on the, on, on the wings of the of the blockade. So it means that we'll have a better better draw management looking forward. So, it's like, some people, it's it's extremely positive for us to have additional tons from Beach.
Unknown Executive: That that makes sense puts it in good context.
Unknown Executive: One more question for me, if I could, and then I'll pass it on.
Okay. Great. That uh that makes sense, puts it in uh, good contacts. Um
Unknown Executive: On M&A, broadly speaking, I guess the quarterly update, if you can provide one, but with the consolidation of New Afton now out of the way, and also the, I think, substantial organic growth potential at New Afton, which is set to maybe get some more visibility over the next six to 12 months. How are you thinking about growth now versus maybe exiting Q1?
1 more question for me. Uh if I could and then I'll pass it on uh on on m&a. Broadly speaking, I guess the the quarterly update. Uh, if you can provide 1 uh but with uh with the consolidation of of new at and uh now out of the way how and and also the I think substantial organic growth potential at at new atton which is set to maybe get some more visibility over the next 6 to 12 months. How how are you thinking about growth now? Uh versus maybe exiting q1.
Unknown Executive: So first, we did an excellent M&A in Q2 with futures. It's something that we're proud of. And you will understand in the short future why we were so excited to do this to consolidate our own asset. I think it was the best M&A opportunity for us. You know, and, and actually, as my colleague said, we focus on the organic growth first, it's what we can control. And it's where we can generate a lot of value for sure, without a lot of capital to invest. We are remaining active because we're looking for opportunities. We think that with the cash flow that we'll generate, we can create value for shareholders.
So, what if there's a, we did an excellent day in Q2, with teachers, it's, it's it's something that we're really proud of, uh, and you will understand the short future, why we were so excited to do this to consult with our own asset? I think it was the best or best in the opportunity for us.
Uh, you know and um and actually as uh my my colleague said we focus on the organic growth first. It's what we can control.
and it's where we can generate a lot of value for shareholder without without without
A lot of capital to invest. Um, we are remaining active because, uh, we're looking for opportunities uh, within that
Unknown Executive: If we don't create, cannot provide an investment opportunity for shareholders, we'll have to, as Ankit said, we have to return capital to them. But basically, I think we are disciplined.
That will generate we can create value for shoulders.
Unknown Executive: So I'm having my colleagues around me at the table this morning, and we are disciplined, we don't want to be big to be big, we want to be bigger to be better. And so we'll don't want to, we'll work so hard to generate this capital that we are this cash flow that we don't want to put that at risk. So we are diligent in our approach, but we're still we're still still looking, we're still active, and we are vigilant.
If we don't, it cannot provide an investment opportunity for shareholders without to us and can sell to to return Capital to them. But basically, I think we are disciplined.
So I'm adding my colleagues around me at the table this morning and we are disciplined. We don't want to be big to be big, we want to be bigger to be better. And so we don't want to, we work so hard to generate this Capital that we this cash flow that we don't want to put that at risk. So we are diligent in our approach but we're still we're still we're still looking, we're still active and we are legitimate.
Jean-Louis: Thank you. If you would like to ask a question, again, it is star 1 on your telephone keypad.
Anita Soni: Your next question comes from the line of Anita Soni of CIBC. Your line is open. Good morning, Pat and team. Most of my questions have been asked and answered, but I just wanted to understand, on Rainy River, I think you said there was a week delay in some of the high grade material in the open pit. Is the expectation that you'll get that back in the second half of the year? We, yes, so we have, we will, we are still guiding, still guiding to the guidance and so we, we, it will not change our guidance for a year.
Thank you. Uh, if you would like to ask a question again, it is star 1 on your telephone keypad. Your next question comes from the line of Anita Sony FC. IBC, your line is open.
Good morning, Pat and team. Um, most of my questions have been asked and answered but I just wanted to
Any River, I think you said there was a week delay in some of the high-grade material in the open pit is the expectation that you'll get that back in the second half of the year.
Yes, so we have we will we are still guys, we still guiding to the the guidance. And so we we uh,
Unknown Executive: Okay, and so you're still hearing from the sort of middle end or like the original, your expectations are still unpacked is what I'm trying to say. Yeah.
If we, it will not change our guidance for a year.
okay, and so you're still hearing
Sort of middle end or sorry. The like the original, the your expectations are still intact is what I'm trying to say.
Unknown Executive: For this time is what my what I've explained is we produce this on these answers. But you know, we're not able to strip it from the circuit at the end of the quarter. So it's mainly what happened. If not, we're going to deliver what we so it was not in the bar, it was in solutions or badly so. But we expect to have this that would waterfall in in in the second half of the year.
Yeah. So
For this time is what my what driver has explained is we we produce this on these ones.
But you know, we're not able to strip it from the circuit at the end of the quarter. So it's mainly what happened.
Unknown Executive: And then can you just provide an update on what the next deliverables are for the K-Zones, like when you expect to have an update on that? So we want to do an update in the first half of September on all our exploration activities at both sites. And our objective, you know, is that what is interesting in geology is more the drill or the adding value, but our objective is to, as much as we can, to present for the first time and get the inferred resources in Keyzone for the reserve and resource report of 2026.
If not, we're going to deliver what we are. So it was not in a bar, it wasn't Solutions so badly. So but we expect to have this that, with waterfall in in in the second half of the year.
Okay. And then can you just provide an update on what what the next deliverables are? Uh for the K Zone? Um, like when you expect to have an update on that,
So we want to do an update in the first house of September and all our exploration activities that both sites.
Uh, and our objective, uh, you know, is it was a, what is interesting? Geology is more, the drill more, the adding value, but our objective is to to as much as we can to up to, to present for the first time and get it and then further resources and key zone for point the big and for the reserve and resource report of 2026.
Unknown Executive: All right, thanks and congratulations on a strong Thank you very much.
Okay. All right. Uh, thanks and congratulations on a strong result.
Mohamed Sidaid: Your next question comes from the line of Mohamed Sidaid of Citibank. Your line is open. Thanks, Patrick and Tim for taking my question. Just most of my questions have been answered, but just following up on Rainy River and the strong performance in June with the 37,000 ounces at 1.44 grams per ton, can you maybe give us some color into the grade profile into the second half of the year, please? Thank you. Yeah, it's a great profile for the second half of the year. Yeah, so with the transition, you know, to that steady feed grade that we've seen in June, you know, we can expect a similar high profile, a similar grade profile in the back half of the year in order to come into that guidance range.
Thank you very much.
Your next question comes from the line of Muhammad. Uh, Sid died of City Bank, your line is open.
Uh, thanks Patrick and Tim for taking my question. Uh, just most of my questions have been answered but just following up on Rainy River. Uh, and the strong performance in June with the 37,000 Oz at 1.44 grams per tonne. Can you maybe give us some color into the great profile uh into the second half of the year please. Thank you.
Yeah, profile for the signal over the year.
Unknown Executive: The majority of the feed, just as a reminder, is coming from the open pit, and that will bring us in line with the guidance range for the end of the year. Great. Thanks.
Yeah, yeah. So so with the uh transition uh you know to that steady feed grade that we've seen in June you know, we can expect a similar high profile. Um a similar grade profile in the back half of the year um, in order to to come into that guidance range. So the majority of the feed just as a reminder is coming from the open pit and that will uh,
Bring us in line with the guidance range for the end of the year.
Unknown Executive: Well, we can follow up post call as well with with more detailed discussion of the second half.
Unknown Executive: But what we are confident here is There's a, you know, you remember that last year we had some reconciliation issue and we did the new model, what we existed in myself, Jean-Francois and his team, and the mine site, they did a new model and we apply a cap on the high-grade, and so a cap of three grams per ton. And basically, we are, we tested this high-grade zone in Q2 and we reconciled extremely well, so we are extremely confident for the second half of the year. And the second half of the year, we will end the year with a 3 million ton of ore stockpiled at the rim collar, and so of the pit I'm talking about here, and basically the strip ratio going forward would be one-to-one this year in phase four, so we'll be well-positioned to execute in 2D risk.
Great. Well we we could well we can follow up post call as well with the with more detailed discussion of the second half. What we are warner meant. What we are confident here is
Unknown Executive: So it's, now we are, I think that my Travis is coming in the right time, so he's enjoying the ride. Right, so that's very helpful.
Unknown Executive: And then Ankit, for sure, I'll take you up on that offer. Thanks a lot, guys. Thanks, Mo.
If somebody Travis is coming in the, in the right time. So I just enjoying the ride.
Ankit Shah: There are no further questions at this time. I'd like to pass it back to Ankit and the team for closing remarks. Great, thank you very much. And thank you to 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. Have a great day.
Great. No, that's very helpful and then anchored for sure. I'll take you up on that offer. Thanks a lot, guys.
Thanks MO.
Doing your further questions at this time? I'd like it to pass it back to Ankit and the team for closing remarks.
Jean-Louis: This concludes today's conference call you may now
Great. Thank you very much and thank you to 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 have a great day.
this concludes today's conference call, you may now disconnect