Company Enters Sustained Free Cash Flow Generation Period
New Gold Inc. (TSX: NGD) (NYSE American: NGD) reports second quarter results for the Company as of June 30, 2024. Second quarter 2024 production was 68,598 gold ounces and 13.6 million pounds of copper as planned, at an operating expense of $1,156 per gold ounce sold (co-product basis)3 and all-in sustaining costs1 of $1,381 per gold ounce sold (by-product basis). Delivering the second quarter as planned resulted in strong cash flow from operations of $100 million and free cash flow1 of $20 million. The Company was free cash flow positive through the first six months of the year and has now entered a sustained free cash flow generation period.
Operating to Plan Through First Half of the Year, Well Positioned for Increasing Production Profile in Second Half
“The second quarter saw New Gold deliver another quarter as planned,” stated Patrick Godin, President and CEO. “New Afton delivered a strong operating quarter with low all-in sustaining costs, while Rainy River made excellent progress preparing the open pit for the planned release of higher-grade ore in the second half of the year while maintaining operational discipline and delivering costs as planned. We exit the first half of the year operationally as planned, free cash flow positive, and are well positioned to deliver on our guidance targets for the year.”
Multiple Corporate Milestones Achieved in a Positive Free Cash Flow Quarter, the Company Has Entered a Sustained Free Cash Flow Generation Period
“During the quarter, we also successfully delivered an accretive transaction for our shareholders by increasing our free cash flow interest in New Afton to 80.1%,” added Mr. Godin. “As we’ve now entered a period of sustained free cash flow, this is further enhanced with our increased interest in a world-class copper-gold mine.”
Growth Projects Nearing Completion, to Add Significant Free Cash Flow Generation
“After a productive first half of 2024, our growth projects remain on track for completion by the end of the year. The second quarter saw numerous milestones at both the Rainy River underground Main project and the New Afton C-Zone block cave project that have positioned us for success. Rainy River remains on track to achieve first ore from the underground Main Zone by the end of this year, while New Afton expects to achieve commercial production at C-Zone in the second half of 2024. As we’ve now entered a period of free cash flow generation, bringing both of these projects online as planned will further build on that free cash flow generation as outlined in our three-year operational outlook,” added Mr. Godin.
Exploration Milestones Achieved in the Quarter, Sustainable Production Remains the Focus
“We made significant progress with our exploration efforts at both operations during the second quarter. After allocating additional funding to new opportunities at Rainy River earlier in the year, our exploration team advanced numerous high priority surface and underground targets. At New Afton, with the completion of the exploration drift in the quarter, the team has been able to advance priority near-mine targets. Our exploration strategic objective is to target a sustainable production platform of approximately 600,000 gold equivalent ounces per year with a line of sight until at least 2030. We are targeting releasing an additional exploration update to the market later in the third quarter,” stated Mr. Godin.
Consolidated Financial Highlights
Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | |
Revenue ($M) | 218.2 | 184.4 | 410.3 | 386.0 |
Operating expenses ($M) | 109.5 | 104.9 | 216.3 | 222.1 |
Net earnings (loss) ($M) | 53.1 | (2.6) | 9.6 | (34.4) |
Net earnings (loss), per share ($) | 0.07 | — | 0.01 | (0.05) |
Adj. net earnings ($M)1 | 17.0 | 11.6 | 30.1 | 30.0 |
Adj. net earnings, per share ($)1 | 0.02 | 0.02 | 0.04 | 0.04 |
Cash generated from operations ($M) | 100.4 | 56.4 | 155.2 | 117.0 |
Cash generated from operations, per share ($) | 0.14 | 0.08 | 0.22 | 0.17 |
Cash generated from operations, before changes in non-cash operating working capital ($M)1 | 90.4 | 65.2 | 163.0 | 140.9 |
Cash generated from operations, before changes in non-cash operating working capital, per share ($)1 | 0.12 | 0.10 | 0.23 | 0.21 |
Free cash flow ($M)1 | 20.4 | (26.1) | 5.6 | (38.7) |
Consolidated Operational Highlights
Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | |
Gold production (ounces)2 | 68,598 | 76,527 | 139,496 | 159,004 |
Gold sold (ounces)2 | 67,697 | 74,219 | 137,774 | 161,426 |
Copper production (Mlbs)2 | 13.6 | 12.0 | 26.9 | 22.3 |
Copper sold (MIbs)2 | 13.3 | 10.1 | 25.3 | 19.5 |
Gold revenue, per ounce ($)3 | 2,313 | 1,948 | 2,185 | 1,903 |
Copper revenue, per pound ($)3 | 4.26 | 3.61 | 3.97 | 3.70 |
Average realized gold price, per ounce ($)1 | 2,346 | 1,970 | 2,216 | 1,927 |
Average realized copper price, per pound ($)1 | 4.49 | 3.82 | 4.19 | 3.96 |
Operating expenses per gold ounce sold ($/ounce, co-product)3 | 1,156 | 1,063 | 1,131 | 1,029 |
Operating expenses per copper pound sold ($/ounce, co-product)3 | 2.35 | 2.57 | 2.39 | 2.86 |
Depreciation and depletion per gold ounce sold ($/ounce) | 1,066 | 732 | 980 | 680 |
Cash costs per gold ounce sold (by-product basis) ($/ounce)1 | 740 | 898 | 808 | 911 |
All-in sustaining costs per gold ounce sold (by-product basis) ($/ounce)1 | 1,381 | 1,582 | 1,389 | 1,460 |
Sustaining capital ($M)1 | 31.5 | 35.6 | 57.4 | 61.9 |
Growth capital ($M)1 | 40.8 | 36.0 | 75.9 | 72.8 |
Total capital ($M) | 72.3 | 71.6 | 133.3 | 134.7 |
Rainy River Mine
Operational Highlights
Rainy River Mine | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 |
Gold production (ounces)2 | 50,298 | 59,882 | 103,016 | 126,083 |
Gold sold (ounces)2 | 49,513 | 59,529 | 102,610 | 131,420 |
Gold revenue, per ounce ($)3 | 2,336 | 1,965 | 2,206 | 1,920 |
Average realized gold price, per ounce ($)1 | 2,336 | 1,965 | 2,206 | 1,920 |
Operating expenses per gold ounce sold ($/ounce)3 | 1,310 | 1,138 | 1,265 | 1,082 |
Depreciation and depletion per gold ounce sold ($/ounce) | 1,002 | 657 | 893 | 600 |
Cash costs per gold ounce sold (by-product basis) ($/ounce)1 | 1,231 | 1,090 | 1,197 | 1,040 |
All-in sustaining costs per gold ounce sold (by-product basis) ($/ounce)1 | 1,868 | 1,720 | 1,749 | 1,531 |
Sustaining capital ($M)1 | 29.4 | 31.6 | 51.6 | 53.9 |
Growth capital ($M)1 | 10.4 | 4.5 | 17.8 | 10.3 |
Total capital ($M) | 39.8 | 36.1 | 69.4 | 64.1 |
Operating Key Performance Indicators
Rainy River Mine | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 |
Open Pit Only | ||||
Tonnes mined per day (ore and waste) | 119,023 | 130,488 | 105,305 | 124,517 |
Ore tonnes mined per day | 17,679 | 34,146 | 17,078 | 35,257 |
Operating waste tonnes per day | 56,344 | 61,796 | 53,915 | 61,082 |
Capitalized waste tonnes per day | 44,999 | 34,545 | 34,313 | 28,178 |
Total waste tonnes per day | 101,344 | 96,342 | 88,228 | 89,260 |
Strip ratio (waste:ore) | 5.73 | 2.82 | 5.17 | 2.53 |
Underground Only | ||||
Ore tonnes mined per day | 553 | 1,001 | 715 | 884 |
Waste tonnes mined per day | 1,423 | 436 | 1,190 | 447 |
Lateral development (metres) | 1,307 | 846 | 2,258 | 1,722 |
Open Pit and Underground | ||||
Tonnes milled per calendar day | 26,068 | 23,252 | 25,545 | 22,828 |
Gold grade milled (g/t) | 0.74 | 0.97 | 0.78 | 1.04 |
Gold recovery (%) | 91 | 91 | 91 | 91 |
New Afton Mine
Operational Highlights
New Afton Mine | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 |
Gold production (ounces)2 | 18,300 | 16,645 | 36,479 | 32,921 |
Gold sold (ounces)2 | 18,184 | 14,690 | 35,164 | 30,006 |
Copper production (Mlbs)2 | 13.6 | 12.0 | 26.9 | 22.3 |
Copper sold (Mlbs)2 | 13.3 | 10.1 | 25.3 | 19.5 |
Gold revenue, per ounce ($)3 | 2,250 | 1,878 | 2,124 | 1,829 |
Copper revenue, per ounce ($)3 | 4.26 | 3.61 | 3.97 | 3.70 |
Average realized gold price, per ounce ($)1 | 2,372 | 1,988 | 2,244 | 1,957 |
Average realized copper price, per pound ($)1 | 4.49 | 3.82 | 4.19 | 3.96 |
Operating expenses ($/oz gold, co-product)3 | 736 | 757 | 738 | 799 |
Operating expenses ($/lb copper, co-product)3 | 2.35 | 2.57 | 2.39 | 2.86 |
Depreciation and depletion ($/ounce) | 1,231 | 1,032 | 1,224 | 1,022 |
Cash costs per gold ounce sold (by-product basis) ($/ounce)1 | (597) | 121 | (325) | 349 |
Cash costs per gold ounce sold ($/ounce,co-product)1 | 806 | 823 | 877 | 1,276 |
Cash costs per copper pound sold ($/pound, co-product)1 | 2.57 | 2.80 | 2.62 | 3.14 |
All-in sustaining costs per gold ounce sold (by-product basis) ($/ounce)1 | (433) | 447 | (107) | 664 |
All-in sustaining costs per gold ounce sold ($/ounce, co-product)1 | 856 | 920 | 874 | 972 |
All-in sustaining costs per copper pound sold ($/ounce, co-product)1 | 2.73 | 3.13 | 2.83 | 3.48 |
Sustaining capital ($M)1 | 2.0 | 4.1 | 5.8 | 8.1 |
Growth capital ($M)1 | 30.4 | 31.4 | 58.1 | 62.6 |
Total capital ($M) | 32.5 | 35.5 | 63.9 | 70.6 |
Operating Key Performance Indicators
New Afton Mine | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 |
New Afton Mine Only | ||||
Tonnes mined per day (ore and waste) | 10,223 | 10,165 | 10,479 | 9,678 |
Tonnes milled per calendar day | 11,093 | 8,307 | 10,623 | 8,161 |
Gold grade milled (g/t) | 0.62 | 0.72 | 0.65 | 0.70 |
Gold recovery (%) | 90 | 89 | 89 | 89 |
Copper grade milled (%) | 0.67 | 0.78 | 0.69 | 0.74 |
Copper recovery (%) | 91 | 91 | 90 | 91 |
Gold production (ounces) | 18,100 | 15,704 | 35,958 | 29,429 |
Copper production (Mlbs) | 13.6 | 12.0 | 26.9 | 22.3 |
Ore Purchase Agreements4 | ||||
Gold production (ounces) | 200 | 941 | 521 | 3,492 |
About New Gold
New Gold is a Canadian-focused intermediate mining Company with a portfolio of two core producing assets in Canada, the Rainy River gold mine and the New Afton copper-gold mine. The Company also holds Canadian-focused investments. New Gold’s vision is to build a leading diversified intermediate gold company based in Canada that is committed to the environment and social responsibility.
Endnotes
1. | “Cash costs per gold ounce sold”, “all-in sustaining costs per gold ounce sold”, “adjusted net earnings/(loss)”, “adjusted tax expense”, “sustaining capital and sustaining leases”, “growth capital”, “cash generated from operations before changes in non-cash operating working capital”, “free cash flow”, and “average realized gold/copper price per ounce/pound” are all non-GAAP financial performance measures that are used in this news release. These measures do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For more information about these measures, why they are used by the Company, and a reconciliation to the most directly comparable measure under IFRS, see the “Non-GAAP Financial Performance Measures” section of this news release. |
2. | Production is shown on a total contained basis while sales are shown on a net payable basis, including final product inventory and smelter payable adjustments, where applicable. |
3. | These are supplementary financial measures which are calculated as follows: “revenue per ounce and pound sold” is total revenue divided by total gold ounces sold and copper pounds sold, “Operating expenses per gold ounce sold” is total operating expenses divided by total gold ounces sold; “depreciation and depletion per gold ounce sold” is total depreciation and depletion divided by total gold ounces sold; and “operating expenses ($/oz gold, co-product)” and “operating expenses ($/lb copper, co-product)” is operating expenses apportioned to each metal produced on a percentage of activity basis, and subsequently divided by the total gold ounces, or pounds of copper sold, as the case may be, to arrive at per ounce or per pound figures. |
4. | Key performance indicator data is inclusive of ounces from ore purchase agreements for New Afton. The New Afton Mine purchases small amounts of ore from local operations, subject to certain grade and other criteria. During the quarter these ounces represented approximately 2% of total gold ounces produced using New Afton’s excess mill capacity. All other ounces are mined and produced at New Afton. |
Non-GAAP Financial Performance Measures
Cash Costs per Gold Ounce Sold
“Cash costs per gold ounce sold” is a common non-GAAP financial performance measure used in the gold mining industry but does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. New Gold reports cash costs on a sales basis and not on a production basis. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, this measure, along with sales, is a key indicator of the Company’s ability to generate operating earnings and cash flow from its mining operations. This measure allows investors to better evaluate corporate performance and the Company’s ability to generate liquidity through operating cash flow to fund future capital exploration and working capital needs.
This measure is intended to provide additional information only and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. This measure is not necessarily indicative of cash generated from operations under IFRS or operating costs presented under IFRS.
Cash cost figures are calculated in accordance with a standard developed by The Gold Institute, a worldwide association of suppliers of gold and gold products that ceased operations in 2002. Adoption of the standard is voluntary and the cost measures presented may not be comparable to other similarly titled measures of other companies. Cash costs include mine site operating costs such as mining, processing and administration costs, royalties, and production taxes, but are exclusive of amortization, reclamation, capital and exploration costs and net of by-product revenue. Cash costs are then divided by gold ounces sold to arrive at the cash costs per gold ounce sold.
The Company produces copper and silver as by-products of its gold production. The calculation of total cash costs per gold ounce for Rainy River is net of by-product silver sales revenue, and the calculation of total cash costs per gold ounce sold for New Afton is net of by-product copper sales revenue. New Gold notes that in connection with New Afton, the copper by-product revenue is sufficiently large to result in a negative total cash cost on a single mine basis. Notwithstanding this by-product contribution, as a Company focused on gold production, New Gold aims to assess the economic results of its operations in relation to gold, which is the primary driver of New Gold’s business. New Gold believes this metric is of interest to its investors, who invest in the Company primarily as a gold mining Company. To determine the relevant costs associated with gold only, New Gold believes it is appropriate to reflect all operating costs, as well as any revenue related to metals other than gold that are extracted in its operations.
To provide additional information to investors, New Gold has also calculated total cash costs on a co-product basis, which removes the impact of other metal sales that are produced as a by-product of gold production and apportions the cash costs to each metal produced on a percentage of revenue basis, and subsequently divides the amount by the total gold ounces, silver ounces or pounds of copper sold, as the case may be, to arrive at per ounce or per pound figures. Unless indicated otherwise, all total cash cost information is net of by-product sales.
Sustaining Capital and Sustaining Leases
“Sustaining capital” and “sustaining lease” are non-GAAP financial performance measures that do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. New Gold defines “sustaining capital” as net capital expenditures that are intended to maintain operation of its gold producing assets. Similarly, a “sustaining lease” is a lease payment that is sustaining in nature. To determine “sustaining capital” expenditures, New Gold uses cash flow related to mining interests from its unaudited condensed interim consolidated statement of cash flows and deducts any expenditures that are capital expenditures to develop new operations or capital expenditures related to major projects at existing operations where these projects will materially increase production. Management uses “sustaining capital” and “sustaining lease” to understand the aggregate net result of the drivers of all-in sustaining costs other than cash costs. These measures are intended to provide additional information only and should not be considered in isolation or as substitutes for measures of performance prepared in accordance with IFRS.
Growth Capital
“Growth capital” is a non-GAAP financial performance measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. New Gold considers non-sustaining capital costs to be “growth capital”, which are capital expenditures to develop new operations or capital expenditures related to major projects at existing operations where these projects will materially increase production. To determine “growth capital” expenditures, New Gold uses cash flow related to mining interests from its unaudited condensed interim consolidated statement of cash flows and deducts any expenditures that are capital expenditures that are intended to maintain operation of its gold producing assets. Management uses “growth capital” to understand the cost to develop new operations or related to major projects at existing operations where these projects will materially increase production. This measure is intended to provide additional information only and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
All-In Sustaining Costs per Gold Ounce Sold
“All-in sustaining costs per gold ounce sold” is a non-GAAP financial performance measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. New Gold calculates “all-in sustaining costs per gold ounce sold” based on guidance announced by the World Gold Council in September 2013. The WGC is a non-profit association of the world’s leading gold mining companies established in 1987 to promote the use of gold to industry, consumers and investors. The WGC is not a regulatory body and does not have the authority to develop accounting standards or disclosure requirements. The WGC has worked with its member companies to develop a measure that expands on IFRS measures to provide visibility into the economics of a gold mining company. Current IFRS measures used in the gold industry, such as operating expenses, do not capture all of the expenditures incurred to discover, develop and sustain gold production. New Gold believes that “all-in sustaining costs per gold ounce sold” provides further transparency into costs associated with producing gold and will assist analysts, investors, and other stakeholders of the Company in assessing its operating performance, its ability to generate free cash flow from current operations and its overall value. In addition, the Human Resources and Compensation Committee of the Board of Directors uses “all-in sustaining costs”, together with other measures, in its Company scorecard to set incentive compensation goals and assess performance.
“All-in sustaining costs per gold ounce sold” is intended to provide additional information only and does not have any standardized meaning under IFRS and may not be comparable to similar measures presented by other mining companies. It should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The measure is not necessarily indicative of cash flow from operations under IFRS or operating costs presented under IFRS.
New Gold defines all-in sustaining costs per gold ounce sold as the sum of cash costs, net capital expenditures that are sustaining in nature, corporate general and administrative costs, sustaining leases, capitalized and expensed exploration costs that are sustaining in nature, and environmental reclamation costs, all divided by the total gold ounces sold to arrive at a per ounce figure. To determine sustaining capital expenditures, New Gold uses cash flow related to mining interests from its unaudited condensed interim consolidated statement of cash flows and deducts any expenditures that are non-sustaining (growth). Capital expenditures to develop new operations or capital expenditures related to major projects at existing operations where these projects will materially benefit the operation are classified as growth and are excluded. The definition of sustaining versus non-sustaining is similarly applied to capitalized and expensed exploration costs. Exploration costs to develop new operations or that relate to major projects at existing operations where these projects are expected to materially benefit the operation are classified as non-sustaining and are excluded.
Costs excluded from all-in sustaining costs per gold ounce sold are non-sustaining capital expenditures, non-sustaining lease payments and exploration costs, financing costs, tax expense, and transaction costs associated with mergers, acquisitions and divestitures, and any items that are deducted for the purposes of adjusted earnings.
To provide additional information to investors, the Company has also calculated all-in sustaining costs per gold ounce sold on a co-product basis for New Afton, which removes the impact of other metal sales that are produced as a by-product of gold production and apportions the all-in sustaining costs to each metal produced on a percentage of revenue basis, and subsequently divides the amount by the total gold ounces, or pounds of copper sold, as the case may be, to arrive at per ounce or per pound figures. By including cash costs as a component of all-in sustaining costs, the measure deducts by-product revenue from gross cash costs.
The following tables reconcile the above non-GAAP measures to the most directly comparable IFRS measure on an aggregate basis.
Cash Costs and All-in Sustaining Costs per Gold Ounce Reconciliation Tables
Three months ended June 30 | Six months ended June 30 | |||
(in millions of U.S. dollars, except where noted) | 2024 | 2023 | 2024 | 2023 |
CONSOLIDATED CASH COST AND AISC RECONCILIATION | ||||
Operating expenses | 109.5 | 104.9 | 216.3 | 222.1 |
Treatment and refining charges on concentrate sales | 5.4 | 3.8 | 10.1 | 9.0 |
By-product silver revenue | (5.0) | (3.5) | (8.8) | (6.7) |
By-product copper revenue | (59.7) | (38.5) | (106.2) | (77.3) |
Total cash cost1 | 50.1 | 66.7 | 111.3 | 147.1 |
Gold ounces sold2 | 67,697 | 74,219 | 137,774 | 161,426 |
Cash costs per gold ounce sold (by-product basis)1 | 740 | 898 | 808 | 911 |
Sustaining capital expenditures1 | 31.5 | 35.6 | 57.4 | 61.9 |
Sustaining exploration – expensed | 0.1 | 0.2 | 0.2 | 0.4 |
Sustaining leases1 | 0.5 | 3.8 | 1.8 | 6.3 |
Corporate G&A including share-based compensation | 8.7 | 8.1 | 15.2 | 13.9 |
Reclamation expenses | 2.7 | 2.9 | 5.4 | 6.2 |
Total all-in sustaining costs1 | 93.5 | 117.4 | 191.3 | 235.7 |
Gold ounces sold2 | 67,697 | 74,219 | 137,774 | 161,426 |
All-in sustaining costs per gold ounce sold (by-product basis)1 | 1,381 | 1,582 | 1,389 | 1,460 |
Three months ended June 30 | Six months ended June 30 | |||
(in millions of U.S. dollars, except where noted) | 2024 | 2023 | 2024 | 2023 |
RAINY RIVER CASH COSTS AND AISC RECONCILIATION | ||||
Operating expenses | 64.9 | 67.8 | 129.8 | 142.2 |
By-product silver revenue | (3.9) | (2.9) | (7.0) | (5.6) |
Total cash costs net of by-product revenue | 60.9 | 64.9 | 122.8 | 136.6 |
Gold ounces sold2 | 49,513 | 59,529 | 102,610 | 131,420 |
Cash costs per gold ounce sold (by-product basis)1 | 1,231 | 1,090 | 1,197 | 1,040 |
Sustaining capital expenditures1 | 29.4 | 31.6 | 51.6 | 53.9 |
Sustaining leases1 | 0.1 | 3.6 | 1.0 | 5.9 |
Reclamation expenses | 2.0 | 2.3 | 4.0 | 4.9 |
Total all-in sustaining costs1 | 92.5 | 102.4 | 179.5 | 201.3 |
Gold ounces sold2 | 49,513 | 59,529 | 102,610 | 131,420 |
All-in sustaining costs per gold ounce sold (by-product basis)1 | 1,868 | 1,720 | 1,749 | 1,531 |
Three months ended June 30 | Six months ended June 30 | |||
(in millions of U.S. dollars, except where noted) | 2024 | 2023 | 2024 | 2023 |
NEW AFTON CASH COSTS AND AISC RECONCILIATION | ||||
Operating expenses | 44.6 | 37.1 | 86.5 | 79.9 |
Treatment and refining charges on concentrate sales | 5.4 | 3.8 | 10.1 | 9.0 |
By-product silver revenue | (1.1) | (0.6) | (1.8) | (1.1) |
By-product copper revenue | (59.7) | (38.5) | (106.2) | (77.3) |
Total cash costs net of by-product revenue | (10.9) | 1.8 | (11.4) | 10.5 |
Gold ounces sold2 | 18,184 | 14,690 | 35,164 | 30,006 |
Cash costs per gold ounce sold (by-product basis)1 | (597) | 121 | (325) | 349 |
Sustaining capital expenditures1 | 2.0 | 4.1 | 5.8 | 8.1 |
Sustaining leases1 | 0.3 | — | 0.5 | 0.1 |
Reclamation expenses | 0.7 | 0.6 | 1.4 | 1.3 |
Total all-in sustaining costs1 | (7.9) | 6.6 | (3.8) | 19.9 |
Gold ounces sold2 | 18,184 | 14,690 | 35,164 | 30,006 |
All-in sustaining costs per gold ounce sold (by-product basis)1 | (433) | 447 | (107) | 664 |
Three months ended June 30, 2024 | |||
(in millions of U.S. dollars, except where noted) | Gold | Copper | Total |
NEW AFTON CASH COST AND AISC RECONCILIATION (ON A CO-PRODUCT BASIS) | |||
Operating expenses | 13.4 | 31.2 | 44.6 |
Units of metal sold | 18,184 | 13.3 | |
Operating expenses ($/oz gold or lb copper sold, co-product)3 | 736 | 2.35 | |
Treatment and refining charges on concentrate sales | 1.6 | 3.7 | 5.4 |
By-product silver revenue | (0.3) | (0.8) | (1.1) |
Cash costs (co-product)3 | 14.7 | 34.2 | 48.9 |
Cash costs per gold ounce sold or lb copper sold (co-product)3 | 806 | 2.57 | |
Sustaining capital expendituresI | 0.6 | 1.4 | 2.0 |
Sustaining leases | 0.1 | 0.2 | 0.3 |
Reclamation expenses | 0.2 | 0.5 | 0.7 |
All-in sustaining costs (co-product)2 | 15.6 | 36.3 | 51.9 |
All-in sustaining costs per gold ounce sold or lb copper sold (co-product)2 | 856 | 2.73 | |
I Apportioned to each metal produced on a percentage of activity basis. For the above reconciliation table, 30% of operating costs were attributed to gold production and 70% of operating costs were attributed to copper production. |
Three months ended June 30, 2023 | |||
(in millions of U.S. dollars, except where noted) | Gold | Copper | Total |
NEW AFTON CASH COST AND AISC RECONCILIATION (ON A CO-PRODUCT BASIS) | |||
Operating expenses | 11.1 | 26.0 | 37.1 |
Units of metal sold | 14,690 | 10.1 | |
Operating expenses ($/oz gold or lb copper sold, co-product)3 | 757 | 2.57 | |
Treatment and refining charges on concentrate sales | 1.1 | 2.7 | 3.8 |
By-product silver revenue | (0.2) | (0.4) | (0.6) |
Cash costs (co-product)3 | 12.1 | 28.2 | 40.3 |
Cash costs per gold ounce sold or lb copper sold (co-product)3 | 823 | 2.80 | |
Sustaining capital expendituresI | 1.2 | 2.9 | 4.1 |
Reclamation expenses | 0.2 | 0.4 | 0.6 |
All-in sustaining costs (co-product)2 | 13.5 | 31.5 | 45.1 |
All-in sustaining costs per gold ounce sold or lb copper sold (co-product)2 | 920 | 3.13 | |
I Apportioned to each metal produced on a percentage of activity basis. For the above reconciliation table, 30% of operating costs were attributed to gold production and 70% of operating costs were attributed to copper production.
|
Six months ended June 30, 2024 | |||
(in millions of U.S. dollars, except where noted) | Gold | Copper | Total |
NEW AFTON CASH COST AND AISC RECONCILIATION (ON A CO-PRODUCT BASIS) | |||
Operating expenses | 26.0 | 60.6 | 86.5 |
Units of metal sold | 35,164 | 25.3 | |
Operating expenses ($/oz gold or lb copper sold, co-product)3 | 738 | 2.39 | |
Treatment and refining charges on concentrate sales | 3.0 | 7.0 | 10.0 |
By-product silver revenue | (0.5) | (1.3) | (1.8) |
Cash costs (co-product)3 | 28.4 | 66.3 | 94.7 |
Cash costs per gold ounce sold or lb copper sold (co-product)3 | 809 | 2.62 | |
Sustaining capital expendituresI | 1.7 | 4.0 | 5.7 |
Sustaining leases | 0.2 | 0.4 | 0.6 |
Reclamation expenses | 0.4 | 1.0 | 1.4 |
All-in sustaining costs (co-product)2 | 30.7 | 71.7 | 102.4 |
All-in sustaining costs per gold ounce sold or lb copper sold (co-product)2 | 874 | 2.83 | |
I Apportioned to each metal produced on a percentage of activity basis. For the above reconciliation table, 30% of operating costs were attributed to gold production and 70% of operating costs were attributed to copper production. |
Six months ended June 30, 2023 | |||
(in millions of U.S. dollars, except where noted) | Gold | Copper | Total |
NEW AFTON CASH COST AND AISC RECONCILIATION (ON A CO-PRODUCT BASIS) | |||
Operating expenses | 24.0 | 55.9 | 79.9 |
Units of metal sold | 30,006 | 19.5 | |
Operating expenses ($/oz gold or lb copper sold, co-product)3 | 799 | 2.86 | |
Treatment and refining charges on concentrate sales | 2.7 | 6.3 | 9.0 |
By-product silver revenue | (0.3) | (0.8) | (1.1) |
Cash costs (co-product)3 | 26.3 | 61.4 | 87.8 |
Cash costs per gold ounce sold or lb copper sold (co-product)3 | 877 | 3.14 | |
Sustaining capital expendituresI | 2.4 | 5.7 | 8.1 |
Reclamation expenses | 0.4 | 0.9 | 1.3 |
All-in sustaining costs (co-product)2 | 29.2 | 68.0 | 97.2 |
All-in sustaining costs per gold ounce sold or lb copper sold (co-product)2 | 972 | 3.48 | |
I Apportioned to each metal produced on a percentage of activity basis. For the above reconciliation table, 30% of operating costs were attributed to gold production and 70% of operating costs were attributed to copper production. |
Sustaining Capital Expenditures Reconciliation Table
Three months ended June 30 | Six months ended June 30 | |||
(in millions of U.S. dollars, except where noted) | 2024 | 2023 | 2024 | 2023 |
TOTAL SUSTAINING CAPITAL EXPENDITURES | ||||
Mining interests per consolidated statement of cash flows | 72.3 | 71.6 | 133.3 | 134.7 |
New Afton growth capital expenditures2 | (30.4) | (31.4) | (58.1) | (62.6) |
Rainy River growth capital expenditures2 | (10.4) | (4.5) | (17.8) | (10.3) |
Sustaining capital expenditures2 | 31.5 | 35.6 | 57.4 | 61.9 |
Adjusted Net Earnings/(Loss) and Adjusted Net Earnings per Share
“Adjusted net earnings” and “adjusted net earnings per share” are non-GAAP financial performance measures that do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. “Adjusted net earnings” and “adjusted net earnings per share” exclude “other gains and losses” as per Note 3 of the Company’s unaudited condensed interim consolidated financial statements; and loss on redemption of long-term debt. Net earnings have been adjusted, including the associated tax impact, for the group of costs in “Other gains and losses” on the unaudited condensed interim consolidated income statements. Key entries in this grouping are: fair value changes for the Rainy River gold stream obligation, fair value changes and gain on the disposal of the New Afton free cash flow interest obligation, foreign exchange gains/loss and fair value changes in investments. The income tax adjustments reflect the tax impact of the above adjustments and is referred to as “adjusted tax expense”.
The Company uses “adjusted net earnings” for its own internal purposes. Management’s internal budgets and forecasts and public guidance do not reflect the items which have been excluded from the determination of “adjusted net earnings”. Consequently, the presentation of “adjusted net earnings” enables investors to better understand the underlying operating performance of the Company’s core mining business through the eyes of management. Management periodically evaluates the components of “adjusted net earnings” based on an internal assessment of performance measures that are useful for evaluating the operating performance of New Gold’s business and a review of the non-GAAP financial performance measures used by mining industry analysts and other mining companies. “Adjusted net earnings” and “adjusted net earnings per share” are intended to provide additional information only and should not be considered in isolation or as substitutes for measures of performance prepared in accordance with IFRS. These measures are not necessarily indicative of operating profit or cash flows from operations as determined under IFRS. The following table reconciles these non-GAAP financial performance measures to the most directly comparable IFRS measure.
Three months ended June 30 | Six months ended June 30 | |||
(in millions of U.S. dollars, except where noted) | 2024 | 2023 | 2024 | 2023 |
ADJUSTED NET EARNINGS (LOSS) RECONCILIATION | ||||
Income (loss) before taxes | 23.0 | (1.8) | (17.5) | (33.3) |
Other losses | 0.5 | 14.3 | 55.6 | 64.3 |
Adjusted net earnings before taxes | 23.5 | 12.5 | 38.1 | 31.0 |
Income tax recovery (expense) | 30.1 | (0.8) | 27.1 | (1.1) |
Income tax adjustments | (36.6) | (0.1) | (35.1) | 0.1 |
Adjusted income tax expense2 | (6.5) | (0.9) | (8.0) | (1.0) |
Adjusted net earnings2 | 17.0 | 11.6 | 30.1 | 30.0 |
Adjusted net earnings per share (basic and diluted)2 | 0.02 | 0.02 | 0.04 | 0.04 |
Cash Generated from Operations, before Changes in Non-Cash Operating Working Capital
“Cash generated from operations, before changes in non-cash operating working capital” is a non-GAAP financial performance measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. Other companies may calculate this measure differently and this measure is unlikely to be comparable to similar measures presented by other companies. “Cash generated from operations, before changes in non-cash operating working capital” excludes changes in non-cash operating working capital. New Gold believes this non-GAAP financial measure provides further transparency and assists analysts, investors and other stakeholders of the Company in assessing the Company’s ability to generate cash from its operations before temporary working capital changes.
Cash generated from operations, before non-cash changes in working capital is intended to provide additional information only and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. This measure is not necessarily indicative of operating profit or cash flows from operations as determined under IFRS. The following table reconciles this non-GAAP financial performance measure to the most directly comparable IFRS measure.
Three months ended June 30 | Six months ended June 30 | |||
(in millions of U.S. dollars) | 2024 | 2023 | 2024 | 2023 |
CASH RECONCILIATION | ||||
Cash generated from operations | 100.4 | 56.4 | 155.2 | 117.0 |
Change in non-cash operating working capital | (10.0) | 8.8 | 7.8 | 23.9 |
Cash generated from operations, before changes in non-cash operating working capital2 | 90.4 | 65.2 | 163.0 | 140.9 |
Free Cash Flow
“Free cash flow” is a non-GAAP financial performance measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. New Gold defines “free cash flow” as cash generated from operations and proceeds of sale of other assets less capital expenditures on mining interests, lease payments, and settlement of non-current derivative financial liabilities which include the Rainy River gold stream obligation and the New Afton free cash flow interest obligation. New Gold believes this non-GAAP financial performance measure provides further transparency and assists analysts, investors and other stakeholders of the Company in assessing the Company’s ability to generate cash flow from current operations. “Free cash flow” is intended to provide additional information only and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. This measure is not necessarily indicative of operating profit or cash flows from operations as determined under IFRS. The following tables reconcile this non-GAAP financial performance measure to the most directly comparable IFRS measure on an aggregate and mine-by-mine basis.
Three months ended June 30, 2024 | ||||
(in millions of U.S. dollars) | Rainy River | New Afton | Other | Total |
FREE CASH FLOW RECONCILIATION | ||||
Cash generated from operations | 59.2 | 47.5 | (6.3) | 100.4 |
Less Mining interest capital expenditures | (39.7) | (32.5) | — | (72.2) |
Add Proceeds of sale from other assets | — | 0.2 | — | 0.2 |
Less Lease payments | (0.1) | (0.3) | (0.1) | (0.5) |
Less Cash settlement of non-current derivative financial liabilities | (7.5) | — | — | (7.5) |
Free Cash Flow1 | 11.9 | 14.9 | (6.4) | 20.4 |
Three months ended June 30, 2023 | ||||
(in millions of U.S. dollars) | Rainy River | New Afton | Other | Total |
FREE CASH FLOW RECONCILIATION | ||||
Cash generated from operations | 48.6 | 16.5 | (8.8) | 56.3 |
Less Mining interest capital expenditures | (36.1) | (35.5) | — | (71.6) |
Add Proceeds of sale from other assets | 0.1 | — | — | 0.1 |
Less Lease payments | (3.6) | (0.1) | (0.1) | (3.9) |
Less Cash settlement of non-current derivative financial liabilities | (7.0) | — | — | (7.0) |
Free Cash Flow1 | 2.0 | (19.1) | (8.9) | (26.1) |
Six months ended June 30, 2024 | ||||
(in millions of U.S. dollars) | Rainy River | New Afton | Other | Total |
FREE CASH FLOW RECONCILIATION | ||||
Cash generated from operations | 94.4 | 75.7 | (14.9) | 155.2 |
Less Mining interest capital expenditures | (69.4) | (63.9) | — | (133.3) |
Add Proceeds of sale from other assets | — | 0.2 | — | 0.2 |
Less Lease payments | (1.0) | (0.5) | (0.3) | (1.8) |
Less Cash settlement of non-current derivative financial liabilities | (14.7) | — | — | (14.7) |
Free Cash Flow1 | 9.3 | 11.5 | (15.2) | 5.6 |
Six months ended June 30, 2023 | ||||
(in millions of U.S. dollars) | Rainy River | New Afton | Other | Total |
FREE CASH FLOW RECONCILIATION | ||||
Cash generated from operations | 101.3 | 32.5 | (16.8) | 117.0 |
Less Mining interest capital expenditures | (64.1) | (70.6) | — | (134.7) |
Add Proceeds of sale from other assets | 0.1 | — | — | 0.1 |
Less Lease payments | (5.9) | (0.10) | (0.3) | (6.3) |
Less Cash settlement of non-current derivative financial liabilities | (14.8) | — | — | (14.8) |
Free Cash Flow1 | 16.6 | (38.2) | (17.1) | (38.7) |
Average Realized Price
“Average realized price per gold ounce or per copper pound sold” is a non-GAAP financial performance measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. Other companies may calculate this measure differently and this measure is unlikely to be comparable to similar measures presented by other companies. Management uses this measure to better understand the price realized for gold sales in each reporting period. “Average realized price per ounce of gold sold or copper pound sold” is intended to provide additional information only and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The following tables reconcile this non-GAAP financial performance measure to the most directly comparable IFRS measure on an aggregate and mine-by-mine basis.
Three months ended June 30 | Six months ended June 30 | |||
(in millions of U.S. dollars, except where noted) | 2024 | 2023 | 2024 | 2023 |
TOTAL AVERAGE REALIZED PRICE | ||||
Revenue from gold sales | 156.6 | 144.6 | 301.0 | 307.2 |
Treatment and refining charges on gold concentrate sales | 2.2 | 1.6 | 4.2 | 3.9 |
Gross revenue from gold sales | 158.8 | 146.2 | 305.2 | 311.0 |
Gold ounces sold | 67,697 | 74,219 | 137,774 | 161,425 |
Total average realized price per gold ounce sold ($/ounce)1 | 2,346 | 1,970 | 2,216 | 1,927 |
Three months ended June 30 | Six months ended June 30 | |||
(in millions of U.S. dollars, except where noted) | 2024 | 2023 | 2024 | 2023 |
RAINY RIVER AVERAGE REALIZED PRICE | ||||
Revenue from gold sales | 115.7 | 117.0 | 226.4 | 252.3 |
Gold ounces sold | 49,513 | 59,529 | 102,610 | 131,420 |
Rainy River average realized price per gold ounce sold ($/ounce)1 | 2,336 | 1,965 | 2,206 | 1,920 |
Three months ended June 30 | Six months ended June 30 | |||
(in millions of U.S. dollars, except where noted) | 2024 | 2023 | 2024 | 2023 |
NEW AFTON AVERAGE REALIZED PRICE | ||||
Revenue from gold sales | 40.9 | 27.6 | 74.7 | 54.9 |
Treatment and refining charges on gold concentrate sales | 2.2 | 1.6 | 4.2 | 3.9 |
Gross revenue from gold sales | 43.1 | 29.2 | 78.9 | 58.7 |
Gold ounces sold | 18,184 | 14,690 | 35,164 | 30,006 |
New Afton average realized price per gold ounce sold ($/ounce)1 | 2,372 | 1,988 | 2,244 | 1,957 |
For additional information with respect to the non-GAAP measures used by the Company, refer to the detailed “Non-GAAP Financial Performance Measure” section disclosure in the MD&A for the three and six months ended June 30, 2024 filed on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov.
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