New Gold Inc.

Good morning. My name is Vincent and I'll be a conference operator today. Welcome to the New Gold's fourth quarter and full year 2020 for earnings 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 one on your telephone keypad. If you would like to withdraw a question, please press the star, then 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. Please go ahead.

Thank you, Vincent, and good morning, everyone. We appreciate you joining us today for Newgold's fourth quarter and full year 2024 earnings conference call and webcast. On the line today, we have Patrick Oden, President and CEO, and Keith Murphy, our CFO. In addition, we have Luke Buchanan, Vice President, Technical Services, and Jean-François Rabenel, Vice President, Geology, available to assist during the question and answer portion of the call. If you wish to follow along with the webcast, please sign in from our homepage at newgold.com. Before the team begins the presentation, I would like to direct your attention to our cautionary language related to forward-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. We 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 Annual Information Forum, 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 materials. Slide four highlights some of the key accomplishments of 2024. We accomplished a lot of our objectives we laid out at the start of the year. By prioritizing health and safety through our courage to care culture, we delivered a low TRIFR and continued to improve year over year. The company produced just under 300,000 ounces of gold and 54 million pounds of copper at an all-in-sustaining cost of $1,239 per ounce, beating the low end of our all-in-sustaining cost guidance range. This strong cost discipline led to increasing margins and delivering cash flow from operations of over 390 million and free cash flow of 85 million. Throughout the year, we successfully delivered on key project milestones. At New Afton, we achieved commercial production at C-Zone and commissioned the crusher and conveyor systems. At Rainy River, we mined the first development ore from the underground main zone. These milestones were accomplished on budget and ahead of schedule. Last week, we released updated technical reports for both assets. These reports incorporated mine life extensions at both sites and increased our underlying net asset value. Our exploration efforts throughout the year successfully replaced mining depletion of reserves on a gold equivalent basis. We plan to maintain this momentum in 2025 to unlock additional long-term value. Finally, in May, we increased our exposure at New Afton to over 80% following the transaction with Ontario Teachers, reducing their free cash flow interest from 46% to 19.9%. 2024 successfully positioned our company, and we look forward to building on this in 2025 to create significant value for our shareholders. With that, I will turn the call over to Keith. Thank you, Angus.

I'm on slide six, which has our operating highlights. Q4 production was pre-released back in early January, but it's worth reiterating certain points. Q4 delivered the highest production and lowest costs of the year. Production totaled approximately 80,400 gold ounces and 14.5 million pounds of copper. The increase in gold production compared to the third quarter was driven by higher feed grades at both sites. Consolidated all-in sustaining costs for the quarter were $1,018 per ounce, a decrease of 15% over the third quarter. This is highlighted by strong cost performance at both operations, with Rainy River continuing to decrease its all-in sustaining costs, and New Afton achieving an all-in sustaining cost of negative $540 per ounce after considering the copper credits. Despite the slight missing goal production compared to our updated guidance, strong cost management and discipline allowed the company to beat the low end of its original 2024 Consolidated All-In Sustaining Cost Guidance. Our total capital expenditures for the quarter were approximately $75 million, $10 million spent on sustaining capital, and $65 million on gross capital. At Rain River, sustaining capital is primarily related to capitalized waste and tailing sales. Growth capital for the full year is related to the underground development as the underground main and intrepid zones continue to advance. Full year total capital is below the 2024 guidance range of $145 million to $165 million due to efficient capital management, savings related to the execution of the Rainy River tailings dam raise and lower capitalized waste stripping with approximately $5 million of growth capital deferred into 2025. At New Afton, sustaining capital is primarily related to continuation of the tailings management and stabilization activities. New Afton growth capital is primarily related to sea zone underground mine development and cave construction. Full year total capital is below the 2024 guidance range of $145 to $165 million, with approximately $15 million of capital deferred into 2025. I'll touch on operations starting with Rainy River on slide 7. Gold production in the fourth quarter was impacted by unexpected mechanical downtime on the crushing conveying system in December. Despite the lower gold production, the team did an excellent job to control costs. All-in sustaining costs were $1,327 per ounce for the fourth quarter, which resulted in the operation achieving the original full-year all-in sustaining cost guidance range. This is an impressive effort from the team and resulted in 90 million of free cash flow generated in 2024, while setting up the operation for a sustained period of free cash flow generation. Turning now to New Afton on slide 8. New Afton delivered another strong operating quarter with an increase of 19% gold production and 15% copper production over the third quarter. The B3K performed as planned, and C-zone ore production is ramping up following commercial production and cursor commissioning early in the fourth quarter. Boke production beat the top end of the original 2024 guidance range, with copper production achieving the midpoint. All in sustaining costs for the quarter and the year decreased substantially compared to the prior year period, driven by lower operating expenses, lower sustaining capital expense, and higher byproduct revenues. As a result, full-year all-in sustaining costs per gold ounce sold was well below the 2024 guidance range. The operation generated $24 million in free cash flow while completing the key infrastructure required to enter a period of sustained free cash flow going forward. Both operations exit 2024 well-positioned to generate significant free cash flow. I'll wrap up with our financial results on slide 10. Fourth quarter revenue was $262 million, which is a quarterly record. Q4 revenue was higher than the prior year quarter, primarily due to higher metal prices and higher copper sales, slightly offset by lower gold sales. Cash generated from operations before working capital adjustments was $126 million, or $0.16 per share for the quarter, higher than the prior year period, primarily due to higher revenue. Newgold generated quarterly free cash flow of $22 million due to higher revenue, partially offset by higher capital expenditures in the quarter as key growth project milestones were achieved. The company recorded net earnings of approximately $55 million, or $0.07 per share during Q4, and increased due to higher revenues. After adjusted for certain other charges, Net earnings were $59 million, or $0.07 per share in Q4, a significant increase compared to an adjusted net loss of $5 million in the fourth quarter of 2023. Our Q4 adjusted earnings include adjustments related to other gains and losses. 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. In the second half of 2024, we repaid the entirety of the $100 million drawn on the credit facility related to the Ontario Teachers Buyback Transaction with cash on hand and during a capital intensive period for both operations. This is made possible by the operational excellence and cost discipline both of our sites showed during the year. Sum up, we remain in a very healthy financial position.