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NGD New Gold

Participants
Renaud Adams President and Chief Executive Officer
Ankit Shah Vice President, Strategy and Business Development
Robert J. Chausse Executive Vice President and Chief Financial Officer
Anisha Soni CIBC
Call transcript
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Operator

Good morning. My name is Sylvie (ph) and I will be your conference operator today. Welcome to the New Gold's Second Quarter 2021 earnings conference call. 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. there a remarks, session. speakers the will Question-and-Answer be After [Operator Instruction]. like And and conference to over would Business to Strategy the of turn I VP Ankit Development. Shah, go Please sir. ahead,

Ankit Shah

you good XXXX Quarter Conference Call and you, Gold's Earnings Thank Webcast. us for New joining everyone. Sylvie today We and morning, Second appreciate

Renaud homepage today please follow CEO, along the President webcast, and at you Rob the line Adams, Should to On Chausse, in wish our from sign newgold.com. we have and our CFO. with

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

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

the Factors We which you entitled other material out available on results differ. in MD&A latest factors also and certain to to New set cause SEDAR, Gold's actual filings refer section that Risk

be the that turn of addition, number in endnotes In there and over to provide call reviewed the material with should are important conclusion presentation, conjunction presented. of I information now a at the the will Rob? Rob.

Robert J. Chausse

press highlights Production details QX. release. for are morning. operating our Thanks, our good with July provides Ankit, production X Slide consistent

sustaining Afton to River tons quarter approximately XXX,XXX production copper XX,XXX for Operating pounds Higher at and and produced received primarily is totaling for equivalent New and Rainy in Company million the the as expense ounces Afton. a the New the grades Afton, were X,XXX planned approximately increased of subsidy due Consolidated dollar consisted ounces the as Canadian quarter QX, gold strengthening costs prior-year and ounce, Canadian XX.X quarter primarily to per per from gold New compared period. higher The to due ounce operating to Capital XX,XXX equivalent and During costs expense Rainy ounces. quarter gold equivalent the was ounces. the gold at at wage equivalent sustaining amount prior-year XX,XXX than copper, Afton. noted, of production all-in, higher higher River New higher at prior-year in higher due higher than gold prior previously

adjusting QX quarter second per metal was Turning financial in a share of is gold of higher flow sales X.XX driven Net XX.X XX.X sales due of $X.XX in XX% XXXX. After or of for to revenue difference a million items, higher the $X.XX to and in $X.XX per quarter The $X.XX other working volumes of XX,XXX pound. volumes by earnings prior-year of share primarily QX on sales due per million and at prices. compared $XXX higher Slide and primarily share X, million average per Company revenue $X.XX gold to results X,XXX during quarter, an higher copper quarter compared million per by prices. pounds Net or sales were at our a metal second-quarter ounce, was X.X the before of the a prior-year Operating realized price metal loss million and of higher or net cash driven XX.X The recorded loss share the was XX.X ounces million prior adjustments per quarter, than the capital share certain the loss than or for sales quarter. volumes to to per prices.

the River free mark-to-market Afton. royalty unrealized to and on Our stream Rainy adjustments QX at adjusted earnings includes flow adjustments cash related our New

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

structure. planned total both of the capital was this -- XX.X $XX and covers Renaud. this on month that, at focused related million the project Thank the cash quarter on we tropic Tailings specifically With XXth, XX.X Adding slide million CAD last-in. Blackwater the be will call to million over provides and was New million expenditures, liquidity were bottom underground turn liquidity. capital on Sustaining in our a spend on remaining the of expenditures to you. XX.X Amended million related spent at primarily zone Rainy capital. covers the our for sustaining to capital Next payment sorry, capital XXXX, operating of slide and to project X million. Afton, tailings C-Zone, receipt mine assets sale. growth development, details I'll the River. the the Growth had and and at was working and development XXX Thickened Slide and the at June BX the Capital XXX At

Renaud Adams

Thank X you, Slide Rainy on Rob. you, for us everyone on And again, joining I'm today. thank River.

rainy So the lode start guns to half and tons the which per the the quarter to extremely a at above clinic And lower rapid execute over let year, quarter-end XXX,XXX day mine COVID quarter very mined, high of and and was also target second the that performed saying per a currently strip second ratio. use to consecutive mining you to third or on The slide, they as of very enter implemented the (ph) operations me vaccination with operational active well a during a day. by focused be well at need grade at tons cases was continue testing. asset no during that the XXX,XXX are well-positioned

advance move cost optimization really So we forward operations the focus remains further on the and in [Indiscernible]. and as

Robert J. Chausse

a the quarter, milling the to The of mill a tons interesting the maximum the its bar pit. lower XX,XXX but performed important located The up XX,XXX deliver availability over compared underground second The day. day maintained per on Intrepid. mill East of average zone permit last at the a this the the of quarters. of is been in This is permit expect with nearly capacity day rate tons to year. X and ton slightly we an the Intrepid has had XX,XXX half at Very processing first

Renaud Adams

by decline XXX meters. another advanced Intrepid So the

a objective second the in develop XXXX, more We the have eventually per advance to have level advanced panel. the and definition totally with a ore. in continue full second resume third have prior quarter we now to the ore, drilling in ore and later implement productions span of The in to we're process in all ramp also would initiate as to now we part in developed reached the will while

Intrepid detailed the plan reserve reserve the our development previously now now that in December is XXXX, The generations be incorporated to of resources a below at target Intrepid significant that life eventually of and would would incorporated the pit. was their as parallel conversion fall zone So have a located their of portion of full the discussed, Intrepid, in into a more we from study resources completed next the mine. mine the

and to So conversion the to incorporations to the our -- $X,XXX and to regards of of size, on targeted grade the I short pit, in press for of and contemplates resources we're the we're to price those XXXX the underground portion located the complete MD&A life the release only evaluation of [Indiscernible]. to of upper and major to below reserve now do of mine busy refer the study as a the the of in which increase asset. extract our for July and will the reserve the prove this mine, of resources challenge current the next reserve with use you the is life now XXXX. December and process now that

of ODM this So was below in gold Lobe. production the from And called this grade the in the grade the the gold from East area XXXX, period. July was the eastern expected realized primarily area

approximately of So for XXXX. planned the the of XX% Lobe half represent productions East the second

of will So the gold the to the realized ounces to the impact gold in produce if thrive continue second grade half we XXXX. expect it expected negatively grade, of amount below

the per All and of is the production may this that impact of River known, So the X,XXX a all-in there low $XX,XX gold of $XX,XX equivalent sustaining range not Rainy achieve cost of the fiscal guiding to XX,XXX is enough to ounce. guidance high-end not risk range equivalent XXX,XXX ounces. extent yet but

this turning provide disclosure. background recent, But some bit but XX. of let to would that this at giving to start me the July comments here. I'm like of additional is the I Slide very So We a appreciate now situation by

So the called the they're resources three groups; in HGO, the Rainy are at LGO. low and categorized high, grade, and MGO, medium,

feed the MGO the what to the HGO call So combination use. for is the direct future the while stockpiled mill, LGO of we would form and

a combination really mill So HGO/MGO the in tons the to other of targeting XX,XXX what feed you're the at day. a words, is

underground the and stockpile underground. future move While the the with are transition for HGO as to we [Indiscernible]

is drive HGO/MGO the the really of the So performance of reconciliation the mine. what

ounces production reconciled which years, as course, the historically, using XXXX, and XXXX of could in of the could was the and was total and X done has reserve you on see a fate delivered to MGO the positive neutral HGO as extremely plan on, the well with table, So when on model. reconciliation the resource mine reconciliation. With mind, successfully compares last the in December that with have to the the the mined based resource we and see, you

ton mentioned, mined the be So in Lobe the the of XX% about to as half. represents East second

from grade second the that at plan, as higher production the represents half XX% and primarily initiate year East the the Lobe we of So the of HX. that was and the

I'd East the acrostic XX, July of be of post-XXXX. is done. represent quite the stage. HGO/MGO pit XXXX a open very Lobe like the the work our approximately situation remaining early highlighted. So was mention only of to that bit XX%, situation a XX% of But to There's

So but HX remaining something of XX% seriously. talking taken therefore, of the the the and life situation mine, range a we're represent in is about the of this obviously significant portion extremely not

past. we've it in in the So of months similar very the stage come, behavior situations East the really future to predict but the to early in been is Lobe

X every So we extremely last reconciled not was day, that yearly years, every in moment because perfect. basis well month, every the on have a

we've stage. because a we situations in the second of the similar reconciliation the importance So this but early was we've situations in some on East basis seen been Lobe again, sporadic of where before where highlighted the had in half,

in I our RC well the was notice strategy that XXXX. XXXX incorporated would in fully and strategy into operational to like to our as drilling So incorporated

to for like I'd mention as year we well Lobe has the drilling was that program place sources as amend this below ODM and the took X.XX drilling the yet week. be RC but RC the next completed planned, East and advanced our over will [Indiscernible] that overtime the early year So as not

and early-stage Afton. us. information of required keep is time. And if plan But as mine the as I'd more of in -- Slide needed, the the move New are there we'll modification a analysis new So XXXX like to advance in comes impact. potential informed again, XX portion well, mitigate to some the on to to at

with So New globally, the I'm Afton. extremely, pleased extremely

approximately New probably performance Afton basically XX,XXX following two with like water the copper event Afton British increase PSXX.X the or number mention second Columbia, implemented employee, production equivalent mines and Solid active been But COVID plan measure no in at New considerably. place, recent management gold in risk the infrastructure active of fire active and the to news, ounces quarter, and including as after the Afton million. New chain. been an this has cases of well the situation. the cases. of wildfire we're has a community, time, And with supply contractor, in to Unfortunately, had precautionary operation operated X [Indiscernible] I'd to impact you're the we there of monitoring situation the our remains but Again, the active. produced, in in the as to has

very noted for on in our of quarter, outperformed very and copper The C-Zone budget. We performed within strong during strong the by quarter, meters the focus a delivering have the time has -- The in been no a plan future to development and to X quarter on a on us. the mining XXX advanced resulting continued second site impact the asset. plan, while but mill date grade

plan, a extraction started a will a the delay, BX replaced from in the will stockpile. has BX second the quarter received guidance. lower But A midpoint quarter the by our to New the very using serve X of ore a But for of continue overall, also the XXXX expect mine than reserve of continue to important gold but as we the which While We're the over of copper less be grade Afton of with to strong guidance and gold point copper low a be of that portion December and our result as half later permit the meet and -- than well ore originally to during plan. point there $XXXX equivalent pound. as know, is the the course, as was price ramp and as XXX therefore, price XXXX. of from and/or Lift a estimating as the XXXX will XXXX, of second year of available up

the significantly lower short-term for cut-off evaluating additional So reserve pricing, Afton using with a occurring prices potential a is above grade. metal opportunity New

We for continue This the of to completes asset Q&A the then now the seize-all I the Operator. in Operator transition total of the back and to we maximize call turn as XXXX. portion would the portion. it value presentation the to

Operator

ahead. Instructions]. first will [Operator question Anisha your And Thank go at from be you, Soni Please CIBC. sir.

Anisha Soni

disclosure we now. East grade was an point your if grade that for figure reconciliation tell -- there, what my Thanks Lobe. you're the expected the what us relative expecting or were guess, from just the reconciling you question I just on the and I reference Can Hi. grade -- actual the you're what taking was expected Lobe. the East actually give the want you what for But And what us can, thank math that you with to. idea for you right getting

Robert J. Chausse

say, on averaging, performing really I X.X as we're X basis. the first what could expecting point disclose half the around X.XX know, gram. and in never been a we've We full-year in to But a detailed the -- you

X,X.XX the Lobe XX% of breaking the second from X something X.X the without the performance half is to Lobe. along in year the that. grams of order So that a in Again, for ton East about and into in XX% half the tons expecting in contributes the the obviously achieving achieve of we're East of to second grams detail, the down

Anisha Soni

And with Okay. just Development moving BX then the Afton New Thank you. onto rates.

be little you indicated grades to You we of behind kind us and bit of perhaps that. of idea this half on have second the Can thinking just can at of this -- far you're behind kind looking receipt to give what year, was. sources is ore of give then an a us an about should say how of going just what technical into the And you fair idea it this that QX? performance report. I'm

with so X developing that at supposed beginning months the this assumption I what, compare behind. BX would zone? X fair the to were the estimate started of is year, a access You have or in And to

Robert J. Chausse

Yeah, this a the I -- assumption. disclosed, it's the fair for first the hoping priorly we lowest mean, as permit quarter. were we so in BX were

fatality. to Of course, quite and communities were so And been the there early last in with as conversations pending really then the extremely short over all challenge for know, last year. year, we that government in we hoping knew And our BC hit close. you the has frankly, we some were were while

that second quarter. was So quarter, and waiting, we maybe for were to we extended unfortunately, first were the really, patiently planned but the

months is ramping we So at in basically. mentioned the as numerous were happen, X not Lift 'XX here well, that is a X other [Indiscernible] that extend and Nelson up East the points on hand, assumption draw good, support and is as to X some of there there the which at we're -- did relook (ph) to the But in hoping your

Renaud Adams

time lower on of the in prices. mining -- metal back that was or stopped in use of

see grade a come Anita line. resource this you massive continue grade the towards obviously block from (ph), probably reserve the as resource reserve. the envelope the very X the continue has So and Remember two been their X, quarters, Lift tons fall has is there and first the in to well to opportunity will from performing Lift to cave around copper line that -- an beyond could

So all you for XXXX, confident. we're of very know, that

that terms at in you So so our definitely you do of grade, see we look and if math production,

Robert J. Chausse

to maybe X.XX. fine that from goal drop parallel point seen. the the to grade the to late interrupt, goal X.XX X.XX you've probably but we'd between late not copper. the when drop -- We're the We're fine that

in as Now, half I'm but copper performing in hasn't the grade very been well, noted first outperformed. has part the that pleased,

So us average maybe planned. the I so, in that as originally said or area a go other X.XX as to opportunity, gives like was maybe and more more

So

Renaud Adams

there of point trying to leave and higher no the grade behind. but a continuing to lot opportunities and out is in stretch opportunity

our So would use the quarters half guidance. for the of still the first X allow well-positioned to us in lower maximize be grade second and

Anisha Soni

Okay.

Robert J. Chausse

It's a long answer but --

Anisha Soni

also grade lower as that lower would gold grades produce targeted, got well? some copper then And

Robert J. Chausse

Yeah, you it -- so cannot decouple as will do both well because

Anisha Soni

Yes.

Robert J. Chausse

goal but the still the the with By end down, drilling the midpoint. we expect combination a to blow lower, meet goal and of

Now, equivalent XXX maximize season. and taking a assets using calculated the are We're as is remember of to as value do well. goals we everything we as copper believe the that to well right that to our the account thing into transition

Anisha Soni

Okay. the fill And BC, seeing perhaps the resource. tonnage was were and higher then would you the reserve higher grades upon would think that Will that you had contingent that run rate run so you've far? imply your that I rate through the the going well? maybe mills as in from that than

Robert J. Chausse

On extractions want of and prudent would we the transition parallel managing to and that in of the ending as next very maximize storage. managing current to extract well the are Remember tailings say tailing, our much be be as maximum to we continue as value, life and to the of the we year storage. in-pit capacity the one, as water as the we that the to underground that mill I

not important So beyond to do tailing some have then try we manage to very push and that it's situations.

mill [Indiscernible]? more the less than would say, fuzzy I pushing pushing when So I'm the

Anisha Soni

talk pass of terms energy theme this has inflation consumables, been in of is your of relative big seeing picture. inflationary exposure are you key assets, I'll going more XXXX? off. other into what question, this But both at pressures, and labor, and stage, could When about Last pressures and there kind then it

Robert J. Chausse

think River case areas is our fuel. in the certainly of exchange Yeah, that consumers at the rates. Rainy the we site look two -- fuel, we use look of impacts. I When other the our at are that's where most fuel that you'd and primarily That's its

annual into we So to came fuel -- million we beginning $X what compare about year. $X the on of basis the pricing the when an of the impact at there's

now, as rate And around $XX we're about as FX So X.XX. ounce. an approximately far at

Our an remainder of about -- $X.XX that Or guidance a way, year. on the this that put the $XX ounce delta $XX in was change impact is million Gold. for change and represents around X.XX maybe another CAD New

Anisha Soni

Okay. in the Capex, or of -- on [Indiscernible]? Capex seeing And there you're then impacts the is pressures any on the difference that side

Robert J. Chausse

Nothing material. a we've Amended for of instances, -- We've the for that is lot -- past of and the steel instance, Tailings our, received majority Thickened and material.

So of projects. capital major on no our impact material

Anisha Soni

Okay.

to So be year we to see next into shouldn't escalating development C-Zone expect then? the

Robert J. Chausse

No.

Anisha Soni

Right. Thank All Okay. you.

Robert J. Chausse

Thanks.

Operator

Thank gentlemen, no Please you. this time, questions. we [Operator And Instructions]. have further at proceed.

Ankit Shah

Sylvie. who And Thank today. thank you joined you, everyone us

you hesitate rest the hope have email. by not questions, you do reach additional your enjoy to any We As of to please out always, us or phone should summer.

Operator

lines. Thank Once you. conference at for gentlemen, thank this we conclude please indeed your And today. for you you Ladies that again, and time, do does ask your this disconnect attending. call