New Gold Inc.

Good morning, my name is Sylvie and I will be your conference operator today. Welcome to the New Gold's third quarter 2024 earnings conference call. Please note that 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 number one on your telephone keypad. And if you would like to withdraw your question, please press start in the number two. I would now like to hand the conference over to Ankit Shah, Executive Vice President of Strategy and Business Development. Thank you.

Thank you, Sylvie, and good morning, everyone. We appreciate you joining us today for New Goals third quarter 2024 earnings conference call and webcast. On the line today, we have Patrick Oden, President and CEO, Yoann Bouchard, our COO, and Keith Murphy, our CFO. In addition, we also have Luke Buchanan, Vice President, Technical Services, and Jean-Francois Ravenel, Vice President, Geology, available to assist during the Q&A portion of the call. Should you wish to follow along 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 slide two 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. There are caution that actual results in future events could differ materially from those expressed or implied in forward-looking statements. Slide 2 provides additional information and should be reviewed. We also refer you to the section entitled Risk Factors in Newgold's latest AIF, MD&A, and other filings available on CDAR+, which set out certain material factors that could cause actual results to differ. In addition, 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 will now turn the call over to Pat for some opening remarks.

Thank you. And good morning, everyone. We had a lot of success in the third quarter. We also had some difficult moments.

I take this opportunity to commend the team, not just for their accomplishments, but also for all the response and support each other. As a result, the company is well positioned, and we look forward with confidence. Our operations delivered the strongest position quarter of the year to date, with a 40% increase in production over the second quarter and a 13% decrease in all incident costs. Rainy River delivered an impressive 29% reduction in all insisting costs compared to the second quarter. A strong cost performance allowed us to leverage the higher middle price environment, and as a result, we had an excellent quarter financially with multiple records achieved, highlighted by a record quality free cash flow generation of $57 million. Yesterday evening, we also provided an update on our key growth projects. I'm pleased to report that new gold season has achieved commercial production and the duratory crusher and conveyor system has been commissioned well ahead of schedule. The importance of these milestones cannot be overstated and will have a direct and positive impact on production, cost, and cash flow. The René River also achieved first-development bore from the underground main zone. Although the ore tonnage from underground main will stay relatively low until we come in stoping next year, the achievement marked a key milestone in our plan to prepare the underground mine and ramp up production of fire-grade underground ore. We also both realized positive exploration results at both operations during the third quarter. At New Aston, the high-grid eastern sector of the mine continues to grow, with promising results at Key Zone and Ingwall Zone. And at Rainy River, in our first major excursion program since 2017, we are already seeing positive results extending open pit and under normalization. With that, I will turn the call over to Keith.

Thank you, Pat.

I'm on slide six, which has our operating highlights. As Pat mentioned, Q3 delivered the highest production and lowest costs of the year. Production totaled approximately 78,400 gold ounces and 12.6 million pounds of copper. This represents a 14% increase in gold production compared to the second quarter, driven by higher feed grades at Rainy Rivers. Consolidated all in sustaining costs for the quarter were $1,195 per gold ounce, in line with our plan. This is a decrease of 13% over the second quarter. This is highlighted by strong cost performance at both operations, with Rainy River continuing to decrease its all-in sustaining cost and New Afton achieving an all-in sustaining cost of negative $408 per ounce after considering the copper credits. We expect the increase in production and decrease in cost trends to continue into the fourth quarter, mostly as a result of higher production at Rainy River and lower costs at New Afton. Our total capital expenditures for the quarter were approximately $63 million, with $20 million spent on sustaining capital and $43 million on growth capital. At Rainy River, sustaining capital is primarily related to capitalized waste, capital components, and tailings management and construction. Sustaining capital is trending lower than guidance, as a lower proportion of waste tons are capitalized and a higher proportion remains in operating costs, but with no net impacts on Holland's sustaining costs. Growth capital is related to underground development as the underground main zone continues to advance. At New Afton, sustaining capital is primarily related to tailings management and stabilization activities. Growth capital is primarily related to the C-zone underground development and is tracking to the low end of the guidance range due to efficient capital management and early commissioning of the crush and convey system.

Turning to our financial results on slide seven.

Third quarter revenue was $252 million, which is a quarterly record. Q3 revenue was higher than prior year quarter, primarily due to higher metal prices and higher gold sales, partially offset by lower copper production. Cash generated from operations before working capital adjustments was $120 million, $0.15 per share for the quarter, higher than the prior year period, primarily due to higher revenues. Two goals generated record free cash flow of $57 million due to higher revenue and lower capital expenditures. The company recorded net earnings of approximately $38 million, $0.05 per share during Q3, and increased due to higher revenues. Earnings were also impacted by lower depreciation than originally planned due to the lower accounting asset base resulting from the deemed disposition of assets at New Aston when accounting for the OTPP buyback in May of this year. After adjusting for certain other charges, net earnings was 60, adjusted net earnings was 64 million or 8 cents per share in Q3, a significant increase compared to adjusted net earnings of 23 million in the third quarter of 2023. Our Q3 adjusted earnings include adjustments related to other gains and losses. At the end of Q3, we had cash on hand of $133 million and a liquidity position of $459 million. This is after the company made a payment of $43 million to the Ontario Teachers Pension Plan as part of the minimum cash guarantee under the terms of the original 2020 agreement, and also repaid $50 million of the $100 million drawn on its credit facility to fund the payment of the amending agreement with Ontario Teachers, which was entered into in May. And subsequent to the quarter end, we paid an additional $20 million on the credit facility, leaving a balance of $30 million outstanding, which we expect to pay off by the end of the year. To sum up, we remain in a very healthy financial position. Now, I'll turn the call over to Johan to walk through our operating highlights. Johan?

Thank you. Gold production in the third quarter was slightly below 78,400 ounces. Although it was the operation's strongest quarter so far this year, we were slightly behind plan at the end of September and we're expecting full year gold production to be about 15,000 ounces below the original guidance range. There's two main reasons for that. First, as discussed on the second quarter call, operations were impacted by a voluntary suspension following a fatality in July and the progressive return to full production. Both front-end loaders were temporarily removed from the fleet. Additional safety devices were installed on one of the units, and the same unit returned to production only a few days ago. The second loading unit is still waiting for parts and not necessary for production on the short term. Second, we have left high-grade ore on two benches in the open pit. Some rich pockets of high-grade ore on the 160 and 150 benches were lower tons and tonnage than originally expected. Although the impacted volume was relatively small, the reduction in high-grade mill feed impacted gold production. Going forward, the team has reviewed the occurrence of high grade blocks, considering additional grade control data and historical reconciliation, leading to an adjustment of a small percentage of our block to mitigate risk. I am confident in the open mine plan for the last quarter of this year, and our 2025 and 2026 production outlook remains unchanged. Despite The lower gold production, the team has done an excellent job to control cost. The third quarter all-in sustaining cost is about 29% lower than the previous quarter at $1,327 per ounce on a byproduct basis. With the fourth quarter expected to be a lower cost quarter of the year, we are trending to the top end of the guidance range for the full year.

Morning, it's like 10.

Rainy River also completes some significant project milestone in the underground mine during the third quarter. As you know, the underground mine is divided into two main sectors, encrypted, which has been in production since 2022, and the much larger underground main sector, which we're currently developing. In Q3, raised burrowing on the main fresh airways and the second portal located in the east wall of the pit were completed. The second portal will provide a second means of egress and improve ventilation for Underground Main and will also significantly reduce the underground haulage distances. The operation also achieved first-oil development at Underground Main ahead of schedule. Although the ore tonnage is still quite small, it marks a significant milestone in our plan to prepare the underground main sector for stoping in the first half of next year and ramp up to about 5,500 tons per day by 2027. Turning now to New Aston on slide 11. New Afton delivered another strong operating quarter. B3 continued to deliver to plan with season ramping up well, leading to a 31% increase in tonnage over the third quarter last year, offset by the planned lower gold and copper rate from B3. Uninterested cost decreased significantly compared to the previous year period, driven by lower operating expenses, lower sustaining capital spent, and high byproduct revenue. The first nine months at New Aston deliver according to plan and we're trending favorably with the annual plan. We continue to transition from the B3 cave to sea zone and expect to see a continued ramp up in sea zone mining rate throughout the year. We expect mill throughput to continue increasing in the fourth quarter, partially upset by lower feed grade due to the case draw sequence, leading to a fairly consistent core legal and copper production profile as planned. I've been weighing with on slide 12. Seasonal commercial production and commissioning of the gyratory crusher and counter system is completed two months ahead of schedule and on budget. With the material and link system now fully operational, truck haulage is eliminated from C-Zone, removing production constraints and resulting in significant cost reduction going forward. We also completed a total of 18 drawbells as of mid-October, achieving hydraulic radius and commercial production in C-Zone. These two milestones are transformative for New Afton, increasing production and decreasing costs to generate meaningful cash flow. I would like to provide an update on some of the technical studies that we're working on to unlock additional value at Trinity River and New Afton, following the positive exploration results from both operations. At Rennie River, after adding Phase III to mineral reserves at the end of last year, we extended the open pit mileage by approximately one year and defer reclaiming of the low-grade stockpile. Based on the near surface exploration results this year and considering a high gold price, we're now looking at leveraging the existing mill capacity and open pit mining fleet to further extend the open pit mine life while keeping capital investment to a minimum. While still in the early stages, we have identified potential opportunities to add an additional pushback to the main pit and potentially some smaller satellite pits. At new ASTEM, the company continues to optimize C-Zone with the potential to increase mineral reserves at new additional capital expenditure. The team is also advancing the east extension technical study with the objective of adding a new high-grade zone to the east of C-Zone. This extension has the potential to improve the New Afton copper and gold production profile and also to unlock other high-grade zones in the eastern section of the mine, including K-zone and hanging wall zone. In terms of news flow, the first quarter of 2025 will be active for the company. The company will report year-end 2024 mineral reserves and mineral resources in February 2025. Our three-year operational outlook will also be provided in February, supported by an investor and analyst technical session. And the technical information for both operations will be provided in updated MI43-101 technical report in the first quarter of 2025. With that, I will hand over the presentation to Pat for closing remarks.

Thank you, Will. Slide 15 summarizes our 2024 outlook. For the full year, we expect conservative gold production to be slightly below the range that we present at the start of this year. While new active gold production is expected to be at the top of the guidance range, the river is expected to be below the guidance range due to the reasons that we outlined earlier. Although gold production is slightly lower than planned, all other consolidated operational metrics are in line with or better than target. Copper production is on track to be at the midpoint of the guidance range, and consolidated oil and sustainable costs are trending to the lower end of the guidance range. This is a testament to the team operational discipline in capital management. South Indian capital is striking below the low end of the guidance range, and the Gulf capital is striking to the low end of the guidance range, partly the result of early commissioning of the mineral handling system at the US. Before handing over for questions, this slide summarizes some of New Gold's key accomplishments. Five months into the year, we have already successfully delivered the majority of our stated strategic goals. A highlight for me has been the cost performance of our operations, as we have highlighted throughout this presentation. By achieving our cost targets, even with the slightly lower gold production, the operations are realizing increasing margins with the higher middle prices. The increasing margins, together with production growth and declining capital spending over the guidance period, drives higher free capital. As previously reported, we achieved our free cash flow injection point in Q2 slightly ahead of schedule, and we have just achieved a record quality free cash flow for the company. Another key accomplishment is the successful completion of key projects in our response. From new goals, from new absence season to many rivers under our main project and thinning damways, the team consistently delivers projects on schedule and on budget. Projects' execution is now one of New Bowl's biggest strengths. With the operation running well and project advancing as planned, the company has included a first-round program this year. In Q3, we report positive results at both operations, which we expect to be reflected in our year-end reserves and resources updates. And finally, We reduced Ontario teachers' free cash flow interest at New Athens from 46% to less than 20% in Q2, generating meaningful shareholder value and increasing our exposure to a high-quality operation with significant exploration of site. This completes our presentations. We'll now turn it back to the operator for the Q&A portion of the call. Shirley?

Thank you, sir. Ladies and gentlemen, as stated earlier, if you would like to ask a question, please press star followed by 1 on your touch-tone phone. You will then hear a prompt that your hand has been raised. And if she should wish to decline from the polling process, please press star followed by 2. And also note that if you're using a speakerphone, you will need to lift the handset first before pressing any keys. Please go ahead and press star 1 now if you have any questions. And your first question will be from Mike Parkin at National Bank. Please go ahead.

Thanks guys for taking my questions. If I'm looking at slide 13, it's an aerial view of your open pit. Just to be clear, you had some issues in the past with grade reconciliation. If I remember correctly, that was in the North Lobe. But is that not completely done and behind you? And if I'm looking at it in the right orientation, that is the right side of the picture where you're actually backfilling that pit. what seems to be a temporary issue is not in that problematic area of the past. That's done and behind you completely.

Am I correct on that? Hi, Mike. This is Jay. I can answer your question.

So, no, this is not in the North Pole. It's where we're currently mining. So, as you know, I started about three years ago in gold.

And during that period, you can pick the sequence out well.

But like we see in any mine on a monthly basis, we see some positive and negative variants, but overall, the answer is balance. And like Joanne mentioned earlier, on two benches, we have rich pockets of hydrate ore that were lower than expected. Going forward, there's only a few of those hydrate blocks remaining in phase four mineral reserves. So we've applied the capping on those and any blocks to improve mine timing. We don't believe it will have an impact on our 2025 and 2026 production outlook.

Okay, that's great.

And then that new Afton, can you just give us a bit more color, like you've got the underground crusher online, the conveyor. Can you just give us a bit more color of how and when that's going to come on and like what kind of tonnage rates you're tracking at for like say the month of October, because that was kind of, from what I understood from the site tour last year, that was kind of the key deliverable to unlocking the tonnage, which is up quite a bit quarter over quarter, but we should, you know, how soon do you expect to be able to bring that mill up to like full capacity now that you're really kind of unlocking the potential T-zone with, well, both the conveyor system and crusher, but I guess also the hydraulic radius being achieved, do you expect that to be several quarters, or could we actually see that achieved relatively early into 2025?

Thank you, Mark. Patrick speaking. So the first part of it is, as you want to explain, we will accelerate the draw of V3. So I think it's one thing. And the fact that we were able to start the conveyor and crushing system in advance, it's eliminating all the trucking that were coming up the ramp to discharge the neural fiber close of V3. So it's a huge cost saving for us. And also if these equipment were interacting with development activities and construction activities, so it will be, it will improve the efficiencies of all of our work moving forward. So we want to see that in the short term. The fact is that the blockade is a blockade, so the pace of the blockade is something that we should not, if you accelerate, then you have short-term gain for a long-term pay. So we have a good sequence that we present in the outlook. So if you look at the depreciation curve of B3 and the progressive curve of C-zone in the outlook, so what that means is we'll accelerate B3, and it means that C-zone will show up more in the second part of the year. But basically, we respect the ramp-up, and this progressive ramp-up will go to 14,500 tons per day at the end of December 2025. Okay.

Is there any major shutdowns that we should be thinking about for either Q4 or Q1 of next year?

No. You're talking about New Athens or Utah? Either one.

No, nothing that is exceptional. So we have regular shutdowns at both sites, but to do the maintenance, we are planning our mining sequence and our pollution profile and nothing exceptional going forward.

Great. Thanks very much. That's it for me. Thank you.

Thank you.

Next question will be from Eric Windmill at Scotiabank. Please go ahead.

Great. Good morning, Patrick and team. Thanks for taking my question. Nice to see the results out this quarter. Maybe just quickly on the guidance for the balance of this year. Obviously, production's down a bit. It's rainy, but costs also coming down as well. Any additional comments there in terms of how you're able to get the cost down here for the balance of the year?

Yeah, it's Keith. You know, I'd say going side by side at Rainy River, the team has done a great job of focusing on cost control and optimization, which has added the impact of reducing, you know, gross costs and unit costs as well. You know, the open pit drilling and blasting, they've made improvements there, you know, reducing haulage distances as well. In the mill, you know, they've been able to optimize and lower consumable consumption. And then on the maintenance side, you know, optimize again and, you know, look at our preventance maintenance programs and optimize and reduce costs there. On the capital side, then, you know, we're performing the tailings on ourselves. So we're at the raise this year, and we're seeing savings there. And also, then, on the overall mining cost, if capital stripping is down, there's no net impact on ASIC. So overall, kind of a lower gross cost at Rainy River. At New Afton as well, Dan, you know, you've seen the decrease in mining costs every quarter as the C-zone tonnage continues to ramp up. So that's, you know, having a really positive impact on costs as well.

Okay, great. Thanks for that. I really appreciate it. Maybe just one more on New Afton if I could. So obviously good positive progress here on the tailings projects. Anything additional milestones you're looking at for the rest of this year or sort of stable over the winter months?

Is that typically how it operates?

We are really pleased by the new warning of the tailings and the We are overperforming compared to the original plan, so we are sliding that plan. So I think we had a pretty dry year this year, and as you know, in D.C. it was pretty warm too, so the evaporator overperformed compared to what we planned. We maximized the utilization period for the evaporator too.

The team is in control. Nothing to report here. Okay, thank you.

Great to hear. I know I'll certainly be watching that. All right, thanks for taking my questions. I'll hop back in the queue. Cheers.

Thank you. Next question will be from Jeremy Hoy at Canaccord Genuity. Please go ahead.

Hi, everyone. Thanks for taking my questions. A lot of them have been answered already, but I've got a few more to touch on. You mentioned that there'd be an immediately positive impact on costs from the early commercial production at New Afton. Can you provide any more specifics on how you expect this to impact the rest of this year and early next?

Yeah, it's Keith again. As Yolande mentioned, you know, the commissioning eliminates the haulage from the sea zone level and increases our ton too. But throughout 2024, you know, we've continued to see a decrease in the mining cost per ton as sea zone tonnage increases, and we realize the benefits from the capital investments that we've made. That trend will continue into Q4 and into 2025. I'd say once, you know, fully ramped up at sea zone, we'll have a similar cost profile to what we had in, you know, the early lift one from 2012 to 2020.

It's all trending very well. Got it. Understood.

And in terms of the ramp up, the timing, like we're still talking about 14,500 tons per day. in 2025, when are we expected to see that in 2025?

If I'm looking at the production profile, it's in Q4. So we have a time range for that. You know, when we develop a block cave, actually, we have 18 draw bills. At the end, we'll have close to 90 draw bills. So our objective is to draw as equal as possible. So we are performing extremely well on the development. We are doing also extremely well in construction, actually. So, and if we are, when we'll get close to that, you know, just to remind you, 14,500 is the average ton process per day. So, but the processing plant is having a 16,000 tons of capacity, so the 14,500 is including the shutdown. But actually it will, it will happen mostly

Okay, that's helpful. Thank you very much. The last one for me is on the automation system. You mentioned that that would be online in H1 2025. Are you providing more specifics on how this will improve mining costs?

I can start a new one. We'll cover it. But, you know, the main advantage is, you know, when you go down, you have to use a vehicle just to transport the employee. It's mostly half an hour to go down. It's probably 25, 40 minutes to go up. And in D.C., we're restricted to a limited to 10 hours per day on the ground. So the big advantage of that is the fact that we operate between shifts. and it will be steady operations. So, basically, it's what is important, and it's safe, and people are on the surface. So, you know, I'm really impressed, honestly, and what they presented to me at the beginning and what they achieved today is really impressive. And it's difficult for us to factorize that in the cost, but we are willing to improve. But, basically, it will mainly provide a steady operation on the ground in the 24-hour business moving forward.

Okay, thanks.

I really appreciate the color.

I'll step back in the queue.

Thank you. Next question is from Michael Serpico at RBC Capital Markets. Please go ahead.

Yeah, thanks very much. Maybe first on Rainy River. Could you talk a bit more about what the potential there is for a pushback or the other satellite that you mentioned? Would that be purely gold price driven at this point or is it dependent on further drilling or other considerations? And maybe can you quantify the potential opportunity there even at a high level?

Hi, it's Luke here.

So like Johan mentioned, there's a few different opportunities. So one of them is that for another pushback to the main pit.

So that one we already have the measured and indicated resources for. So we don't need any additional building for that pushback. It would just be depending on the core price. So we're currently evaluating that at the moment.

We're going to provide an update in the first quarter.

For some of the other satellite pits around the main pit, we are continuing to do some RC building in those areas.

Sorry, so just so I heard you right, should we be expecting an update on those opportunities with the updated technical report, or is that longer term?

Yeah, they'll be included in the technical reports, either as resources or possibly as reserves.

Okay, and then maybe just one follow-up. If you were to start refocusing on open pit operations at Rainey, would that have anything to do, or would it impact the plans for underground development, or would you think of doing both in parallel?

We'd continue to do both in parallel.

The main benefit would be to defer the reclaim of the load rate stockpile and keep the mill full for longer. Right. Okay. And then maybe... Sorry, Mike. The benefit for us would be to provide higher quality answers to your feed.

Right. Right. Offsetting the lower grade. Right. No, it makes sense. You know, maybe a similar conversation on capital allocation. Obviously, gold driving that opportunity, gold up about 400 since you reconsolidated part of New Afton from teachers, now declared commercial production. How are you thinking about the remaining 20% stake there? And is a full reconsolidation something that we should be thinking about that you're thinking about when it comes to capital allocation?

It's part of the possibility that we have. So we're always looking for these type of possibilities. So the first trench that we buffed was really strategically important for us, and I think it creates value for our shareholders. We're still keeping our mind open, and it's one of the possibilities that we're currently looking at.

So would it be fair to say, if I can put words in your mouth maybe, that you have significant opportunities for organic growth, both at Rainy and potentially at New Afton, that maybe keep you looking internal rather than potentially looking outside the company for growth? Is that a fair assessment?

I don't like to bust myself in this type of question, Mike, as you know, but we're keeping all our options open. So I strongly believe that a good way to return value to shareholders is through organic growth when the capital is reasonable. And we are very careful about that, and I think we have a nice possibility of our two assets. And we respect our people, and I think that if we can increase the mine life, we can position themselves for the future, and we really appreciate that. For the other options, I can tell you that all of my peers, we are vigilant. We are keeping our eyes open. And as we did recently in May, we want to grow, but we don't want to grow to be big. We want to grow to create value. If we're not creating value, we're not growing. We don't want to trade about for quarters. And we are, but we are vigilant. And we have capacity to... to address different challenge. So, we have a team today that were as good to mine open pit and underground, and we have a lot of skills to mine different type of our body underground, and we showed experience also in the Americas. So, we keep our eyes and all our options open.

Great. Thank you very much for the answers.

Thank you. Next question will be from Anita Soni at CIBC. Please go ahead.

Hi, Patrick, Johan, and team. I just wanted to ask a little bit more about, firstly, at New Afton, could you just let us know how much the tonnage was this quarter from the C-Zone?

The tonnage from C-Zone, so in the total, the total tonnage and what C-Zone was represented?

Sorry, I mean, you're all cute. So you said 1,000 tons per day from the sea zone? Yeah, it's about, I mean, we just extract enough to remove the flooding factor. I mean, that's all. But what we're going to do in Q4, which is on that topic, is we're going to more prioritize the construction of the broad belt, and we're going to last all at once pretty much the other broad points to be more efficient at construction and save some costs. But the goal is to have, at the end, about 30 corbels fully developed to increase the footprint of the case.

Okay. Second question around Rain River as it pertains to next year in 2026. You said you're confident that it won't impact the mine plan. Can you just talk about, I guess, the evaluation that you did on the 2025 and 2026 grade profile to come to that conclusion?

Yeah, for sure. I mean, so your question is about maybe to reiterate our outlook 2025 and 2026. Is that right, Anita? That's what you're looking for?

Yes. I'm trying to understand why, you know. Okay.

Go ahead. Very good. So what we did, as you know, we're in the process of preparing our budget and loan, and we basically, we change, we look at the, I would say, the Trinidad River We looked at the blocks that were remaining in phase four, and we don't have many blocks that have been affected to what happened in two periods that maybe before. We have really on those. We applied some capping as well on those blocks, but again, there's not any of those consistent going forward. We re-sequenced everything, and basically we came up pretty much as I would say the same on plan that we have, that we presented at the last year outlook.

Yeah, so I guess that explains the fourth quarter impacts, but I was just trying to understand how you basically came to the conclusion that there would be no impact in 2025 and 2026. Are there no higher rate overalls? Yeah. Or did you apply capping?

Exactly. I mean, we did apply all the factor on the remaining of the block model, the factor I just was talking about here. And basically, we revamped the mine plan, and we came up pretty much at the same production.

So maybe higher times lower rate, or is it completely the same? No, it's...

I mean, the capping that's been put is really, I would say, impacting on this year, but no much impact in the remaining years because there's no much high-grade blocks.

Okay. All right. And then just in terms of the sustaining capital guide that you talked about being about $20 million under some from operational efficiencies and tailings dam, I guess, wins there. But the other... aspect you said was a little bit of timing of spending. So how much do you think would be pushed into 2025 for the sustaining capital?

Yeah, not much. So at Rainy River, the majority of the reduction in sustaining capital is effectively reclassification to OPEX. So there's about $2 million in savings on the tailings facility, but the remainder is reclassed to OPEC. So that is all savings and not much deferrals at Rainy River. At New Afton, in terms of capital, a little bit of deferrals on the growth side as we're down to the low end of the range, but some savings as well as the team have optimized and commissioned the conveyor early.

So maybe $5 million? $5 million. pushed into next year? Yes.

Okay.

And then lastly on Rainey, as you brought it up with the stripping, sorry, the capital moving to OPEX, is that a result of higher gold prices and waste becoming more? I'm just trying to understand why that happened and what the future. It's

It's just the timing of the strip ratio. From an accounting perspective, we have a cap on our ratio that we capitalize. And when we were doing our original guidance, just the way the strip ratio ended up over the year. But the main message is there's no change in the mine plan in terms of the total tons. We've stripped in line with plan. It's just a little bit on the accounting reclassification.

Okay, and then so next year, as I recall earlier this year, you had said that the remaining life of mine plan, the strip was at the start of the year 1.95, and you're doing, I guess, about three or more right now. So is it fair to say in 2025, 2026, you're going to be below one to one?

Yeah, I haven't got that number exactly in front of me, but you're right. It's, you know, 2024 was focused on stripping and exposing that or for 25 and 26 in Phase 4. So, yes, we will see a significantly reduced strip ratio in 25 and 26. All right.

Okay, that's it for my questions. Thank you for taking my questions there. Thank you.

Next question will be from Lawson Winder at Bank of America Securities. Please go ahead.

Thanks very much, operator. Good morning, New Gold team. First of all, could I ask about the reserve update for year end? What are you guys thinking in terms of gold and copper price assumption in estimating that reserve and resource update, and particularly as it pertains to the exploration success you've had to date?

Yeah, hi, it's Luke again here.

So just a reminder that at the end of last year, we used metal prices of $1,400 per ounce of gold and $3.25 per pound of copper. So with the significant increase in the consensus long-term prices this year, we are looking to honestly increase those metal price assumptions for year-end reserves, but we're still running some sensitivities and evaluating that at the moment, so I can't provide the exact numbers for sure.

Sorry, did you say modest increase?

Yeah, it's still going to be significantly below the spot prices, but, yeah, we are looking at an increase compared to what we did last year.

Okay, great. And, I mean, I was also going to ask about your exploration budget for next year. Given that you're still in that process, I'm not sure if you can give us a very specific number, but perhaps you could give us a directional range. Do you anticipate that exploration budget to increase in 2021? 5 versus 24?

We have two things here. Because Jean-Francois is in the room, Jean-Francois presents projects in 2024 at the beginning of the year. And so the way that we are working, this project was a good project. We were successful in most of them. Some others, its geology, its exploration, we were not. And depending on the progress, we are shipping more so. We jumped about just two times during the year based on the exploration projects and the ideas that were generated by the team. So for next year, we're still working on this. We are also, we are training. So the success of the current exploration work will take the next step. So we will probably be next year, as much as we can, aggressive. It was excellent for the future and expect that next year also to define to do some, to test other property. We have rivers, so we cannot, I don't want to, I can't pass me the number here. We're working on that as much as we can to try to get the full support to execute this on GPS.

Okay. Yeah, thank you for that color. And then if I could just ask one more question. As you think about potential expansions to Rainy River, are there areas to where you could expand that would be exclusive of the Royal Gold stream or the areas you're looking at also subject to that stream? Thanks.

Yeah, the stream is on the land package at Rainy River. So, you know, I think most of the pit pushbacks, et cetera, would be subject to the stream. But the team are always looking at opportunities around to see, you know, if there's other opportunities.

But, yeah, most of the pushbacks would be subject to the stream. Okay. Thanks very much, John. Appreciate it.

Thank you.

And at this time, Mr. Shaw, we have no other questions registered. Please proceed.

Thank you, Sylvie. And to everyone who joined us today, thank you again. As always, should you have any additional questions, please do not hesitate to reach out to us by phone or email. Have a great day.

Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines.