NGD - Earnings call transcript Q1 2022

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Operator

Good morning. My name is Michele, and I'll be your conference operator today. Welcome to New Gold's First Quarter 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. And 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 hand now over Strategy [Operator would to and the Development. of Instructions] I VP like conference Shah, to Business Ankit ahead, go sir. Please

Ankit Shah

you first quarter earnings good everyone. and Michele, and XXXX today you, Gold's We conference Thank appreciate New for joining webcast. morning, call us

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

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

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

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

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

Renaud Adams

everyone. Thanks Ankit good morning and

during to we've take challenges of pass to our results, the peers made discuss it the company, I Rob to of our and like moment we've a to So discuss quarter. many the just at before wanted our quarterly financial experienced, some I changes

also no this teams COVID. But and very changes year, a teams operations. higher of the XXXX. felt delivered and have focus the in good cases same but proud start many at the of peers, in were We I've years, on COVID assets in prices as offset level exception. of two our light quickly period levels adapted at But higher having pressure past challenged Inflation of we've Rainy River. consumables, dollar. to and despite quarter. a mainly in we group, our with has able many our to partially the of this of benefit impacted the to Like earlier diesel, safety us electricity which experienced the also peers, and our health two resilient productivity our make we're I'm of of the Over Canadian industry, weakening been Canadian our

an pressures. to optimization continue in We We mitigate to cost delivering our on initiatives potential remain these evaluate committed reduction effort to and assess guidance.

stakeholders. the our During Patrick, team the development the At presentation, in the later life this later to C-Zone to this and XXXX. up New in River, technical Amended I'm to continues, advance commission updated has completed move continue projects and come organic and River on development good made technical, COO execution first deliver BX this Tailings you to continue New also we experience Intrepid on our that, which priorities. of year. very review pass to the Pat new and expanded our will sector our mining in our I'm quarter Pat advanced, sure I to on building operational, Chausse, Godin, And pleased I term to Rob Rob? and more forward forward our I'm initiating Rainy as look his we to Rainy in CFO. we looking quarter really addition report all also we forward unlock we team discuss March, our with will him it will opportunity. the mining with advance I'm to capital and the Pat our longer our the Thickened as forward. continuing on as company we've and key to for we ramp pleased of At we a and business. very significant from knew, looking as a be a for value and positive potential extensive accomplishment and hearing facilities. Gold. Afton, progress and our completed I'm knew to welcome is now invaluable, of for milestone brings but mine QX

Rob Chausse

with our provides are QX. April consistent highlights X Slide press our details for Production release. production operating

of ounces gold equivalent ounces production a gold year from ounces, to gold million for approximately QX, and Afton. company primarily compared lower is as X,XXX total copper, gold ounces due the the Rainy tonnes to processed Afton at During of consisted XX,XXX The ounces. New grade gold of pounds X.X the prior produced XX,XXX XX,XXX amount from and equivalent River, New lower

Our volume higher sales operating with and sustaining per were Afton spend, quarter partially volume X,XXX was costs capital to primarily in River. offset expense sales ounce higher prior in lower our Consolidated the at than all with Rainy line quarter prior higher per the for due quarter. sustaining New ounce, at equivalent

inflationary regard are a and good QX, with portion benefit of the cost challenges across fuel been inflationary the a Canadian to well as of optimization the offsetting mentioned, in experienced reduction Canadian that initiatives industry a as pressures. prices we experienced have Renaud dollar -- As during we weaker particularly with

any minimizing Going on work we'll continue impacts. to forward,

the pound. X.X per copper for $X.XX was the offset working earnings share million capital recorded was or during to $X.XX before adjustments Turning or quarter. was at of 'XX. share of of per to QX X,XXX of first Operating compared million the per year sales volume. driven earnings copper per $X.XX revenue $X.XX due the revenue After QX adjusting higher prior to of or ounces, flow compared ounce, prices per in a net X, of share cash charges, first line were in million primarily XXXX. at average gold XX.X approximately net earnings an in QX, sales quarter million, by in lower partially quarter X% price X.X QX of metal sales million XXX $X.XX prior of company share and with to net per than quarter gold by loss for share certain XX.X quarter realized The $X.XX per Slide XX,XXX net higher

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

measures. Our has these details MD&A on more Expenditures. Capital

million our and both work operating XX.X -- Our primarily XX.X the on and sustaining total capital assets. XX.X was capital cap and was Capital development capital spent at Growth sustaining River. development the project Rainy specifically, quarter focused zone structure. was provides on stripping Rainy details leases Afton. at at capital. C-Zone at at BX planned the River for growth and Sustaining million on X Afton tailings spend mine and million New to related New was Intrepid capital of Slide the underground

remaining $XXX to the million. XXXX XX, noncurrent we will and During of derivative year-end primarily interest in be back redeeming in the decrease secured I'll announced 'XX, is on XXX With our the paid to due cash million call financial was that, cash turn that Renaud. from we mid notes at cash senior The And liabilities. settlements as on March May. the quarter, hand

Renaud Adams

higher on of a now X:X quarter. due quarter additional which that was same our the operating River was focused not the main -- on to partially ton costs, in crushing rate also make We of approximately on improve weather to impacting million had all delivered gold XXXX. a XXXX of the will Rainy COVID tons positioning in the have grades and additional mitigated. The circuit team The cash was by in to cases Rainy XX. of strategic winter $XX River good to lower such free navigated productions quarter, pressures, I'm started mining. of operational flow capitalized being which conditions impacted the quarter. Slide the nearly and total a rate for continues in some The reduce milling impact first compared had waste, productivity, delivered quarter. stockpile a All-in-all, milling the quarterprogress. adverse of a the months XXXX mined the was Despite Thanks, period progressed. was meaningful increase strip lighter additional equivalent conditions ways which XXXX. the Rob. that remarks back the for as team mainly inflationary and can to in for and related period same resilient to The lower did improved line seeking as mine downtime normal consumables to expenses so and by total and terms to of on I on from X performance work fuel quarter fully this ratio up conveying the adverse the movement, with the use approach to downtime face XX,XXX was mine around very and approximately impacted

Rainy I maintenance be an to contributor XXX the we and development remain future. team continue operational in ability objective use -- mill just total have mark, to achieve our see improving operational tire in overall I back improved life day to The XXXX mining present XX% improvement of on huge continued production of contributor example, other For XX,XXX cost efforts less we’ll huge potential deliver the a also year-over-year and further quarter our current from continue plan. with uses expect to so and pit returned [indiscernible] it reduce first meters tons of cyanide. example, and costs our prices. truck on consumable we performance. with The positive offsetting achieved. as development potential in tire and of to a Bringing increase And the also overall very grinding with efficiency, Intrepid have would our over for such delivered a nearly

pleased during the XXX,XXX $XX to XXXX pre-production very of development underground mine ounces over XXXX. an profile the A with gold for average transition resource minimal 'XX the with Updated period mined report line stopping open On half reconciliation in complete very at of access XX, underground are period updated mine level the approach capital a extended using for growth whole ounces to place developing pit of attractive to plan equivalent the today has life in for in-pit the ore of portal which model. year. second technical XXXX, only is River life mineralization gold in XXX, estimated equivalent the illustrated I'm XXXX attractive XXX now to XXX over and to an work result and of first of Rainy from Zone. cost the We million required. full both Slide for And Intrepid our with with prep production to of design an XXX,XXX take the on long-hole

is stripping complete, maintenance For the total open sustaining and strip pit mining portion, significant post and reducing of capitalized ratio when reduction XXXX, capital requirements. all

So in Slide our bringing the cash in completion overall nearly as of X,XXX per perfectly deliver mine sustaining the ton equivalent execution. all-in gold flow costs X line XX, of with and lower New as On Afton, free of life aligned were margin on activities. ounce, at the planned mines Lift quarter New Afton excellent we

With in up newly all and continued in of months development facilities, the this XXX until year. position. initiate our tailing exceptions The initiation commissioning for is the of ahead will continue made which development of intensive completion this first achieved later built nearly in-pit of The and to being schedule, for year. we currently QX, continue quarter, which of quarter the of and total level, are ahead with of ramp advance successful fourth BX plan efforts of development planned TAT C-Zone to meters the the recovery accelerate development disposition production

filed of update very and XXXX the of in time. and recently first up quarter, and And portion shareholders improve I which first on you that on opening deliver Cherry efforts include our call. a of XX, Intrepid presentation welcome. board strategic of in underground we've production. target we second mining. on seek At one intelligence of our our to XX,XXX special I artificial ramp guidance, right New Creek we BX to an our At joining on the and restless part The drilled bringing latter continued on in technical in also on efforts budget, while remaining partner completed Rainy thank continue We're are intends receive half comment remains and completion key continue Pat, and for next their as 'XX. efforts ask and support this update to the of community River, second company the which quarter, at the drilling to and on Rainy. and on ounces, just an opportunities Afton would conclude time and such priority, all challenging a permit in while strong hole release contractor I a commitment today. the exploration infill day for include transition and diamond XX sitting delivering exploration executing updated On C-Zone and employees of the to development to first thanks director, made last have During build us Pat one would my is to we we you an totaling I hole year, their remarks, In exploration underground if to me his comment, that open to on not turning continue pit margin report, our Slide our the we Trend. the also or nearly our want

Pat Godin

Thank exploring the working value experience it's to Pit I work mainly pleased team, is that New me. Rob you, really to I’m Renaud I think of for and and to -- exciting And something the in together for the approach, join crucial Open the Renaud. me. with have it's authorize Well, really join Gold. past,

our guys relationship new NGD in mainly guidance. best assets, me, team. And crucial. for the safe crucial maintain to doing it's the I roles. compliance for and Group job place, stabilize will my invest to my and beginning provide on I for is but the to also, to and operation think both sustainable to will be I First main our At reinforce for with I the workers to site, And I’m us think time the improve are is to that, work team stakeholders and performance be with doing do continue my working So total -- to and with invest supporting serve to -- the very deliver Nation local in -- to excited

Renaud Adams

the I from so the you Michelle? And quarter turn hearing to our second said, much, for Q&A as the operator Pat Thank will of call. I Pat. be now in portion back we'll review. it

Operator

from [Operator Parkin Instructions] comes Your National question Bank. of Mike first

Mike Parkin

at of Are that noticing assets challenges from To shutdowns? kind are during contractors on speak availability further labor cost pulling shutdowns, kind pressures, any staffing further you you thing? away the and for of

Renaud Adams

questions. and for Mike, Thanks, comment your

maintenance start. have of not was mentioned, course, a that So, as shutdown period. operational on during plan the side, I did it tough We really big

plan to So lot shutdown and flexibilities our that's We usually ahead way that schedule, of so adjust good. gave of a to contractors our adapt.

the but impacted around of start that. little a that bit -- shutdown But shutdown, to at and wouldn't may issues And if have on shutdowns, situation, re-activeness slow maintenance operate, so believe has been all-in-all, impact on quarter. and mine the so own plant of course operations, may to the COVID side, hasn't when forth, you any down it on really of but I I but mostly regular say impact the you more comes the in on and it the rail it like the some it

I advance think we in that significantly as the quarter. improved

Mike Parkin

with XX you're looking in early various the Slide permit reason notes XXXX? government up Is second says any XXXX. on got backed half later little issues whatever through COVID wiggle the receive that then it that, like drifted room And of delayed with kind Is just of that any to if receiving a that maybe delays? out into there the there C-Zone for

Renaud Adams

address, some the and I BX, because too, needed at the discussions. was our First There provinces, and their but were BX address, were had with with delays. same which needed watering tailings we of partner, to time challenging everyone -- sterilizations in-pit conversations that times tailings we were as the of appreciate impacted them, to very the all course, that. some knows, COVID at consultations Nations, included the in all longer technical of for for the

is on say I we really of that is to little everything everything C-Zone, more like So permitted. a advancing C-Zone, bit have well nothing place. -- frankly, we've extremely round. in our well, of of new happened expecting already time to then the we're its not completed partners it, conversations and internally round the about and the support as and And communities -- our first comes second quite as from is well When it And answering during the -- comes our process basically the there questions is are BX. in

And this we now bed that the we could half its we that is following the So -- the due feel course. put very to too not second of late year. in strong could process

Operator

Lucas comes question of Canaccord. next from Your Pamatat

Lucas Pamatat

quarter obviously, the Rainy also were to thinking guidance, above River, you lower believe this year. and So guided had this just first costs in the of cost at about costs your I half

should think about how going we year? So of for rest the the those forward

Renaud Adams

by not We half. guided really did

of first last the So Rainy the like mentioned at we guidance River. the the is time half just year at

ratio, So -- the about higher cost the production. at a slightly the higher represents achieve XX% waste, be which ratio, first grade. lower half, is strip quarter will so second to less And the production is of less more strip

So more inflations -- and in we're waste that, yes, some pressure following approach of but with strategic in our all all and pushback. -- more all,

[Indiscernible] quarter, executed not no, strategically, planned. we So so as we did for

Lucas Pamatat

follow-up, your this that in from can how Zone BX prepared idea on many year. the have you just any mentioned of so remarks this expect that we track is then Do And for area tons a of you year? QX

Renaud Adams

between at XX,XXX that and completed to day. all X,XXX are takes X X the caving approach, BX all we're place its your and look point tons now so potentially your anywhere technical the in a done, max have development the you talking if delve -- and up So once you about draw and capacity,

as the about it and now. to we lot of before the the about New gravity to the take I'm full place accelerate advance at ahead achieve beauty and the early the end hope place, be on hopefully earlier allow next taking And of objective with roughly, year capacity a complete to the development up and the XX% to the than like, path and of And like, year. ramp Afton we're schedule -- accelerating, would the the rather there's and right we will sure so team this

to would of really impact what at and have here, So and more accelerations allow completions caving of that's schedule and this a place ahead is year. will stake big development take

Operator

next Markets. CIBC Anita question World from comes Soni of Your

Anita Soni

is, per I and question both unit The at the Rainy with respect first have that to New mining Afton cost River. ton

So at jumps quarter-over-quarter Is pretty think high this the could went I on it cost? there you XX it to New it on Afton, the --- -- something from XX. that clarity was quarter provide some significantly, mining so why around

Renaud Adams

type really mining the are It's of needed.

fact is the Lift we've free down so that I remote. activities, level the what picking would out draw And a as The that, that So, X caving shut now. point all is recovery call free, result year, and of from in the accident operating BX the And BX. the just forth. and the stage -- safety tons so protocols the early last and basically comes that SOP has BX practices increased

and as capital So the behind the pre-caving we the then the but transition are we in same you're put sustaining the and it's benefiting no well BX coming sustaining spending as from. it's cost mind transitions. you're back. tons basically us, development not as ramp a all is up benefiting a come under at progress flow BX the BX with there ounces It's the doubt The still related transition. But zone, as at capital, to my and

eventually return cash and proper establish but flow So transition, temporary difficult ourselves structure. it’s our to and we'll it's

Anita Soni

BX so complete? the then Zone when And me remind again,

Renaud Adams

be fourth is it if even follow, minds, this here would our the we more -- and this really call in value in will completing increase We the quarter this to opportunity have looking at four normally, the we point, let's

Anita Soni

little then guess I higher. costs cost Rainy ton relative this costs guess, process to bit last River, And on mining the were the technical case, were except I But But is, similar question, year. per report. similar, my versus similar a in question were

just costing per between trying process the versus looking the you were the year. to the the was for in report mid-Xs the $X X, that a X, that I think this technical process, ton weeks understand few at, given guys And You were released ago? discrepancy in just I'm expecting mid-Xs

Renaud Adams

the instability -- when went difference the back when about some the at our that back first about operational achieved speaking and you know the So But bring cost -- efficiency that XX,XXX usually XX as planned all we we to and were mill globally you it's ton to was all as -- and and costs is in planned were the I it's well electricity referred yes, operate in but spending the you and have it to, capacity -- that this maintenance. Yeah, and XX-XXX. But installations -- extra that money the the it's this consumables cost to we absolutely back the those and in back quarter so tons mark, maintenance highlighted day bring between to up is first in quarter. it's And stopped, costs at a down and the where quarter have you're XXXX. you're at per related need were and the XX, there included

we achieved achievable. not have somewhat haven't achieved, But So that unstable. was those, are QX those but something we absolutely it's costs

Operator

the there sir. to gentlemen, will go no Ankit Shah remarks. are conference turn ahead, further I and back for closing Please Ladies questions.

Ankit Shah

Thank And again to you, thanks today. Michelle. joined who us everybody

do great you you always, not email. and As have day. hesitate phone to Thank out questions please any by additional should us a to reach or have

Operator

gentlemen, concludes like We for to call this participating morning. your for you lines. disconnect would you thank and to your please Ladies and ask this conference

New Gold (NGD) 2 May 222022 Q1 Earnings call transcript