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New Gold Inc.

View Company Profile

September 17, 2024 at 1:20 PM (MDT)|Broadmoor Hotel & Resort

Patrick Godin

President and CEO

Mr. Godin has over 30 years of corporate, technical and operations experience in the mining industry. Most recently, Mr. Godin was Vice President and Chief Operating Officer of Pretium Resources Inc. and was responsible for the operations of the Brucejack Mine. Prior to that, Mr. Godin was the President and Chief Executive Officer of Stornoway Diamond Corporation, and from 2010 to 2018 he was the Chief Operating Officer and Vice President. During this time, he was responsible for the construction and operations of the Renard Diamond Mine in Quebec. Prior to that, he served as the Vice President, Project Development for G Mining Services and held executive or senior operations positions for Canadian Royalties, Iamgold and Cambior in the Americas. Mr. Godin holds a Bachelor of Engineering degree in Mining from Laval University in Quebec, Canada and is a Chartered Director since 2010.

This is an automatically generated transcript. Denver Gold Group cannot accept responsibility for mistakes, errors, omissions, or any action taken in reliance thereon. Use of this transcript is governed by Denver Gold Group’s Terms of Use.

Drink. Yeah, good afternoon. So gonna start about our investment proposition at New Gold think is first we have two assets in Canada that will describe further. And we have we worked really hard in the last two years to be recognized as a money of choice. So we deliver back to back our last eight quarters and we're trending now if as if we assume that covers the back pro by product to guidance between 310 or 3 50,000 answers this year in the next three years, our goal production will increase by 25% in the next three years. Our copper production will increase by 60%. So two assets in Canada. One is the Rainy River. Rainy River is at in Ontario, at the border of Minnesota and Manitoba. It's actually close to Fort Francis, Ontario. So we have we, we plan to produce this year between 353 80,000 ounces of gold. We expect also to increase our gold production as I will explain that later. So we are actually having a, a meal that is having an average meal feed cap per rate of 24,000 tons per day. 1000 tons per day is coming from and pit with a small underground mine that is at the perfect of the property and the balance is coming from the open pit new and we are currently developing the underground main zone that will give provide to us 5500 tons per day. We have an average rate diluted of 2.7 g per ton. New A is localized in lower land BC in the city of Kamloops. It's a black cave. We have 70% of production is coming from copper, 30% from gold and the guidance this year is between 60 to 70,000 ounces of gold and between 50 to 60 million pound of copper. We are actually extracting ore from the B tree cave. We is the third cave and we are completing the investment in the sea. We will provide to us production up to the end of 2031. If we assume that we will add one year this year in reserves. Oops. So what is our objectives? So currently we provide guidance for the next three years for the first time in February. So you can see that we will what is in gold color is gold and in orange and copper. So we'll increase our gold equivalent production to close to 60,000 ounces, 60 100,000 ounces at the end for 2026. After that, we want to preserve our platform going forward and we want to, we, we're investing and we'll cover that in exploration to keep the gold production equivalent at this level. We have opportunity at Rainy River. In term of the open pit extension, we have opportunity to increase our reserves with the ODM and to extend my life on the underground mine. And that new, personally discuss about the sea zone extension, East Extension, the zone, the new key zone area that we recently discovered a wall zone that is not on the slide that we also discovered this year and the Artificial Intelligence Southeast that we just initiate drilling in it. So if you look to the first half of this year, we were pretty 40% 1st half, 60% 2nd half of the year in terms of production. So basically in Q in first half of the year, we deliver our guidance. What is nice is our inflection point in terms to be corporate cash free cash flow was the second half of 2024. And because they first, because we remanage with with discipline, our operational cost combined with the price that was favorable for us in copper. First half of the year, the copper price was above our budget expectation and also with gold. So on the corporate engineer, it was generate free cash flow all in for the for since a while. So it was a really important milestone for us at Renie river. OK. We are currently the main project that we have actually is to develop the underground mine. So we we, we are doing really well. So we are the main objective that we have this year is the position us to increase the development capacity means that to have our two egress and our ventilation completed. So the event race was is a race war. It was completed in August. Actually, we are working on the civil mechanical electrical infrastructures around the fans that will be in place for the first half of 2025. We also worked intensively to build the portal, one of the portal that is breaking through in the pit. So we had the, we did all the wrong support on the external phase of the of the of the slopes and you can see the first cut of the portal that is ongoing. At the end of at the beginning of 2025 we expect to complete our what ventilation loops? It is two egress plus of entries. So it's gonna be well positioned to accelerate the development of ODM. And also we will have first order from development in ODM in ODM. At the end of this year, our main focus this year so ordered and to still invest time and effort in operation and in operation excellence. It was to create value with explorations at R river. We mainly did not invest in exploration since the mine was started, the main objective was to make it work. And in the recent years, we invest a lot of time and effort in all the aspect of our business to achieve that, including involvement, safety. But we had a lot of information that were not followed since the beginning. And we start to work where it will create value in the short term is close to our infrastructures. So our exploration campaign was we, we we look at two objectives, extend the open bit of my life. And secondly, to extend the resource in the area where we plan to do development to reduce the Capex and increase the return of our investment on the ground. So what you can see here on the screen, what is in yellow is the reserve, the pit shell of the reserves and the open pit mine reserve that we have will bring us to the end of 2026. After that, we have two years of low grade stockpile to process that will bring us to 2028. After that, we have just the underground mine that will feed the mill at 5500 tons per day. That was our plan on January 1st, we deployed time and effort a t year end 2023 and at the beginning of the year and we add what we call phase five. Phase five is adding to us 60 months of open pit feed at a higher quality grade and it will push. So it means that the open pit will feed the mill at 24,000 tons per league combination with the underground up to I would say the second half of 2028 our recent exploration drilling was to drill the Northwest Trend targets the ODM East, the two ET and the North target. We have results from three of them and we released that last Friday. We were successful in the Northwest trend and we were successful in two a target zone. We are actually completing the resource envelope in the modeling and we will start to do with on that again. It's a mine where the Capex is all behind us in terms of equipment, infrastructures, working capital and our people are the open pit. Workers are mainly locals and they are strongly motivated to extend the mine life of the asset. So it's an opportunity to create value for shoulders and we are extremely aggressive on this. Actually, we will be aggressive also in a function of the current goal price and the possibility to do additional push back to the pit, not to, to to recover gold that is already scheduled in the underground online plan, but to add answers that we are living in the wall. So that's extremely positive for us. Because for the first time at Rainy River, we have opportunity to shape our future and to maintain an average of 3275 to 300,000 ounces of gold going forward up to 2030. So still having work to do, but it's repros and we're really optimist here. You have a view of the underground exploration result that we release. What is nice is we extend a bit of the resource in Intrepid on the east side of the, of the, of the lens. We also when we develop the underground mine decide to start the ramp from Intrepid instead to start out from the pit. Basically because it was providing to us to egress. It was a cost saving instrument to not have a man we in the race, but also it was giving to us the opportunity to have a platform to drill an area that we never drilled, that is called the gap area. And we had a real nice intersection with few holes that we did and we're pretty pleased and we will follow up on that. We also confirmed that we have six lenses in ODM. I'm talking under the pit. One of them in the 17 East we drilled where I said to you before, we have, we plan to have infrastructures to increase our return. And we were really successful in our intersection and it's the same for the on the ODM main, really positive for us. So at the point that at the beginning of the year we had project and we will invest 5 million in that. And this year we have, we'll plan to invest $12 million us in exploration at 20 we will plan to be way more aggressive next year too in new. Often it's things are going over expectation over and above expectation in terms of project execution in the season. So the stabilization of the tidings is is really well in advance, we are really well positioned. And the main project that we have this year is to commission the gator crusher and the conveyor system. It will be, we already add conveyor system in place to support the upper caves. So we extend the infrastructures and we'll have 8.2 kilometers to go to surface the conveyor and crusher system. It was scheduled to be commissioned at the end of this year and we are a few weeks in advance, hope that we'll be able to announce positive things A T the beginning of Q four. It's really good for us. It will not have a direct, direct impact on our production. It will have a direct impact on our costs because it will eliminate the tracking of the, of the undercut and the ore that we generate in season. Actually that we have to track to B three. It will reduce also the manpower, it will reduce also the E generation on the ground. So it will be really efficient for us. We manage the risk too. So it's a copy paste of the infrastructure that is at the opera level. So basically it will not. We're not reinventing the wheel and the readiness is pretty quick. New Hampton is having some advantage that are wonderful for us. It's a mine that is localized in Lowland Bay. C So when I'm at New H at the, I'm at the hotel, if I respect the speed limit, it's exactly nine minutes to go to the mine. So it's, the quality of life is totally different forward drives to Vancouver 30 minute flight and when you're not working, you have wonderful landscaping Riso to doki, you can go to Wester. It's a wonderful place to live and a big majority of our employees are having more than 10 years of seniority and we have a, a people nursery, a talent nursery at Newton that we really care for. We are also connected to the grid and the energy that is provided by BC Rose. Green energy. We, the technical success of New Hampton is also the fact that we have ticket dealings that we are the dealings at the exit of the mill is are at 20% solid. We in, we increase that to 65. We are in binders and we depo and, and, and we dispose that in the a pit. So would that mean that we have mostly no Capex for the construction of tailings going forward? And when season will be mined out, we will still have room for 30 million tons in the Afton pit. So if we look at the asset for the people, for the quality and the infrastructures we localize and with the strong social accept that we have, we really want to be there for a long time. So actually we have in the resource portfolio or in addition to sea zone that will bring us to 2031 we have his extension that is low tonnage, high grade. And we also complete the definition of the D zone is under the community of sea zone. We want to do more than that. If we want to be on the long term, we want to be aggressive on exploration. We want to improve the NEV and we re mainly want to improve the return on capital. You know, block cave is a really good mining method. The pros is that when you're mining, it's really cheap. But the cons is that when you have to develop that it's a lot of capital actually his own is 540 million us in capital expenditures. I'm not saying that block cave is not good, but in our case, can we manage? We want to be cast too positive on the long term. So we were really aggressive and we developed a 4400 m gallery on the upper part of the mine and to target three objectives, key zone that we intersect from K zone, a wall zone that we were, that was part of the resource. But where the definition was the, we we look at this as a block cave and said to be more selective and also an artificial intelligence target that was developed by Softwares. We were really pleased by the discovery of season of key zone, sorry key zone. It's interesting for us because it's mostly above the sea zone extraction level. So in terms of capital allocation for material handling and crushing, it's already in place and to go to the zone, you need to pass through key zone. So we want to be aggressive add to our resource portfolio, one or two other source of feed and to have a holistic approach to look at the mine plan for the long term to improve, improve the free cash flow, the nev and to have a good to be there for the long term. So it's extremely positive for us in terms of the cash flow generation with what we planned in three years, you can see that we, we, we crossed the inflection point in 2020 in Q two. So next year, the the gold production at re will increase. But also we are the the pushback is also reduced because we have less time to handle. And in 2026 you can see the sea zone that is kicking in where we will have the production from of of season. In addition to the cost reduction because new often the way that it is designed actually, we have 720 employees and at the beginning of 2026 will be 440. So it's giving an indication how the impact can be positive on the Asic. So it was mostly this and the time that is still having few minutes for questions. So we do have a couple of minutes for some questions. If there's any questions from the audience, no, just I guess a quick question for me as well. In terms of again, sticking the theme of M and A I guess is, is new gold looking outside. you know, in terms of adding additional assets, operations or is your existing pipeline, keeping you busy? I think that the first objective that we had as a team, it was to you make sure that the back office is, is in good order. I think it's the, the we deliver the production. I think we, we want to squeeze as much as we can from the asset that we have. I think we still have work to do, but for sure, it's in the nature of our business to, to replace what we mind. And I think we have certain limits at some stage. We need to, to do M and A for the same, say I can copy, paste the answer. And NTA said before, first, we need to be two to dance the tango. That's the first thing and also is to be big, to be big. It's not adding value to shoulders. We have to see all together, we can reinforce, rerate the company if we are together. And also to it will give access to different shoulders, more volatility would give access to also talent and it's mainly one concern that I have in our mining industry. So to give you an example to be more personal, I graduate more than 30 years years ago. And actually in the 10 guys in my promotion in one girl, only three are still working. I'm 56 in few days. It's not normal. I would say it's good for them because they have a happy life, but it's a time to give to the next generation. And we have a, we had a gap in talent in our industry for the guys who graduate between 2000 when the gold price was really low. And we are all running for talent and where we are having difficulties is because we're short of high qualified people or talented people, ambitious people. And the fact that we put some companies together will help us to face this challenge up to me. Thank you, Patrick. We're out of time but happy birthday in advance.


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