• Gold Production: Approximately 78,400 ounces, a 14% increase over the second quarter.
• Copper Production: 12.6 million pounds.
• All-In Sustaining Costs: $1,195 per gold ounce, a 13% decrease from the second quarter.
• Rainy River All-In Sustaining Costs: 29% reduction compared to the second quarter.
• New Afton All-In Sustaining Costs: Negative $408 per ounce after copper credits.
• Revenue: $252 million, a quarterly record.
• Free Cash Flow: Record $57 million.
• Net Earnings: Approximately $38 million or $0.05 per share.
• Adjusted Net Earnings: $64 million or $0.08 per share.
• Cash on Hand: $133 million.
• Liquidity Position: $459 million.
• Capital Expenditures: $63 million total; $20 million on sustaining capital, $43 million on growth capital.

• Warning! GuruFocus has detected 7 Warning Signs with NGD.

Release Date: October 30, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• New Gold Inc (NGD) achieved a record quarterly free cash flow generation of $57 million, highlighting strong financial performance.
• The company reported a 40% increase in production over the second quarter and a 13% decrease in all-in sustaining costs, showcasing operational efficiency.
• Rainy River achieved a 29% reduction in all-in sustaining costs compared to the second quarter, contributing to overall cost performance.
• New Gold Inc (NGD) successfully commissioned the gyratory crusher and conveyor system ahead of schedule, which is expected to positively impact production and costs.
• Positive exploration results were realized at both New Afton and Rainy River, indicating potential for future resource expansion.

Negative Points

• Rainy River's gold production is expected to be about 15,000 ounces below the original guidance range due to operational challenges.
• The company faced a voluntary suspension following a fatality in July, impacting production timelines.
• Some high-grade ore pockets at Rainy River were lower in tonnage than expected, affecting gold production.
• New Gold Inc (NGD) had to make a payment of $43 million to the Ontario Teachers' Pension Plan, impacting cash reserves.
• The company expects to be slightly below the consolidated gold production guidance range for the full year.

Q & A Highlights

Q: Can you clarify if the grade reconciliation issues at Rainy River are behind you, and if the current issues are in a different area? A: Jean-Francois Ravenelle, Vice President - Geology, explained that the current issues are not in the North Zone, where past problems occurred. The current challenges are in the area being mined now, with some high-grade ore pockets yielding lower tonnage than expected. Measures have been taken to mitigate future risks, and it is not expected to impact the 2025 and 2026 production outlook.

Q: With the underground crusher and conveyor system online at New Afton, how soon can we expect the mill to reach full capacity? A: Patrick Godin, President and CEO, stated that the system's early commissioning eliminates trucking constraints, improving efficiency. The ramp-up will be gradual, with C-Zone production increasing in the second half of 2025, aiming for 14,500 tonnes per day by December 2025.

Q: How are you managing to reduce costs at Rainy River despite lower production? A: Keith Murphy, CFO, highlighted cost control and optimization efforts, including improvements in drilling, blasting, haulage, and mill operations. Capital savings were achieved by performing tailings dam work internally and reclassifying some capital expenditures to operating expenses.

Q: What are the potential impacts of the early commercial production at New Afton on costs? A: Keith Murphy noted that the commissioning of the conveyor system reduces haulage costs and increases throughput. This trend of decreasing mining costs per tonne is expected to continue into 2025, aligning with historical cost profiles from earlier operations.

Q: Could you provide more details on the potential for a pushback or satellite pits at Rainy River? A: Luke Buchanan, Vice President - Technical Services, mentioned that a potential pushback to the main pit is being evaluated, with existing measured and indicated resources. Additional drilling is ongoing for satellite pits, with updates expected in the first quarter of 2025.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.