NEW GOLD REPORTS FIRST QUARTER 2025 RESULTS
PR Newswire
TORONTO, April 29, 2025
Solid Quarterly Performance Leads to Free Cash Flow Generation, Critical Path Items Achieved to Allow for Ramp-up in Production and Exploration Activities Going Forward
(All amounts are in U.S. dollars unless otherwise indicated)
TORONTO, April 29, 2025 /PRNewswire/ - New Gold Inc. ("New Gold" or the "Company") (TSX: NGD) (NYSE American: NGD) today reported financial and operating results for the quarter ended March 31, 2025.
"The first four months of the year have been exceptionally positive for New Gold in achieving our strategic objectives," stated Patrick Godin, President and CEO. "We increased our future free cash flow by consolidating our interest in New Afton to 100%. We successfully refinanced and extended our senior notes and extended our credit facility. During the quarter, we also delivered two new Technical Reports outlining strong production profiles with lower costs. Collectively, these milestones are expected to create meaningful value for our shareholders and provide increased financial flexibility and optionality for New Gold moving forward."
"Operationally, we delivered our first quarter as planned, advancing several critical path objectives to set ourselves up to achieve our annual guidance. At New Afton, B3 grades were higher than expected as the cave nears exhaustion, which is now expected by the end of the second quarter of 2025. At Rainy River, our efforts to sequence waste stripping in the early months of the year have allowed us to remain on-track for a step-up in production starting in the second quarter, and to deliver an improved second half of the year. Additionally, underground development continues to advance, and I'm pleased to report the successful pit portal breakthrough occurred in early April, an important catalyst that enables the underground ramp-up to advance throughout the year," stated Mr. Godin.
"On the exploration front, the New Afton K-Zone exploration drift is now partially available for drilling, and our exploration efforts targeting K-Zone are expected to ramp-up aggressively. At Rainy River, exploration drilling focused on testing growth opportunities along the NW Trend. I look forward to providing updates on these efforts in the coming quarters," added Mr. Godin.
First Quarter Sees Strong Performance from New Afton, Rainy River On-Track for Ramp-up in Production Through Remainder of the Year
-- First quarter consolidated production was 52,186 ounces of gold and 13.6
million pounds of copper at all-in sustaining costs1,2 of $1,727 per gold
ounce sold. First quarter gold production represented approximately 15%
of the midpoint of annual consolidated production guidance of 325,000 to
365,000 ounces of gold, slightly ahead of the planned first quarter of
14%.
-- New Afton first quarter production was 18,278 ounces of gold and 13.6
million pounds of copper at an all-in sustaining costs1,2 of ($687) per
gold ounce sold. First quarter production represented approximately 28%
and 25% of the midpoint of annual guidance of 60,000 to 70,000 ounces of
gold and 50 to 60 million pounds of copper, respectively, higher than the
planned first quarter of 20% due to continued strong B3 grades leading to
higher than planned head grades.
-- C-Zone cave construction continues to advance on schedule, facilitating a
step up in copper and gold production in the second half of 2025.
Undercutting is on track for completion in May and cave construction
progress is more than 50% complete, as of the end of March. Other key
project milestones completed in the first quarter include the relocation
of the secondary sizer and commissioning of the C-Zone dewatering system.
The flotation cleaner circuit upgrade is on schedule for commissioning in
the third quarter, with construction commencing in April. This project is
expected to improve copper and gold recoveries as the operation ramps up
to full processing capacity of approximately 16,000 tonnes per day
beginning in 2026.
-- Rainy River first quarter production was 33,908 ounces of gold at an
all-in sustaining costs1,2 of $2,758 per gold ounce sold. First quarter
production represented approximately 12% of the midpoint of annual
guidance of 265,000 to 295,000 ounces of gold, slightly ahead of the
planned first quarter of 11%.
-- As outlined in the Rainy River operational outlook, open pit mining in
the first quarter focused on waste stripping, with most of the mill feed
coming from the low-grade stockpile. With the final waste stripping
campaign for Phase 4 completed in April, the remaining benches are
planned to provide ore production through to 2026 at an average strip
ratio of 1:1.
-- The Rainy River underground mine achieved an important milestone with the
breakthrough of the ramp to the pit portal in early April. The connection
to the pit provides an immediate reduction in underground haulage
distances, improves ventilation, and establishes a second means of egress
to facilitate stope production from several new mining zones as they come
online in late-2025.
-- The Company is on-track to deliver its 2025 consolidated production
guidance of 325,000 to 365,000 ounces of gold and 50 to 60 million pounds
of copper at all-in sustaining costs1,2 of $1,025 to $1,125 per gold
ounce sold.
Fourth Consecutive Quarter of Free Cash Flow Generation, Strategic Corporate Activities Supporting the Transformation of New Gold's Growth
-- The Company generated cash flow from operations of $108 million and free
cash flow4 of $25 million after investing over $43 million in advancing
growth projects during the quarter. This was highlighted by New Afton's
impressive $52 million in free cash flow2. The Company exited the first
quarter in a strong financial position, with cash and cash equivalents of
$213 million.
-- On February 12, 2025, the Company provided its three-year operational
outlook and filed Technical Reports for the New Afton and Rainy River
mines outlining New Gold's strong production profile with declining costs,
strong free cash flow generation and increasing net asset value while
also highlighting upside to build on over the longer-term (see February
12, 2025 news release for additional information).
-- On March 4, 2025, the Company completed a $400 million senior notes
offering with an interest rate of 6.875% and due in 2032 that was used to
fund the purchase and cancellation of approximately $289 million of its
outstanding 7.50% senior notes due in 2027. The Company intends to redeem
the approximately $111 million remaining 2027 senior notes on or about
July 15, 2025. In connection with the offering, S&P upgraded the
Company's corporate rating from B to B+, upgraded the bond rating from B
to BB-, and upgraded their outlook from Stable to Positive. Moody's
maintained the Company's B2 corporate rating and B3 rating on the bonds
and upgraded their outlook from Stable to Positive.
-- On March 24, 2025, the Company and its syndicate of lenders executed an
amendment to its existing revolving credit facility. Under the amendment,
the term has been extended by four years, now maturing on March 23, 2029.
An accordion feature has also been added, which allows the principal
amount of the credit facility to be increased by up to $100 million,
subject to certain conditions.
-- Subsequent to quarter end, the Company entered into an agreement with
Ontario Teachers' Pension Plan to acquire the remaining 19.9% free cash
flow interest in the Company's New Afton Mine. The transaction is to be
funded with cash on hand, borrowings from its existing credit facility,
and a gold prepayment financing. Importantly, the transaction comes with
no equity dilution to New Gold shareholders. Following the transaction,
the Company will have fully consolidated its free cash flow interest in
New Afton to 100%. The transaction is expected to close in early May (see
April 7, 2025 news release for additional information). The $100 million
gold prepayment associated with the New Afton transaction was finalized
in mid-April. The Company has agreed to deliver approximately 2,771
ounces of gold per month over the July 2025 to June 2026 period at an
average price of $3,157 per gold ounce.
New Afton K-Zone First Exploration Drill Bay Complete, Both Operations Advance Technical Studies for Growth Projects
-- At New Afton, the exploration priority for 2025 remains on K-Zone.
Development of the 4500 Level exploration drift to target K-Zone is well
advanced, with the first exploration drill bay now operational. The new
exploration drift will facilitate infill drilling to support Mineral
Resource development and exploration drilling to test extensions to the
east and at depth. In parallel, preliminary technical studies are
underway to assess potential mining scenarios for K-Zone, HW Zone, and
D-Zone with the potential to extend New Afton mine life beyond 2031.
-- At Rainy River, following the significant increase in open pit Mineral
Resources in 2024, the Company continues to expand, define, and evaluate
opportunities to extend open pit mine life and keep the processing plant
operating at full capacity beyond 2029. First quarter drilling was
focused on testing growth opportunities along the NW Trend open pit
target, while technical studies on potential pushbacks to the south of
the main pit advanced, including the evaluation of waste rock and
tailings storage options.
Consolidated Financial Highlights
Q1 2025 Q1 2024
------------------------------------------------------------ ------- -------
Revenue ($M) 209.1 192.1
------------------------------------------------------------ ------- -------
Operating expenses ($M) 103.4 106.8
------------------------------------------------------------ ------- -------
Depreciation and depletion ($M) 57.2 62.7
------------------------------------------------------------ ------- -------
Net loss ($M) (16.7) (43.5)
------------------------------------------------------------ ------- -------
Net loss, per share ($) (0.02) (0.6)
------------------------------------------------------------ ------- -------
Adj. net earnings ($M)(1) 12.0 13.1
------------------------------------------------------------ ------- -------
Adj. net earnings, per share ($)(1) 0.02 0.02
------------------------------------------------------------ ------- -------
Cash generated from operations ($M) 107.5 54.7
------------------------------------------------------------ ------- -------
Cash generated from operations, per share ($) 0.14 0.08
------------------------------------------------------------ ------- -------
Cash generated from operations, before changes in non-cash
operating working capital ($M)(1) 90.0 72.5
------------------------------------------------------------ ------- -------
Cash generated from operations, before changes in non-cash
operating working capital, per share ($)(1) 0.11 0.11
------------------------------------------------------------ ------- -------
Free cash flow ($M)(1) 24.9 (14.9)
------------------------------------------------------------ ------- -------
-- Revenue increased over the prior-year period primarily due to higher
metal prices and higher copper sales volume, partially offset by lower
gold sales volume.
-- Operating expenses were in-line with the prior-year period. Depreciation
expense decreased when compared to the prior-year period due to lower
gold production and open-pit tonnes mined at Rainy River.
-- Net earnings increased over the prior-year period primarily due to an
increase in revenues. Adjusted net earnings1 were relatively in-line with
the prior-year period.
-- Cash generated from operations and free cash flow1 increased over the
prior-year period primarily due to higher revenue.
Consolidated Operational Highlights
Q1 2025 Q1 2024
Gold production (ounces)(4) 52,186 70,898
------------------------------------------------------------ ------- -------
Gold sold (ounces)(4) 52,164 70,077
------------------------------------------------------------ ------- -------
Copper production (Mlbs)(4) 13.6 13.3
------------------------------------------------------------ ------- -------
Copper sold (MIbs)(4) 13.2 12.0
------------------------------------------------------------ ------- -------
Gold revenue, per ounce ($)(5) 2,864 2,061
------------------------------------------------------------ ------- -------
Copper revenue, per pound ($)(5) 4.17 3.64
------------------------------------------------------------ ------- -------
Average realized gold price, per ounce ($)(1) 2,894 2,090
------------------------------------------------------------ ------- -------
Average realized copper price, per pound ($)(1) 4.30 3.86
------------------------------------------------------------ ------- -------
Operating expenses per gold ounce sold ($/ounce,
co-product)(3) 1,437 1,106
------------------------------------------------------------ ------- -------
Operating expenses per copper pound sold ($/pound,
co-product)(3) 2.15 2.44
------------------------------------------------------------ ------- -------
Depreciation and depletion per gold ounce sold ($/ounce)(5) 1,100 897
------------------------------------------------------------ ------- -------
Cash costs per gold ounce sold (by-product basis)
($/ounce)(1,2) 869 874
------------------------------------------------------------ ------- -------
All-in sustaining costs per gold ounce sold (by-product
basis) ($/ounce)(1,2) 1,727 1,396
------------------------------------------------------------ ------- -------
Sustaining capital ($M)(1) 32.7 25.9
------------------------------------------------------------ ------- -------
Growth capital ($M)(1) 42.5 35.1
------------------------------------------------------------ ------- -------
Total capital ($M) 75.2 61.1
------------------------------------------------------------ ------- -------
New Afton Mine
Operational Highlights
New Afton Mine Q1 2025 Q1 2024 Gold production (ounces)(4) 18,278 18,179 ------------------------------------------------------------ ------- ------- Gold sold (ounces)(4) 18,432 16,980 ------------------------------------------------------------ ------- ------- Copper production (Mlbs)(4) 13.6 13.3 ------------------------------------------------------------ ------- ------- Copper sold (Mlbs)(4) 13.2 12.0 ------------------------------------------------------------ ------- ------- Gold revenue, per ounce ($)(5) 2,861 1,988 ------------------------------------------------------------ ------- ------- Copper revenue, per ounce ($)(5) 4.17 3.64 ------------------------------------------------------------ ------- ------- Average realized gold price, per ounce ($)(1) 2,947 2,108 ------------------------------------------------------------ ------- ------- Average realized copper price, per pound ($)(1) 4.30 3.86 ------------------------------------------------------------ ------- ------- Operating expenses ($/oz gold, co-product)(3) 662 740 ------------------------------------------------------------ ------- ------- Operating expenses ($/lb copper, co-product)(3) 2.15 2.44 ------------------------------------------------------------ ------- ------- Depreciation and depletion ($/ounce)(5) 1,331 1,216 Cash costs per gold ounce sold (by-product basis) ($/ounce)(1,2) (769) (34) ------------------------------------------------------------ ------- ------- Cash costs per gold ounce sold ($/ounce,co-product)(1,3) 696 811 ------------------------------------------------------------ ------- ------- Cash costs per copper pound sold ($/pound, co-product)(1,3) 2.26 2.67 ------------------------------------------------------------ ------- ------- All-in sustaining costs per gold ounce sold (by-product basis) ($/ounce)(1,2) (687) 241 ------------------------------------------------------------ ------- ------- All-in sustaining costs per gold ounce sold ($/ounce, co-product)(1,3) 720 894 ------------------------------------------------------------ ------- ------- All-in sustaining costs per copper pound sold ($/pound, co-product)(1,3) 2.34 2.94 ------------------------------------------------------------ ------- ------- Sustaining capital ($M)(1) 0.7 3.7 ------------------------------------------------------------ ------- ------- Growth capital ($M)(1) 23.3 27.7 ------------------------------------------------------------ ------- ------- Total capital ($M) 24.0 31.4 ------------------------------------------------------------ ------- ------- Free cash flow ($M)(1) 52.5 (3.6) ------------------------------------------------------------ ------- -------
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April 29, 2025 17:15 ET (21:15 GMT)
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