New Gold(US:NGD)2020-07-31 00:06Financial Data and Key Metrics Changes - In Q2 2020, the company reported revenue from continuing operations of $128.5 million, a 17% decrease compared to the prior year quarter due to lower grades, partially offset by higher gold prices [10] - The company produced approximately 98,000 gold equivalent ounces, which included 64,294 gold ounces, reflecting lower production compared to the prior year due to lower grades at Rainy River and New Afton [9] - The net loss for Q2 was $45.6 million or $0.07 per share, compared to a loss of $0.06 per share in Q2 2019 [11] Business Line Data and Key Metrics Changes - At Rainy River, gold production was 48,800 ounces, while New Afton contributed 15,500 ounces, leading to a total of 64,294 gold ounces produced [9] - The all-in sustaining cost for the quarter was $12.83 per equivalent ounce, which is 18% higher than the prior year due to lower grades and higher sustaining capital [9] - Cash costs at Rainy River were reported at $890 per gold equivalent ounce, while New Afton reported cash costs of $644 per gold equivalent ounce [22][27] Market Data and Key Metrics Changes - The average realized gold price for the quarter was $1,560 per ounce, while copper was sold at $2.51 per pound [10] - The company expects total estimated gold production for 2020 to be between 284,000 to 304,000 ounces, with copper production estimated at 65 million to 85 million pounds [20] Company Strategy and Development Direction - The company has closed a $300 million partnership with the Ontario Teachers' Pension Plan and divested the Blackwater project for CAD190 million, which will enhance its balance sheet [6] - Future operations are expected to return to pre-COVID levels, with a focus on free cash flow generation beginning in 2021 [7] - The company is positioned for a self-funded approach at New Afton while unlocking free cash flow [35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational performance despite challenges posed by COVID-19, highlighting the successful ramp-up of operations at Rainy River [5][22] - The company is optimistic about its future, with a focus on reducing debt and exploring opportunities at both Rainy River and New Afton [36][39] - Management noted that the current liquidity is approximately $560 million, which supports operations during the crisis [17] Other Important Information - The company has implemented COVID-19 rapid testing at Rainy River to enhance safety measures for employees [17] - The Blackwater asset is now classified as held for sale, with a $38 million unrealized impairment loss recorded [11] Q&A Session Summary Question: Discussion on free cash flow generation and its application - Management is excited about exploration opportunities at New Afton and Rainy River, pending permit completion [34] - The company plans to reduce debt by approximately $200 million in the near term using existing liquidity [37] Question: Confirmation on bond deal and debt redemption - Management confirmed the intention to redeem $200 million of 2025 notes later in the year, likely funded by proceeds from the Blackwater sale [49][50]