(All amounts are in U.S. dollars unless otherwise indicated)

TORONTO, July 30, 2024 /CNW/ - New Gold Inc. ("New Gold" or the "Company") (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."

Second quarter consolidated production was 68,598 ounces of gold and 13.6 million pounds of copper at all-in sustaining costs1 of $1,381 per gold ounce sold (by-product basis).
New Afton had a strong second quarter, producing 18,300 ounces of gold and 13.6 million pounds of copper at all-in sustaining costs1 of ($433) per gold ounce sold (by-product basis). Second quarter gold and copper production were in-line with plan. The B3 cave continues to perform slightly better than plan, and C-Zone ore production is ramping up concurrent with construction of the cave footprint. Commercial production from C-Zone and crusher commissioning remains on-track for the second half of the year.
Rainy River's second quarter delivered to plan, producing 50,298 ounces of gold at all-in sustaining costs1 of $1,868 per gold ounce sold (by-product basis). Prioritizing open pit waste stripping activities in the first half positioned the open pit well to release higher grade ore and deliver stronger production in the second half. The mill continues to perform well, with throughput averaging over 26,000 tonnes per day and recoveries over 90% for the quarter. Both the mine and mill are well positioned to deliver on annual guidance.
Through the first six months of the year, gold production represented 42% of the mid-point of guidance, and copper production represented 49%, in-line with the previously stated outlook. For the first six months, consolidated all-in sustaining costs1 were $1,389 per gold ounce sold. With production set to increase and all-in sustaining costs set to decrease in the second half of the year, the Company remains on-track to achieve 2024 consolidated production guidance of 310,000 to 350,000 ounces of gold and 50 to 60 million pounds of copper at all-in sustaining costs1 of $1,240 to $1,340 per gold ounce sold (by-product basis).
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."

The Company delivered strong cash flow from operations during the second quarter of $100 million, driven by higher copper production and higher metal prices. Cash generated from operations, before changes in non-cash operating working capital1, totaled $90 million. The Company delivered free cash flow1 of $20 million in the quarter while continuing to invest in its growth projects. With the Company exiting the first half of 2024 free cash flow positive, New Gold has now entered a sustained free cash flow generation period.
During the second quarter, the Company successfully entered into an agreement relating to its strategic partnership with Ontario Teachers' Pension Plan ('Ontario Teachers') whereby New Gold increased its effective free cash flow interest in New Afton to 80.1%. Ontario Teachers' free cash flow interest in New Afton was reduced from 46.0% to 19.9% in exchange for an upfront cash payment of $255 million. To fund the payment, the Company completed an oversubscribed $173 million equity financing, and borrowed $100 million from its existing revolving credit facility. Through this transaction, New Gold was successfully able to deliver a meaningful increase in attributable life-of-mine cash flow in an existing high-quality operation while maintaining its balance sheet strength and financial liquidity. As at June 30, 2024, cash and cash equivalents were $184 million, and the Company maintained a liquidity position of $461 million.
During the second quarter, the Company also announced the publication of its 2023 Environmental, Social and Governance Reports ("ESG Reports") and its 2023 Task Force on Climate-Related Financial Disclosures Report ("TCFD Report"). New Gold has published an annual ESG Report since 2015 (formerly, the Sustainability Report) reporting on the sustainability-related material topics that matter most to its stakeholders. The 2023 ESG Reports and TCFD Report are available on New Gold's Sustainability Microsite, accessible through www.newgold.com.
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.

At Rainy River, underground development rates continued to ramp up during the second quarter and are expected to continue to increase into the second half of the year. As previously discussed, one of the priorities for 2024 is to establish the primary ventilation circuit. At the end of the second quarter, both the ODM East ventilation loop and the fresh air raise were approximately 50% complete, in-line with plan. With the development of the in-pit portal set to commence in the third quarter, underground Main Zone remains on-track for first ore in the fourth quarter of 2024, with the ramp-up in underground production to approximately 5,500 tonnes per day by 2027.
At New Afton, the Company see & read more on
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