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NGD New Gold

Participants
Renaud Adams President, CEO & Director
Robert Chausse EVP & CFO
Anne Day VP, IR
Anita Soni CIBC Capital Markets
Michael Parkin National Bank Financial
Michael Jalonen Bank of America Merrill Lynch
Call transcript
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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the New Gold Fourth Quarter 2020 Earnings Conference Call. [Operator Instructions]. It is now my pleasure to turn the call over to your speaker today, Ms. Anne Day. Ma'am, please go ahead.

Anne Day

good and operator, you, morning, everyone. Thank joining earnings conference for us today quarter fourth Gold's New call for Thanks and webcast.

We present and Renaud CFO. Renaud, a completed, have Adams, CEO; have the our lines for we discuss and today period. with operational been Rob who results. brief will Rob our results, financial will operational QX followed by will presentations the us After Chausse, Q&A open

language attention related today, presentation forward-looking I like to the our the begins forward-looking your cautionary to New in includes team the found respect, Gold. Before commentary In our to statements note forward-looking to detailed you relating to statements regarding would the Today's in this direct presentation. refer cautionary we statements presentation.

and those materially could statements. results future additional in X forward-looking reviewed. You events expressed X implied and are from and Slide information Slide provide that differ or be cautioned should actual

section latest set filings Factors you to refer Risk in in that entitled differ. also material Please certain out on Gold's New cause available are that note factors to actual We U.S. presented amounts could results other and SEDAR, the all MD&A dollars. which

presentation, included end that should number call the more Chausse. a In in Rob notes material and conjunction there be will important of information with in turn now addition, provide reviewed the the I are presented. over to

Robert Chausse

want up something? with open did to Anne. Good morning. you Renaud, Thanks,

Renaud Adams

No, that's fine. Go ahead, Rob.

Robert Chausse

Okay. Good morning.

highlights our our straight QX jumping January Just release. operating year-to-date, for press details Slide provides which consistent production X, and are with into

to New the all-in gold the higher totaling lower production copper grades lower Rainy and The at sustaining quarter Rainy River and ounces sales per consisted compared production gold XX,XXX ounces. higher ounce due due to prior Consolidated quarter amount -- of higher sales is Afton. gold equivalent River. XX.X volume. company production the $X,XXX ounce, Afton, year the River quarter than ounces sustaining of and Operating were expense ounces. million lower from XXX,XXX quarter, and the primarily was equivalent pounds at per prior prior to gold produced from than primarily equivalent costs capital QX, for Rainy year and XX,XXX as gold During New due XX% year XX,XXX to The

XX% X XX.X financial Moving prior our grades. $X.XX realized to Fourth ounces year at higher approximately approximately per ounce Slide the gold quarter by revenue million and million revenue and sales copper quarter of driven price was than results. pounds prices at per was sales pound. higher of XX,XXX of due average to and an $X,XXX $XXX higher of QX metal

per a million $XX.X Our recorded compared working to capital earnings $X.XX loss share flow company $XX was higher higher in share a $X.XX Difference for XXXX. higher fourth driven cost adjusting operating was to of of earnings XXXX. in million other net of lower charges, the quarter depreciation. before prior metal per the $X.XX during or certain QX in to million prices. is compared operating of million $XX the loss or The year $X.XX share per net or $X.XX for quarter, After revenue, share adjustments and quarter, due primarily per the cash per of share $XX.X than net quarter or by QX

River's New our on previously contracts, our Rainy redemption gold stream Our and announced mark-to-market Afton also free royalty. cash price adjustments option of unrealized to QX earnings notes, the adjusted related includes adjustments

on non-GAAP Our discussed MD&A measures has additional details the here.

provides our slide breakdown a Slide our of XXXX expenditures. CapEx. This capital QX X, Moving to

details project related River to structure. liquidity. of development Growth wick tailings we tailing raised advancement in and Our Afton. was At and development million of drains total was XX, New leases mine capital sustaining million, Rainy BX and the the had $XXX at for approximately the spend quarter and X December and dams on cash million was and $XX.X provides work focused our approximately $XXX New capital in Slide at capital at XXXX, Afton. primarily

includes by line the Rainy guidance mine all-in offset production completed hand note quarter, the guidance. due from redemption, of for the XX higher consolidated facility information and million over project Growth per sustaining During the metal, range increase QX, between I year mine, with compared I'll With the to $XXX New the sustaining X.XXX% turn further is a in River capital costs the on C-zone its mine. are $X,XXX is expected prior but to due of leaving extended the million XXX,XXX mine. from underground production releases senior company's on with an operation, refer River. on Afton notes. When XXXX as New to a be our outstanding Afton XX gold consolidated $X,XXX prior to copper cash expected to pounds. primarily at production estimated the by Also requirements Gold provides million the to at equivalent -- lower million development year, lower in primarily compared River. press transactions. balance at Renaud. and XXXX. company is a Rainy costs capital and ranging with Rainy the would those the the those expected expected ounces. lower that, XXX,XXX Rainy back is New to Intrepid related in The the call in the details expecting River you the Slide early to specific fourth $XXX year, be equivalent to XXXX, on production New company the between consolidated cost million prior provide and cash XXX,XXX Afton estimated produce and The Renaud gold basis, ounces, production prior are from XX X to increase ounce to By year and will between XXX,XXX to decline range to credit

Renaud Adams

thank feeling that today. everyone, mixed the trending that a you it's I'm addressing a tragic year Slide I on New Gold at started and including fatality the safety. the with I'm who's health come at than and today. on This the start, us And And The XX% company, significant mine joining And with days, Rob, worked over below years, X,XXX frequencies year represents reductions I the way at along aspect mine. cave milestone an before in Canadian you, Thanks, team, we've The industry. people a health block XX. well-being, way much in general, more looked the Afton operating we've overall a Afton family, one and our to New when New without I New incident the Afton. for New and injuries. so see of safety and the group ended reduced the committed milestone, favorable every a And strong working hours Afton the delivered the very, very at Afton occurred achieved so with at and in as over incidents. tremendous of LTI million frequencies and X.X over New

the have same particular, a Afton learn in like said it This hurts and and main when of adversity, mine we're move climate extremely your what the the back commitment a look commitment. the XX. hit in I we'll positioned understanding fine rush the New is And fatality aspect mixed our first. our how right middle family the turn flow forward to done on an February everything a on it whole to and repositioning as for we And cash the and our a said. milestones we've when And as did going we when it with And to and very always commitment. of increased Slide restructured so will this our sure, remain solid turn occurred was a cash in I success. of creativity people indigenous, part aspect. people. is issues, to it's in health, and River with we New that New safety move and that's the so preserve in environment Afton, free sheet continue I Gold X foundations year and to to solid XXXX did, But it find this on to feet past reduced with understand the all, of on. and it always When we was back mine. because by significant company, and remain back fact, we'll focus and has commitments, a we most, accident. families to and CEO started our as hit only And It hurt on put all cost will overcome we water we like it But value the company. I to end on everything we're positioning while and production, continue We bounce recovery and Slide way. and and an back have where and back. stream a in and of of people move in and comes been well-being this been mixed way, that of it's been focused the It's XX, feeling, and on incident turning derisk it. the I New it's will with achievement assure the family, and at When because going per move hits do mine tremendous and hit our X done you on, tremendous and and the level, from started our and health, that that in balance the of fatality. in But tailings the safety, at on making day, you of whole of in And this. designed. I doesn't every the health single social feelings as much. hard health And everyone We've the and CEO, tragic overcoming way Gold. it's an take how the because very repositioning And and put one to and the environment look on area so same to and the the do, and we've the find this a significant at about resulting the comes way in everything a starting the safety. we end yes, and the away from this see get mine mud moving look story Rainy thing, be we strength the Afton New our on, core been at for And group bright first look at more environmental 'XX a a I everything significant I'm I Family as has balance sheet, people healthy the enter mine liquidity, reduced as we and technical could we We've I the of progress of and it XXXX line and have in the did debt. with at the committed remaining hurts. XXXX, back, XXXX, safety, We're to achieved tremendous

production. the a XXXX, well completed capital a resulted We've on achieved the reducing moving advancing by the deferred on regular capital ended cost, sustaining year more the what of now at below projects the and resulting an at of in and little lower we've the bit effort forward. in sustaining revised the and the to call high all gold done constructions guidance. So and in end of of would lower but costs And AISC all controlling equivalent as cash below I result XXXX unit this look guidance. end our the the capital, sustaining the Tremendous moving

done well mine the future X to Now how way. we're for moving in now last a looking focus, we've positioned the as bright we're quarters, very, the design you Slide to the with to costs the the mill going or very costs. And we're we've made X see XX, focusing in so the operating And at cost our on operational main forward, at asset tonnes with has unit XX-XXX XXX,XXX structure tonnes of positioning we've been also at the by early mine and about even compete that and a of better assessment XX,XXX see extremely could On mine and transformed Rainy, year. mill.

the those tremendous from So assumptions see if at in we've a I and a year, ounce improvement situation, at operational below cash -- of I slightly look equivalent, improvement. mine, the XXX,XXX a the significant over below XXX XX we sustaining Slide the I and equivalent, XXXX, good cost, XXXX, bring and repositioned the this an will at it late in and forward move AISC and COVID I million this outlook to bounced in for cash at significant back while and and capital, flow. XXX,XXX you're ounces reduction $X,XXX margin midpoint, the And is made the our look a looking cost and XX-XXX free below reduction the

first planned higher some little stripping, lower of continue bit on side. of We've the of second about strip understanding to the we'll higher the recovery is will of now into all long 'XX, the mine -- I to is Intrepid mostly can stripping tonnes method within the to back year, full Intrepid would and main be maintenance And from the with grade view good there of and model much XXXX as the And maybe the that mining capital, on and the Phase capacity will stripping. nearly the an accelerate decision to pretty and bring sustaining reductions do development mill extend originally will on Zone. mentioned, to increase, at how in the Very the our the part potentially of plan should accelerate progress and ground second of and Slide The the shift its 'XX. and haul first as and back upside On that Capital But benefit as mining. many XX% with possible to compared year life to the a year. we The fine-tuning significant a there part in ounces average grade higher XX, all reserve basically a II block part basic mine regards lower improve in previous will the 'XX XXXX a of bit of with grade Intrepid mine. see price really but of a the ratio end on used. around, made half the Zone lower as of continue a be could we capacity back transferred on mining be a mine the At spend in plan, kept continue as in strip of I upper Zone, year, tailings underground XXXX, the our will result Intrepid and the here all we tailings in half. Intrepid see we mine all is accelerate and better XXX,XXX you opportunity was an gold reserve of the to figure, for grade lower the the as The ratio. operate projects, higher effort stripping and Zone. be component,

looking beyond that of there as Intrepid will of the at are and the the could only reach plan, plan at being would into but And into -- more see underground a than So life current of significant stage plan, with the 'XX reserve XXXX as milling better provide we the economic portion the To plan, XXXX-XXXX during the was underground. And included potential outside grade the but would incorporated Originally, -- now basically in the moving mine Zone be be in we'll the in reserve, has scenario, included standalone would of study, still you extending mine underground. the current reserve. within amount bringing a study a feasibility as incorporating the as we're a the small whole the Intrepid stockpile period. have earlier Intrepid adjusted is bottom extend course, back. be the at standalone right, whole now be and the the potentially the may back of mine that now of an resources we do so, of life a carrying in

of big the ounces a We've from little come Rainy migrate quarter. a more reserve the and progress significant on deflation this, in as replaced XXXX but at operating around date. from Intrepid is significant the bit Almost of to well, by So it -- the to back pit exploration but River. in open resource mining eventually to continues of upside underground XXXX. On Slide here to fourth launched XX, deflation amount

which before We have will that to intend QX assay the update, release spending. an first or are ramping exploration X,XXX meters up. we complete And be and we late

Rainy Our New as incorporate work result will be will the and all the wrapped well at today Afton. up River

Slide the come exploration on XX. to more on I'm front. So

Okay.

in looking BX lower and of our XXXX within end Afton course, initiate the back zone the equivalent constructions is cost we of XXXX, with of the midrange of to cash New in So engaged, XXXX, construction half so and, the this zone. the development at C-zone. were progress the unit XXXX, of by made of and end the were production. achieving and And towards -- continued. first, in done well cost New Afton end. in the the significant advanced significantly BX the gold our And the zone We've We've the first BX positioned

BX up the overall, construction 'XX, In the extremely of position by the with development. were at the short, BX 'XX, about it were year of to XXXX well. view that the fully to getting Teck we deliver, speed, fully XXX% capital be on stabilization deferred 'XX. of ended front. initiate in some all the mostly was up and we amended continue at C-zone the to the and end now engaged growth the There we're We hard on the the side and of positioned ramp end engaged On tailing But XXXX. around well development, working end were in capital of to the is facilities at that as

So we -- 'XX, enter sorry.

as source Afton not the investigation New So detail picture of of I the we the continue enter On as would lead BX talk XX, sketch while the where Slide provide I we the the incident for the occurred. to XXXX as New XD C-zone. continue will of with I better with or accident, a build on Afton, thought to at

BX decoupling all see, of -- very complete with to at and you get with of recovery could bottom the a BX you has we initiate view well a XXXX. located X The the X, a in X zone. Lift second as C-zone. to activities as the well, development the with as interactions the sticking the no space see, in zone the the the and the fact, has on out mining And down has the is The quite in as most a result, the As capital even in our further small recovery area view the development ready. as to with C-zone the Lift in could with zone of above -- while well Lift plan permitting the C-zone BX resumed space is quarter, deliver and sequence resumed

the So Lift and, remaining pre-incident as it. building marking X XXXX. the to a that general -- view, to year remote remote will and QX, is 'XX. of rest of is first rate. over the zone And is aspects therefore, we the the New where marking, there of will course, recovery the extend the recovery of the the mining the forward ramping the operational, made most in zone for Slide for at likely towards of next XX, the in is is the this assumption extraction half in in stage and X remain On looking Afton and be future. There back up There be week now expect

plan about there basically, the mine a that And mine morning. was limitation is around was released obviously plan is So the a what level. on revised plan, this recovery the mine

in ramping represent would what of by the next probably X,XXX, as is original changed. previously be would from to will up about a be the year. point expect XX%, That a some initiate the expected level day be of some more plan the to stockpile from would A ore average, of on extend little in mining X,XXX So course, basically back replaced and QX was for to the we pre-incident bit BX more tonnes at the XXXX, BX towards tonnes to tonne. X,XXX hasn't as the now to day. second the the surface the XX% thought XX% incident, XX% to and, therefore, And but represent quarter recovery and year. X of And rate disclosed, the with around Lift ramp expected of

far all in sustaining In in terms it of as be we're all expect work we the derisked the first side, phase it's lot we On of production. increased the capital put on year bottom because right this development been capital capital figure. the growth the projects, and BX end at to XX, now the more on complete And the Slide C-zone fronts, XXXX. has C-zone a and engaged of from so about Creek significantly exploration by Cherry done of

and We assaying pending. I awaiting we first be to update -- as by a said, the the should lot And story an positioned quarter. end in a exploration, of of are release we'll interpretation

angle XXXX C-zone from delineation some mostly be that continuity of when picking actively up to in of we and place, I will bit the the there underground from exploration have but the around depth. work for a SLC to Meanwhile, continue down area, is 'XX as C-zone looking the XXXX. new but to better that Creek going it's the -- say well, at We program of Cherry with be more fair ramp taking focused underground really potential around more think it's we'd

to update Thank our it pass operator plan and formal back call, session. the complete Q&A the in the On of the for most come that, late will part to QX. for So that you. more exploration I'll

Operator

[Operator Instructions].

from question CIBC first Soni Markets. Anita comes from Your World

Anita Soni

River. on quite range, that range for numbers the of Rob and and New -- on wide the wondering There's Rainy that a provided a Renaud, New Afton. particularly and I'm you've Afton bit capital about a both just

like what amount? So spend range cases would in understanding, me just that a spend lower an is you give can would in why what you Like cases amount, there? you the higher

Renaud Adams

Well, Rainy for some experienced accelerate right, as River, instance, -- we you where to were capital a is for in there X-year position 'XX, instance. the XXXX for so in see like Afton New project project, is at we

performance. And so the at is and average you always stabilization all we control. our well. look than lot the -- as generally you but in we on those to X and maybe you sometimes line improve XXX% planned. because equally And you COVID because doing important, have so room and on is We're of occur Afton, development, are Afton case-free New or make on don't over there on and most you productivities there Rainy based estimate we're and out a more of do But some as New we could performance speak. based speaking, more you it very that -- want about around, time made activities we a possibility aspect years, maybe And development where your well advance there

so with it being around well. how perform Rainy we a room tailings, the flexibility to could is in well. depending we of have one. there want to looking So price some somewhat gold River should maybe -- on aspect a but pit mid-range and -- focused bit feel the we comfortable have a set bit we increase good of as of the how what thought goes Maintenance-wise, operate achieve, more is on we some there's better so handle we at is we as forth, aspects. bit that the it reaccelerate can a so Stripping-wise, guidance

if the our that, to capital, proper we there you comfortable down behind, or would feel would Anita. thinking achieve, we perform probably mid-range room bit. I something should of that us have better be at slowing it's where a So out maybe And be look again, say the but

Anita Soni

this was positive? Or on wondering Yes. as flow sort I'm an cash had go most year you do maintain think, that capital flow I people if part or you eye hitting inflection of of not just planning. are any to focus expected free negative? free really cash point, to you have of allocation, kind whether Like trying

Renaud Adams

apply about X,XXX. million, beside the of Rainy today, price It's an in you XX CAD slightly the below CAD XX all you million look AISC the if River it, the accelerating Intrepid, to you're at but

will free cash it's this for lot Artemis significant So margin, of year right, second we flow. the then. have payment as a and And a bring well

So yes, we don't that happening remain prices. what's the confident be. well. will very We all metal control Again, as we copper know the with

Afton flow all to X second and we New can the the be from Anita close I current New about cash definitely, Afton, to globally, do at benefit doubt. the and over we're payment? at cash have no So neutral self-funded But Rainy and targeting free flow year. a and years, approach when we look the is work achieving the all, prices the this

Anita Soni

just another for G&A us your then milling, an is typical technical mining, more idea assets. of of costs of you question both can those hitting me And where Okay. give are

Renaud Adams

Rainy a remains it but for say basis. instance, at when a looking have say I would if have XX-XXX, to right don't we at handy the and at, this where year-by-year on would shown plan for our River, now, I Rainy. you're very look you're looking the good year, reference I it you comes

New of new the a situation plan. considering Afton bit a different is

be we you should would year-by-year, XXXX. So the unit as yes, be situation, reference a we current cost in XX-XXX on but on higher again, feet our back use if the

to please the So but refer have don't the XX-XXX. I answer,

Anita Soni

that for you unit mucking. then cost, the And New as on remote little said the bit would Afton, Sure. be on -- a mentioned I you noticed

rate looks bit only what by side, it's then lower than because were that XX%, So like also the little processing XX%. I about last year. a a was pushing is increasing little the you And processing

you it bit if little of... a -- -- the higher less So side is similarly, bit took on that a little ratio

Renaud Adams

at of Lift on the productivities unit again, There obviously, once were basis, your Fuel-wise, let's to when -- X,XXX, X,XXX, XX-XXX, I a X,XXX the the impact -- global unit all still originally incident think mucking the than on when to a zone have plan for we But say, of, X better there. feet a mucking and impact, an achieve recovery unit do unit, -- remote more and yes, tonnes ramp-up in back BX on the than it's term planned. planned in downtime, and course, is supposed we planned usually at you're globally. second of It's impact very cost, reference half, So strong. manual on right? an feel is and at day, do could what we you the there a you

So the close we'll happening some on what's unit in a impacted underground we'll of result very a bit But unfortunately, be as aspect. for cost there. our be

Anita Soni

And for capital the try QX. in spend. then kind Typically, really sort quarters up to that of? people underspend be we and is should last it me QX weighting in of the tend question any aware there Is to between of make

I'm that, there we curious QX. Afton if to outside is be pared is of? just -- anything spread But obviously, in things an there aware back of it's Or So you're be at. that should looking even New had

Renaud Adams

No.

aspect but ramp happen up New well. think And as Afton other we than say, every going our of I stronger. will no, obviously, the to be but think from our definitely, addressing, you guide the is that, QX, disclosure QX, And QX, addresses as disclosure second there. I what's half

Operator

[Operator Instructions].

Mike next comes from from Parkin Your Bank. National question

Michael Parkin

your permit the Rainy, on you're bumping On limit up processing. against

can Are you're mining revised? any what shed there? about of indicated looking -- you of kind -- that terms better details terms the to into there favorable If can As Is lower in into of also thinking an kind permit the us just you scenario there in half, it of strip grades. update give where second you're limit? get you're you a and you've more moving

Renaud Adams

initiated. course, the somewhat was conversation Of

we peak, the you can every not And we day. at Mike, from If look I'm to what I peak XX, up we're peaking mean, is XX can right? XX. saying average

downtime to XX, Of in more we've life for not as you course, attached a it the the hardness. of But take where the a depends well. row to X mine and then this speaking, quarters have been little generally you surpass

peak life mine shorting we the the could and as -- the eventually in and that would the the of reducing possible. the not do So important the expanding is continue say, capacity to, and progress let's life extend to average between also mine. of be so something mill be XX% Very expand

because this all profitable, to more is stakeholders, including about which more also this the whole region, it's but and us important 'XX very enterprise for important government. So being continue in efficient, very grow exercise to in us is everyone the and to

the effort So exercise. bit, extending kind whole life mine to back to to as a more of this underground There of the bring had captured linked has maybe in increase well and it's it of conversation well. but well be is all be to a as

And so see we'll where goes. it

Second may the year half be a stretch. of

potentially how the is go to it. and whole we think thing to of this optimization after fully want going understand I you then reshape

Does advance that could if in it in the but in talking? a Maybe. the So milling And see exercise. a permitted capacity, will, any how conversation be more expecting second the deserve I'm we increase you as not half, 'XX of we'll 'XX.

Operator

Your from Mike of next from Jalonen question Bank comes America.

Michael Jalonen

to stream. Franco, phone thinking so it sold? production. Do Renaud, buyers? haven't royalties moving they Is I'm something on million a up you numbers, that of and sure that'd just your a $XX have probably you production bunch what to of in I royalties have IAMGOLD net noticed on is that for stream wondering you're which be and, forgotten just sold Blackwater, Rob obviously, guess,

Renaud Adams

without We're be could definitely more if out not questioning ourselves a specific. we buyer there

Artemis, project Canada, on you to the I be at on where way own in developed. Blackwater the solid think, stream definitely, as look we its

so And the interest. we understand

team did this XXXX $XXX so forth, and will, million be think with to Rob unbelievable the long-term the XXX the liquidity maintaining in that. and to and sheet restructure debt of cash, job you repaid, the set 'XX. if in balance only an cash company all and Basically, I whole

you the any this sold, monetize strategic in is payment sold be need as build our very from will, those. term Blackwater. forward portion is stream year. So of move no? a question we it more retained more if And you do value on we equity or a some how And it and all always We on there would for us, and to short pipeline and

the this But in We repayment. for see and to increasing you flow some need to preference stream repositioning it, eventually value for stream something over interest it. with the we hard use own the than more this you though this be the progress be some think would So more very debt course, work little accelerate time. could the and ask pleased solid with strategic on would out of, But but And pleased sell there road, just us maybe, Artemis, if that not stream company cash me, we're of a I this. even I and is repayment. the say, to monetize down would have debt no very there, any represents my very, we're of build and free sake very we about strategic for

Operator

this I to back call I don't see the time. any turn questions further like at to Anne. would over

Anne Day

joining for operator. you, us Thank Thanks, everyone, today.

reach feel today's again. should you questions or free require have But always, any additional out. call. more completes As to Thanks please information, that

Operator

concludes Ladies for conference today's this you Thank participating. and call. gentlemen,

You may now disconnect.