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spk05: Good morning. My name is Michelle and I will be your conference operator today. Welcome to the New Gold fourth quarter 2022 earnings conference call and webcast. 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. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press star, then the number two. I would now like to hand the conference over to Anne Kitshaw, Vice President of Strategy and Business Development. Please go ahead.
spk02: Thank you, Michelle, and good morning, everyone. We appreciate you joining us today for Newgold's fourth quarter and year-end 2022 earnings conference call and webcast. On the line today, we have Patrick Odan, President and CEO, and Rob Chauzet, our CFO. Should you wish to follow along with the webcast, please sign in from our homepage at newgold.com. Before the team begins the presentation, I'd like to direct your attention to our cautionary language related to forward-looking statements found on slides two and three of the presentation. Today's commentary includes forward-looking statements relating to Newgold. In this respect, we refer you to our detailed cautionary note regarding forward-looking statements in the presentation. You are cautioned that actual results in future events could differ materially from those expressed or implied in forward-looking statements. Slides 2 and 3 provide additional information and should be reviewed. We also refer you to the section entitled Risk Factors in NUGLE's latest Annual Information Form, MD&A, and other filings available on CDAR, which set out certain material factors that could cause actual results to differ. In addition, at the conclusion of the presentation, there are a number of end notes that provide important information and should be reviewed in conjunction with the material presented. I'll now turn the call over to Rob. Thanks, Ankit, and good morning.
spk10: I'll start with slide five, which provides our operational highlights. The production details on this slide are consistent with our January production press release. During Q4, the company produced 97,800 gold equivalent ounces. This amount consisted of 6.9 million pounds of copper and approximately 69,700 gold ounces from Rainier River and 10,900 gold ounces from New Afton, totaling 80,700 gold ounces. The lower equivalent gold production as compared to the prior year quarter is primarily in the lower tons mined and processed at New Afton. Our operating expense per equivalent ounce was higher than the prior year quarter, primarily due to lower production and therefore lower sales volume. Consolidate all and staying costs for the quarter were 1668 per equivalent out higher than the prior year quarter, primarily due to lower copper sales volume and higher sustaining capital spend. We continue to invest in staying capital at our operations during the fourth quarter, with the impact of sustaining capital spend proud being $360 per ounce in the quarter. Turning to our financial results slide on slide six, fourth quarter revenue was 162.8 million, driven by sales of 78,500 gold ounces at an average realized price of 17.51 per ounce and sales of 6.8 million pounds of copper at 374 per pound. Q4 revenue was lower than the prior quarter, primarily due to lower copper sales volumes and prices. Our operating cash flow before working capital adjustments was $44.3 million or $0.06 per share for the quarter, lower than the prior year quarter. The prior year period included the sale of the Blackwater Stream. The company recorded a net loss of $16.9 million or $0.02 per share during Q4 compared to net income of $0.22 per share in Q4 of 2021. And again, that prior year period included the Blackwater stream gain. After adjusting for other certain charges, net loss was 6.3 million or one cents per share in Q4 compared to net earnings of four cents per share in the fourth quarter of 2021. Net loss increases primarily due to lower revenues. Our Q4 adjusted earnings includes adjustments related to our gains and losses, which include unrealized adjustments on the Rainy River Stream mark-to-market and the free cash for royalty at New Afton. Our MD&A has further details on these non-nongap measures. Our total capex and leases for the quarter was $74.3 million. $37.2 million was spent on sustaining capital and $37.1 million on growth capital. Sustaining spend was primarily related to the plan's tailings work at both operating assets, capital stripping at Rainy River and B3 mine development at New Afton. Our growth capital was focused on our project development, specifically C-Zone at New Afton and the underground intrepid zone at Rainy River. Slide seven provides our capital structure. Cash on hand at year end was $201 million and liquidity was $597 million. The decrease in cash from the prior quarter is primarily due to continued capital investments at our operations. With that, I'll turn the call over to Pat.
spk09: Thank you, Rob, and good morning, everyone. The slide line provides a summary of our 2023 operational outlook. Gold equivalent production is expected to increase by over 13% to 365,000 to 425,000 ounces. Similar to last year, we expect the production distribution to be more heavily weighted to the second half of the year at approximately 55%. All in-sustaining costs are also expected to decrease by over $150 per ounces to $1,500 to $1,600. Costs are lower than last year due to the lower sustaining capital expenditures in higher productions. We expect the cost to trend lower in the second half of the year consistent with the production profile. Sustaining capital is expected to be $140 to $170 million. As mentioned, sustaining capital is expected to decrease versus last year primary as we complete B-Tree development at New Afton. Growth capital is expected to be $115 to $155 million. This is an increase over last year, and it's fairly recent to the C-Zone development at New Afton and underground development at Rainy River. Flight tests provide further details on Rainy River 2023 outlook. Gold equivalent production is expected to increase to 235,000 to 265,000 ounces, primarily due to an increase in gold grade, ton mines, and process, as well as the ramp up of the interpret zone. Similar to last year, we expect the production distribution to be more heavily weighted to the second half of the year at approximately 55%. All in-sustaining costs are also expected to decrease to 1,475 to 1,575. costs are lower than last year, primarily due to higher productions. Sustaining capital is expected to be $125 to $135 million, primarily related to capital waste, annual tailings dam raise, maintenance program, and other sustaining capital related to the intrepid development. Growth capital is expected to be $20 to $30 million and is primarily related to the development of the intrepid zone and commencing development of the main underground zone below the pit. Slide 11 provides further details on New Afton 2023 outlook. Gold equivalent production is expected to increase by approximately 30% to 130,000 to 160,000 ounces as B3 production achieves steady state mining rates and higher gold and copper grades. B3 mining rates are expected to average approximately 8,000 tons per day as all drop-ons are already completed. All in-sustaining costs are also expected to decrease to $1,300 to $1,400. Costs are lower than last year, primarily due to the lower sustaining capital spend, with B3 development completed and higher production. Sustaining capital is expected to be $15 to $35 million, primarily related to the stabilization activities and tailing management. Growth capital is expected to be 130 to 150 million and is primarily related to the continued advancement of the C-Zone project, which will focus on mine development, infrastructure installation, and stabilization. Slide 12 provides an update on the company's consolidated reserves. Consolidated gold mineral reserves decreased by approximately 285,000 ounces compared to last year, only due to the annual mine depletion from bulk assets, resource minability at Rainier River, and ounces from sub-level cave and east cave recovery at New Afton.
spk01: In closing, I just want to spend a few minutes to discuss health and safety at New Gold.
spk09: Health and safety is our highest priority as our employees are the heart and soul of our business. In 2022, our total recordable injury frequency rate, or TRIFR, was 0.95, and significantly decreased by approximately 46% compared to 2021. We have implemented the Courage to Care campaign across our business to encourage and foster a safe culture for our over 1,500 employees across the company. We are extremely proud of this achievement, and in 2023, the health and safety of our employees will continue to drive Our success. This completes our presentation, so I will now turn it back to the operator for the Q&A portion of the call. Michelle?
spk05: Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session for analysts. If you would like to ask a question, please press star followed by the number one on your telephone keypad. If your question has been answered and you would like to withdraw from the queue, please press star followed by the number two. And if you are using a speakerphone, please lift your handset before pressing any keys. Please stand by while we compile the Q&A roster.
spk04: Ladies and gentlemen, once again, if you would like to ask a question, please press star 1 now. Mr. Shaw, there are no questions.
spk05: Oh, my apologies. We do have a question. Your first question will come from Mohamed Fadide of CIBC. Please go ahead.
spk06: Hi, Patrick and Tim. It's Mohamed Fadide from CIBC on behalf of Anita. Sorry, jumping in from conference call to conference call here, but I just wanted to ask on the production profile for 2023 if we should expect any sort of seasonality as we go through the year. And then second question was just on your cost profile for 2023. I may have missed that part, but if you could touch about any inflationary impact that you've seen that you incorporated in your guidance given the year-over-year lower guidance.
spk03: And I'm sure it's probably production. Thank you.
spk10: The production profile is slanted more towards the second half of the year, with basically 55% coming in the second half.
spk09: It's mainly related to the grade year, not the tolerance, but the grade itself.
spk10: Yeah, go ahead. I was going to say, as far as inflation, we have incorporated some inflationary impacts, primarily related to diesel and grinding media, which are the biggest increases. But as being a Canadian company, we've also hedged our CAD exposure, but also had some fuel. So we're working hard to mitigate any inflationary pressures.
spk03: Sounds good. Thank you so much.
spk04: There are no other questions. At this time, I will turn the conference back to Ankit Shah for any closing remarks. Thank you, Michelle.
spk02: And again, to everyone who joined us today, thanks again. If you have any follow-up questions, please reach out to us by phone or email. Have a great day.
spk05: Ladies and gentlemen, this does conclude your conference call for this morning. We would like to thank everyone for participating and ask you to please disconnect your line.
spk03: Good morning.
spk05: My name is Michelle and I will be your conference operator today. Welcome to the New Gold fourth quarter 2022 earnings conference call and webcast. 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. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press star, then the number two. I would now like to hand the conference over to Ann Kitshaw, Vice President of Strategy and Business Development. Please go ahead.
spk02: Thank you, Michelle, and good morning, everyone. We appreciate you joining us today for Newgold's fourth quarter and year-end 2022 earnings conference call and webcast. On the line today, we have Patrick O'Dan, President and CEO, and Rob Chauzet, our CFO. Should you wish to follow along with the webcast, please sign in from our homepage at newgold.com. Before the team begins the presentation, I'd like to direct your attention to our cautionary language related to four looking statements found on slides two and three of the presentation. Today's commentary includes forward-looking statements relating to Nugold. In this respect, we refer you to our detailed cautionary note regarding forward-looking statements in the presentation. You are cautioned that actual results in future events could differ materially from those expressed or implied in forward-looking statements. Slides 2 and 3 provide additional information and should be reviewed. We also refer you to the section entitled Risk Factors in NUGLE's latest annual information form, MD&A, and other filings available on CDAR, which set out certain material factors that could cause actual results to differ. In addition, at the conclusion of the presentation, there are a number of endnotes that provide important information and should be reviewed in conjunction with the material presented. I'll now turn the call over to Rob.
spk10: Thanks, Ankit, and good morning. I'll start with slide five, which provides our operational highlights. The production details on this slide are consistent with our January production press release. During Q4, the company produced 97,800 gold equivalent ounces. This amount consisted of 6.9 million pounds of copper and approximately 69,700 gold ounces from Rainier River and 10,900 gold ounces from New Afton, totaling 80,700 gold ounces. The lower equivalent gold production as compared to the prior year quarter is primarily in the lower tons mined and processed at New Afton. Our operating expense per equivalent ounce was higher than the prior year quarter, primarily due to lower production and therefore lower sales volume. Consolidate all and staying costs for the quarter were 1668 per equivalent out higher than the prior year quarter, primarily due to lower copper sales volume and higher sustaining capital spend. We continue to invest in staying capital at our operations during the fourth quarter, with the impact of sustaining capital spend per ounce being $360 per ounce in the quarter. turning to our financial results slide on slide six fourth quarter revenue was 162.8 million driven by sales of 78 500 gold ounces at an average realized price of 1751 per ounce and sales of 6.8 million pounds of copper at 374 per pound q4 revenue was lower than the prior quarter primarily due to lower copper sales volumes and prices Our operating cash flow before working capital adjustments was $44.3 million or $0.06 per share for the quarter, lower than the prior year quarter. The prior year period included the sale of the Blackwater Stream. The company recorded a net loss of $16.9 million or $0.02 per share during Q4 compared to net income of $0.22 per share in Q4 of 2021. And again, that prior year period included the Blackwater stream gain. After adjusting for other certain charges, net loss was 6.3 million or one cents per share in Q4 compared to net earnings of four cents per share in the fourth quarter of 2021. Net loss increases primarily due to lower revenues. Our Q4 adjusted earnings includes adjustments related to our gains and losses, which include unrealized adjustments on the Rainy River Stream mark to market and the free cash for royalty at New Afton. Our MD&A has further details on these non-nongap measures. Our total capex and leases for the quarter was $74.3 million. $37.2 million was spent on sustaining capital and $37.1 million on growth capital. Sustaining spend was primarily related to the plan's tailings work at both operating assets, capital stripping at Rainy River and B3 mine development at New Afton. Our growth capital was focused on our project development, specifically C-Zone at New Afton and the underground intrepid zone at Rainy River. Slide seven provides our capital structure. Cash on hand at year end was $201 million and liquidity was $597 million. The decrease in cash from the prior quarter is primarily due to continued capital investments at our operations. With that, I'll turn the call over to Pat.
spk09: Thank you, Rob, and good morning, everyone. The slide line provides a summary of our 2023 operational outlook. Gold equivalent production is expected to increase by over 13% to 365,000 to 425,000 ounces. Similar to last year, we expect the production distribution to be more heavily weighted to the second half of the year at approximately 55%. All in-sustaining costs are also expected to decrease by over $150 per ounces to $1,500 to $1,600. Costs are lower than last year due to the lower sustaining capital expenditures in earlier productions. We expect the cost to trend lower in the second half of the year consistent with the production profile. Sustaining capital is expected to be $140 to $170 million. As mentioned, sustaining capital is expected to decrease versus last year primary as we complete B-tree development at New Afton. Growth capital is expected to be $115 to $155 million. This is an increase over last year and is fairly recent to the C-zone development at New Afton and underground development at Rainy River. Slide 10 provides further details on Rainy River 2023 outlook. Gold equivalent production is expected to increase from 235,000 to 265,000 ounces, primarily due to an increase in gold grade, tonne mines, and process, as well as the ramp up of the interpret zone. Similar to last year, we expect the production distribution to be more evaluated to the second half of the year at approximately 55%. All in-sustaining costs are also expected to decrease to 1475 to 1575. costs are lower than last year, primarily due to higher reductions. Sustaining capital is expected to be $125 to $135 million, primarily related to capital waste, annual tailings dam raise, maintenance program, and other sustaining capital related to the intrepid development. Growth capital is expected to be $20 to $30 million and is primarily related to the development of the intrepid zone and commencing development of the main underground zone below the pit. Slide 11 provides further details on new Afton 2023 options. Gold equivalent production is expected to increase by approximately 30% to 130,000 to 160,000 ounces as B3 production achieves steady state mining rates and higher gold and copper grades. B3 mining rates are expected to average approximately 8,000 tons per day as all drop-ons are already completed. All in-sustaining costs are also expected to decrease to $1,300 to $1,400. Costs are lower than last year, primarily due to the lower sustaining capital spend, with V3 development completed and higher production. Sustaining capital is expected to be $15 to $35 million, primarily related to the stabilization activities and tailing management. Growth capital is expected to be 130 to 150 million and is primarily related to the continued advancement of the C-Zone project, which will focus on mine development, infrastructure installation, and stabilization. Slide 12 provides an update on the company's consolidated reserves. Consolidated gold mineral reserves decreased by approximately 285,000 ounces compared to last year, only due to the annual mine depletion from bulk assets, resource minability at Rainier River, and ounces from sub-level cave and east cave recovery at New Afton.
spk01: In closing, I just want to spend a few minutes to discuss health and safety at New Gold.
spk09: The health and safety is our highest priority as our employees are the heart and soul of our business. In 2022, our total recordable injury frequency rate, or TRIFR, was 0.95, and significantly decreased by approximately 46% compared to 2021. We have implemented the Courage to Care campaign across our business to encourage and foster a safe culture for our over 1,500 employees across the company. We are extremely proud of this achievement, and in 2023, the health and safety of our employees will continue to drive Our success. This completes our presentation, so I will now turn it back to the operator for the Q&A portion of the call. Michelle?
spk05: Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session for analysts. If you would like to ask a question, please press star followed by the number one on your telephone keypad. If your question has been answered and you would like to withdraw from the queue, please press star followed by the number two. And if you are using a speakerphone, please lift your handset before pressing any keys.
spk04: Please stand by while we compile the Q&A roster. Ladies and gentlemen, once again, if you would like to ask a question, please press star 1 now. Mr. Shaw, there are no questions.
spk05: Oh, my apologies. We do have a question. Your first question will come from Mohamed Fadide of CIBC. Please go ahead.
spk06: Hi, Patrick and Tim. It's Mohamed Tidibe from CIBC on behalf of Anita. Sorry, jumping in from conference call to conference call here, but I just wanted to ask on the production profile for 2023 if we should expect any sort of seasonality as we go through the year and then Second question was just on your cost profile for 2023. I may have missed that part, but if you could touch about any inflationary impact that you've seen that you incorporated in your guidance given the year-over-year lower guidance, and I'm sure it's probably productive.
spk03: Thank you.
spk10: Production profile is slanted more towards the second half of the year, with basically 55% coming in the second half.
spk09: It's mainly related to the grade year, not the tonnage, but the grade itself.
spk10: Yeah, go ahead. I was going to say, as far as inflation, we have incorporated some inflationary impacts, primarily related to diesel and grinding media, which are the biggest increases. But as being a Canadian company, we've also hedged our CAD exposure, but also hedged some fuel. So we're working hard to mitigate any inflationary pressures.
spk03: Sounds good. Thank you so much.
spk04: There are no other questions. At this time, I will turn the conference back to Ankit Shah for any closing remarks. Thank you, Michelle.
spk02: And again, to everyone who joined us today, thanks again. If you have any follow-up questions, please reach out to us by phone or email. Have a great day.
spk05: Ladies and gentlemen, this does conclude your conference call for this morning. We would like to thank everyone for participating and ask you to please disconnect your line.
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