• Gold Production: Approximately 80,400 ounces in Q4.
• Copper Production: 14.5 million pounds in Q4.
• All-in Sustaining Costs: $1,018 per ounce for the quarter, a 15% decrease from Q3.
• Capital Expenditures: $75 million total for the quarter, with $10 million on sustaining capital.
• Free Cash Flow: $22 million generated in Q4.
• Revenue: $262 million in Q4, a quarterly record.
• Net Earnings: $55 million or $0.07 per share in Q4.
• Adjusted Net Earnings: $59 million or $0.07 per share in Q4.
• Cash on Hand: $105 million at the end of Q4.
• Liquidity Position: $482 million with the credit facility undrawn.

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

Release Date: February 20, 2025

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

Positive Points

• New Gold Inc (NGD) successfully replaced mining depletion of reserves on a gold equivalent basis through exploration efforts.
• The company increased its exposure at New Afton to over 80%, reducing Ontario Teachers' free cash flow interest significantly.
• Q4 delivered the highest production and lowest costs of the year, with approximately 80,400 gold ounces and 14.5 million pounds of copper produced.
• Consolidated all-in sustaining costs for Q4 decreased by 15% over the third quarter, highlighting strong cost performance.
• New Gold Inc (NGD) generated $90 million of free cash flow in 2024, setting up for sustained free cash flow generation.

Negative Points

• Gold production in the fourth quarter was impacted by unexpected mechanical downtime on the crushing conveyance system.
• Despite strong cost management, gold production was slightly below the updated guidance.
• Full year total capital expenditures were below the 2024 guidance range, with some growth capital deferred into 2025.
• The first quarter of 2025 is expected to have lower production due to lower grades and the transition from B3K to the seasonal cave.
• Sustaining capital is weighted towards the first half of 2025, impacting cash flow in the early quarters.

Q & A Highlights

Q: Can you provide more details on the opportunity for additional pit pushbacks at Rainy River and what factors might influence their inclusion in the mine plan? A: We are currently drilling the northward strand with an extension to the west of the ore body. This presents an opportunity to extend mine life. However, the decision will depend on factors such as metal prices and the capacity of our tailings storage facility. We need to confirm the ultimate capacity to handle tailings before proceeding with any pit pushbacks.

Q: How should we think about the all-in sustaining costs for 2025, especially given the expected lower production in the first half of the year? A: We expect the second half of the year to be stronger in terms of production, and our cost profile will follow this trend. Costs are anticipated to decrease towards the end of the year as production increases.

Q: What are the key factors contributing to the expected increase in gold and copper production over the next few years? A: The increase in production is driven by the realization of completed projects and the transition from the B3K to the C-zone cave. We expect gold production to rise from 300,000 ounces in 2024 to a midpoint of 410,000 ounces in 2027, and copper production to increase significantly as well.

Q: Can you elaborate on the financial position of New Gold Inc at the end of Q4 2024? A: At the end of Q4, we had cash on hand of about $105 million and a liquidity position of $482 million with the credit facility undrawn. We repaid the entirety of the $100 million drawn on the credit facility, demonstrating strong operational excellence and cost discipline.

Q: What are the strategic goals for New Gold Inc in 2025? A: In 2025, we aim to deliver on our production and guidance targets while maintaining a strong focus on health and safety. We will ramp up operations at Afton and Rainy River, increase exploration efforts, and continue to generate significant free cash flow, leveraging our position in a robust commodity cycle.

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