Scandium Canada Ltd. press release

NEW GOLD REPORTS FIRST QUARTER 2024 RESULTS

2024-04-30

TSXV - TSX Venture Exchange · Scandium · Rare Earth Elements · Gold · Canada · Corporate Finance

Canada NewsWire

Annual Guidance Tracking to Plan, Growth Projects Make Meaningful Strides Towards Completion

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

TORONTO , April 30, 2024 /CNW/ - New Gold Inc. ("New Gold" or the "Company") (TSX: NGD) (NYSE American: NGD) reports first quarter 2024 results. First quarter 2024 production totaled 70,898 gold ounces and 13.3 million pounds of copper as planned at an operating expense of $1,106 per gold ounce sold (co-product basis) 3 and all-in sustaining costs 1 of $1,396 per gold ounce sold (by-product basis). Another solid quarterly performance that delivered on plan, as the Company approaches a sustained free cash flow generation period, expected to commence in the second half of 2024.

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Solid Operating Performance in the First Quarter Positions Rainy River and New Afton to Deliver on Planned Production Improvements Throughout the Year

"The first quarter of 2024 went as planned for New Gold as outlined in our operational outlook from early-February," stated Patrick Godin , President and CEO. "New Afton delivered another strong operating quarter, while Rainy River made excellent progress sequencing waste stripping in order to secure the substantial increase in production expected in the second half of the year. We exit the first quarter as planned, and are well positioned to meet our guidance targets."

First quarter consolidated production of 70,898 ounces of gold and 13.3 million pounds of copper at all-in sustaining costs 1 of $1,396 per gold ounce sold (by-product basis). New Afton had a strong first quarter, producing 18,179 ounces of gold and 13.3 million pounds of copper at all-in sustaining costs 1 of $241 per gold ounce sold (by-product basis). First quarter gold and copper production were in-line with plan. The B3 cave continues to perform according to 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 first quarter delivered to plan, producing 52,719 ounces of gold at all-in sustaining costs 1 of $1,638 per gold ounce sold (by-product basis). The transition from Phase 3 to Phase 4 pushback is complete, and waste stripping activities of the upper benches of Phase 4 advanced according to plan in the first quarter, positioning the pit to release additional higher grade ore in the second half of the year. The second half of 2024 is expected to represent approximately 60% of annual production. The Company is 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 costs 1 of $1,240 to $1,340 per gold ounce sold (by-product basis).

Growth Projects Remain On-Track to Drive Increasing Production Profile Over Next Three Years

"The first quarter saw significant progress from our two major growth projects, the Rainy River underground Main project and the New Afton C-Zone block cave project. Rainy River remains on track to achieve first ore from 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. These projects are expected to drive production growth of 35% gold and 60% copper over the next three years compared to 2023 ," added Mr. Godin.

At Rainy River , underground Main Zone remains on-track for first ore in the fourth quarter of 2024. The priority for 2024 is to establish the primary ventilation circuit and access multiple mining zones, facilitating a ramp-up in underground production to approximately 5,500 tonnes per day by 2027. With an average gold grade approximately three times higher than the open pit, Rainy River gold production is expected to increase significantly with increasing underground mill feed over the next three years. During the quarter, Rainy River achieved a record quarterly development advance rate of 950 metres. With the opening of additional headings and delivery of additional underground mining equipment, development rates are expected to increase throughout the year. Additionally, raiseboring of a 5 metre diameter, 420 metre long fresh air raise, is on track to commence in the second quarter. At New Afton, the Company expects to commission the C-Zone gyratory crusher and conveyor system on time, with the cave achieving hydraulic radius in the second half of 2024. These two milestones are expected to facilitate a return to previously achieved processing rates of more than 14,500 tonnes per day while significantly reducing unit operating costs per tonne. C-Zone development and cave construction is on track to achieve the required 18 draw bells for hydraulic radius in the second half of 2024. Significant progress was made in construction of the new C-Zone gyratory crusher in the first quarter, and concrete work is on track for completion in the second quarter. With the expected commissioning of the gyratory crusher and conveyor system in the second half of 2024, C-Zone will be set up for high-capacity, low-cost, low-emission materials handling for the life-of-mine.

Exploration Efforts Continue to Ramp Up in Pursuit of Sustainable Production Objectives

"Exploration efforts at both operations continue to advance the pipeline of opportunities to extend mine lives well into the next decade with modest capital investment, in-line with our stated strategic objective of targeting a sustainable production platform of approximately 600,000 gold equivalent ounces per year with a line of sight until at least 2030. We will be in a better position to accelerate our exploration efforts at New Afton in the second quarter with the completion of the exploration drift," stated Mr. Godin.

At Rainy River , exploration drilling from both surface and underground is progressing as scheduled, testing the down-plunge extension of ODM Main and 17 East Zones at depth, and exploring the Gap zone located between the Intrepid and Main Zones. In addition, the Company has identified two new underground exploration targets located close to existing infrastructure which would likely require minimal capital investment to bring into production. These include the114-Deep target located below ODM West, and the Intrepid Strike-Extension target located between the 300 and 600 Levels. To test these opportunities, the Company will allocate an additional $4 million in 2024. Rainy River's priority remains to sustain mill throughput beyond 2029, and as such, infill drilling of near-surface targets with potential for open pit extraction, including NW-Trend and ODM East, is scheduled to commence in the second quarter. At New Afton, the Company continues to focus exploration on near-mine zones located above the C-Zone extraction level, prioritizing opportunities with the potential to extend mine life with minimal capital investment. An exploration drift is currently being developed from the base of the Lift 1 cave to provide ideal drill platforms for the K-Zone and AI-Southeast targets. The exploration drift is advancing as planned, with drilling expected to commence in May. Exploration drilling to extend the D-Zone resource envelope is ongoing and is expected to be completed in the second quarter.

Consolidated Financial Highlights

| | Q1 2024 | Q1 2023 | | Revenue ($M) | 192.1 | 201.6 | | Operating expenses ($M) | 106.8 | 117.2 | | Net loss ($M) | (43.5) | (31.8) | | Net loss, per share ($) | (0.06) | (0.05) | | Adj. net earnings ($M) 1 | 13.1 | 18.4 | | Adj. net earnings, per share ($) 1 | 0.02 | 0.03 | | Cash generated from operations ($M) | 54.7 | 60.6 | | Cash generated from operations, per share ($) | 0.08 | 0.09 | | Cash generated from operations, before changes in non-cash operating working capital ($M) 1 | 72.5 | 75.7 | | Cash generated from operations, before changes in non-cash operating working capital, per share ($) 1 | 0.11 | 0.11 |

Revenue decreased over the prior-year period primarily due to lower gold sales volumes partially offset by higher metal prices and higher copper sales. Operating expenses decreased over the prior-year period due to lower production and sales and an inventory write-up gain of $8 million at Rainy River . Net loss increased over the prior-year period primarily due to a decrease in revenues resulting from lower gold sales and higher unrealized losses on the revaluation of the Rainy River gold stream obligation and the New Afton free cash flow interest obligation. The net loss was partially offset by lower operating costs and lower exploration and development expenses. Adjusted net earnings 1 decreased over the prior-year period due to lower revenues, higher depreciation and depletion expenses, and higher adjusted income tax expense, partially off-set by lower operating expenses and lower exploration expenses. Cash generated from operations decreased over the prior-year period primarily due to lower revenue. March 31, 2024 cash and cash equivalents of $157 million .

Consolidated Operational Highlights

| | Q1 2024 | Q1 2023 | | Gold production (ounces) 2 | 70,898 | 82,477 | | Gold sold (ounces) 2 | 70,077 | 87,206 | | Copper production (Mlbs) 2 | 13.3 | 10.3 | | Copper sold (MIbs) 2 | 12.0 | 9.5 | | Gold revenue, per ounce ($) 3 | 2,061 | 1,864 | | Copper revenue, per pound ($) 3 | 3.64 | 3.79 | | Average realized gold price, per ounce ($) 1 | 2,090 | 1,890 | | Average realized copper price, per pound ($) 1 | 3.86 | 4.10 | | Operating expenses per gold ounce sold ($/ounce, co-product) 3 | 1,106 | 1,000 | | Operating expenses per copper pound sold ($/ounce, co-product) 3 | 2.44 | 3.17 | | Depreciation and depletion per gold ounce sold ($/ounce) | 897 | 636 | | Cash costs per gold ounce sold (by-product basis) ($/ounce) 1 | 874 | 922 | | All-in sustaining costs per gold ounce sold (by-product basis) ($/ounce) 1 | 1,396 | 1,357 | | Sustaining capital ($M) 1 | 25.9 | 26.3 | | Growth capital ($M) 1 | 35.1 | 36.8 | | Total capital ($M) | 61.1 | 63.1 |

Rainy River Mine

Operational Highlights

| Rainy River Mine | Q1 2024 | Q1 2023 | | Gold production (ounces) 2 | 52,719 | 66,201 | | Gold sold (ounces) 2 | 53,097 | 71,891 | | Gold revenue, per ounce ($) 3 | 2,085 | 1,882 | | Average realized gold price, per ounce ($) 1 | 2,085 | 1,882 | | Operating expenses per gold ounce sold ($/ounce) 3 | 1,223 | 1,035 | | Depreciation and depletion per gold ounce sold ($/ounce) | 792 | 553 | | Cash costs per gold ounce sold (by-product basis) ($/ounce) 1 | 1,165 | 998 | | All-in sustaining costs per gold ounce sold (by-product basis) ($/ounce) 1 | 1,638 | 1,375 | | Sustaining capital ($M) 1 | 22.2 | 22.3 | | Growth capital ($M) 1 | 7.4 | 5.7 | | Total capital ($M) | 29.6 | 28.0 |

Operating Key Performance Indicators

| Rainy River Mine | Q1 2024 | Q1 2023 | | Open Pit Only | | | | Tonnes mined per day (ore and waste) | 91,587 | 118,481 | | Ore tonnes mined per day | 16,476 | 36,380 | | Operating waste tonnes per day | 51,486 | 60,360 | | Capitalized waste tonnes per day | 23,626 | 21,741 | | Total waste tonnes per day | 75,111 | 82,101 | | Strip ratio (waste:ore) | 4.56 | 2.26 | | Underground Only | | | | Ore tonnes mined per day | 878 | 765 | | Lateral development (metres) | 950 | 876 | | Open Pit and Underground | | | | Tonnes milled per calendar day | 25,023 | 22,400 | | Gold grade milled (g/t) | 0.83 | 1.12 | | Gold recovery (%) | 91 | 91 |

First quarter gold production was 52,719 ounces, a decrease over the prior-year period as planned primarily due to lower gold grade, partially offset by higher tonnes processed. Production is expected to strengthen in the second half of the year and represent approximately 60% of annual production, as lower grade ore is processed and waste stripping activities continue in the first half of the year, allowing access to higher grade ore from the Phase 4 open pit in the second half of the year. Operating expense per gold ounce sold increased over the prior-year period due to lower gold grade and lower sales volumes, partially offset by an increase in the net realizable value of the low grade stockpile with an impact of approximately $150 per gold ounce sold in the first quarter. All-in sustaining costs 1 per gold ounce sold (by-product basis) increased over the prior-year period due to higher operating expenses and lower sales volumes. All-in sustaining costs are expected to decrease throughout 2024 as the processing of lower grades in the first half of the year due to increased stripping activities are completed, and higher grade ore is accessed in the second half of the year. Total capital increased over the prior-year period due to higher growth capital spend. Sustaining capital 1 is primarily related to capitalized waste, capital components, and tailings management and construction. Growth capital 1 is related to the underground development as the underground Main Zone continues to advance. Free cash flow 1 for the quarter was a net outflow of $3 million (net of a $7 million stream payment), a decline over the prior-year period primarily due to a decrease in revenues, but in-line with the planned open pit sequence for the first half of the year as outlined in the Company's guidance.

New Afton Mine

Operational Highlights

| New Afton Mine | Q1 2024 | Q1 2023 | | Gold production (ounces) 2 | 18,179 | 16,276 | | Gold sold (ounces) 2 | 16,980 | 15,316 | | Copper production (Mlbs) 2 | 13.3 | 10.3 | | Copper sold (Mlbs) 2 | 12.0 | 9.5 | | Gold revenue, per ounce ($) 3 | 1,988 | 1,782 | | Copper revenue, per ounce ($) 3 | 3.64 | 3.79 | | Average realized gold price, per ounce ($) 1 | 2,108 | 1,928 | | Average realized copper price, per pound ($) 1 | 3.86 | 4.10 | | Operating expenses ($/oz gold, co-product) 3 | 740 | 839 | | Operating expenses ($/lb copper, co-product) 3 | 2.44 | 3.17 | | Depreciation and depletion ($/ounce) | 1,216 | 1,013 | | Cash costs per gold ounce sold (by-product basis) ($/ounce) 1 | (34) | 568 | | Cash costs per gold ounce sold ($/ounce,co-product) 1 | 811 | 930 | | Cash costs per copper pound sold ($/pound, co-product) 1 | 2.67 | 3.52 | | All-in sustaining costs per gold ounce sold (by-product basis) ($/ounce) 1 | 241 | 872 | | All-in sustaining costs per gold ounce sold ($/ounce, co-product) 1 | 894 | 1,021 | | All-in sustaining costs per copper pound sold ($/ounce, co-product) 1 | 2.94 | 3.86 | | Sustaining capital ($M) 1 | 3.7 | 4.0 | | Growth capital ($M) 1 | 27.7 | 31.1 | | Total capital ($M) | 31.4 | 35.0 |

Operating Key Performance Indicators

| New Afton Mine | Q1 2024 | Q1 2023 | | New Afton Mine Only | | | | Tonnes mined per day (ore and waste) | 10,734 | 9,185 | | Tonnes milled per calendar day | 10,153 | 8,142 4 | | Gold grade milled (g/t) | 0.68 | 0.78 4 | | Gold recovery (%) | 88 | 89 4 | | Copper grade milled (%) | 0.72 | 0.70 | | Copper recovery (%) | 90 | 91 | | Gold production (ounces) | 17,858 | 13,731 | | Copper production (Mlbs) | 13.3 | 10.3 | | Ore Purchase Agreements 4 | | | | Gold production (ounces) | 321 | 2,545 |

First quarter production was 18,179 ounces of gold and 13.3 million pounds of copper. The increase in gold production over the prior-year period is due to higher tonnes milled, partially offset by lower gold grade. The increase in copper production over the prior-year period is due to higher tonnes milled and higher copper grade. Operating expense per gold ounce sold and per copper pound sold decreased over the prior-year period primarily due to higher gold and copper sales volumes. All-in sustaining costs 1 per gold ounce sold (by-product basis) decreased over the prior-year period due to the benefit of higher by-product revenues and gold sales volumes. Total capital decreased over the prior-year period, primarily due to lower growth capital 1 spend. Sustaining capital 1 primarily related to tailings management and stabilization activities. Growth capital primarily related to the C-Zone underground development. Free cash flow 1 for the quarter was a net outflow of $4 million , an improvement over the prior-year period primarily due to higher revenue and lower growth capital spend.

First Quarter 2024 Conference Call and Webcast

The Company will host a webcast and conference call tomorrow, Wednesday, May 1 2024 at 8:30 am Eastern Time to discuss the Company's first quarter consolidated results.

Participants may listen to the webcast by registering on our website at www.newgold.com or via the following link https://app.webinar.net/g2ZWDWpOq6Q Participants may also listen to the conference call by calling North American toll free 1-888-664-6383, or 1-416-764-8650 outside of the U.S. and Canada , passcode 48240748 To join the conference call without operator assistance, you may register and enter your phone number at https://emportal.ink/49Ba0Hy to receive an instant automated call back A recorded playback of the conference call will be available until November 26, 2023 by calling North American toll free 1-888-390-0541, or 1-416-764-8677 outside of the U.S. and Canada , passcode 240748. An archived webcast will also be available at www.newgold.com

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. For further information on the Company, visit www.newgold.com .

Endnotes

1. "Cash costs per gold ounce sold", "all-in sustaining costs (AISC) 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 total 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.