New Gold's 2025 Q2 Earnings Call: Unraveling Contradictions in M&A Strategy, Production Forecasts, and Financial Outlook

M&A strategy and priority, grade profile and production expectations at Rainy River, reserve replacement and resource conversion, New Afton production and transition to C-Zone, capital allocation and financial strategy are the key contradictions discussed in New Gold's latest 2025Q2 earnings call.



Production and Cost Performance:
- New Gold produced approximately 78,600 ounces of gold and 13.5 million pounds of copper in Q2, achieving an all-in sustaining cost (AISC) of $1,393 per ounce.
- At New Afton, gold production was driven by higher feed grade, while at Rainy River, the mill transition to higher-grade open pit ore led to increased production.
- Costs are expected to trend down throughout the year as production increases.

Exploration and Development Progress:
- New Gold made significant progress in exploration and development, with C-Zone cave construction at New Afton reaching 65% completion.
- Rainy River achieved a pit portal breakthrough, facilitating increased underground development and production rates.
- Exploration activities at both New Afton and Rainy River are ongoing, targeting further reserve replacement.

Financial Strength and Strategic Acquisitions:
- New Gold generated a record quarterly free cash flow of $63 million, with a liquidity position of $452 million.
- The company completed a strategic acquisition, consolidating its interest in New Afton to 100%.
- The focus remains on organic growth and shareholder returns, with M&A opportunities being evaluated prudently.

Safety and Operational Excellence:
- New Gold maintained a strong safety record with a low total recordable injury frequency rate (TRIFR) of 0.82.
- The company won multiple safety awards, reflecting its commitment to health and safety.
- The safety performance is attributed to the company's Courage to Care culture and robust safety initiatives.