New Gold Inc (NGD) Q1 2025 Earnings Call Highlights: Strong Cash Flow Amidst High Costs

In This Article:

  • Gold Production: 52,200 ounces.

  • Copper Production: 13.6 million pounds.

  • All-in Sustaining Cost (AISC): $1,727 per ounce of gold.

  • Cash Flow from Operations: Over $107 million.

  • Free Cash Flow: $25 million, with New Afton contributing $52 million.

  • Revenue: $209 million, higher than the prior year due to higher metal prices and copper sales.

  • Net Loss: Approximately $170 million or $0.02 per share.

  • Adjusted Net Earnings: $12 million or $0.02 per share.

  • Capital Expenditures: $75 million total, with $42 million on sustaining capital and $33 million on growth capital.

  • Cash on Hand: $213 million.

  • Liquidity Position: $590 million.

  • Senior Notes Offering: $400 million at 6.875% interest rate, due in 2032.

  • Revolving Credit Facility: Extended to 2029 with an accordion feature for up to $100 million increase.

Release Date: April 30, 2025

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

Positive Points

  • New Gold Inc (NGD) achieved a 40% improvement in safety with a low total recordable injury frequency rate of 0.55%.

  • The company produced over 52,000 ounces of gold and 13.6 million pounds of copper, slightly ahead of planned guidance.

  • New Gold Inc (NGD) generated over $107 million in cash flow from operations and $25 million in free cash flow.

  • The company successfully refinanced and extended its senior notes to 2032 and revolving credit facility to 2029 at lower rates, enhancing financial flexibility.

  • New Gold Inc (NGD) consolidated its interest in New Afton to 100%, providing full exposure to exploration upside and mine life extension possibilities.

Negative Points

  • Gold production decreased compared to Q1 2024 due to planned lower feed grades at both sites.

  • Consolidated all-in sustaining costs were high at $1,727 per ounce due to lower production in Q1.

  • Rainy River's all-in sustaining costs were $2,758 in the quarter, expected to trend lower but currently high.

  • The company recorded a net loss of approximately $170 million or $0.02 per share during Q1.

  • The transition from B3 cave to C-Zone at New Afton may result in lower grades and production in the short term.

Q & A Highlights

Q: With the recent consolidation of New Afton to 100% ownership, how does this affect your exploration strategy and timeline for the K-Zone and potential next block cave? A: Patrick Godin, President and CEO, stated that the consolidation does not change their objective to extend New Afton's mine life beyond 2040. They are aggressively pursuing exploration, aiming to define C-Zone integrated resources by year-end, with an exploration update expected by the end of Q3.