TSX- and NYSE-listed New Gold has produced 68 598 oz of gold and 13.6-million pounds of copper for the second quarter ended June 30. This was achieved at an operating expense of $1 156/oz of gold sold, with an all-in sustaining cost (AISC) of $1 381/oz of gold sold.

The company said delivering the second quarter as planned resulted in strong cash flow from operations of $100-million and free cash flow of $20-million. As a result, 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.

"The second quarter saw New Gold deliver another quarter as planned. New Afton [in British Columbia] delivered a strong operating quarter with low AISC, while Rainy River [in Ontario] made excellent progress preparing the openpit 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," New Gold president and CEO Patrick Godin said on July 31.

New Afton had a strong second quarter, producing 18 300 oz of gold and 13.6-million pounds of copper at an AISC of $433/oz of gold sold. The B3 cave continues to perform slightly better than plan, and C-zone ore production is ramping up concurrently 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 oz of gold at an AISC of $1 868/oz of gold sold. Prioritising openpit waste stripping activities in the first half positioned the openpit 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 t/d and recoveries over 90% for the quarter. Both the mine and mill are well positioned to deliver on yearly 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 AISC was $1 389/oz of gold sold.

With production set to increase and AISC set to decrease in the second half of the year, the company remains on track to achieve its full-year consolidated production guidance of 310 000 oz to 350 000 oz of gold and 50-million to 60-million pounds of copper at an AISC of $1 240/oz to $1 340/oz of gold sold.

"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%. 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,” Godin added.

New Gold 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 capital, totalled $90-million. The company delivered free cash flow of $20-million in the quarter while continuing to invest in its growth projects.

During the second quarter, the company successfully entered into an agreement relating to its strategic partnership with Ontario Teachers' Pension Plan, 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% 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.

As at June 30, 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 (ESG) reports and its 2023 Task Force on Climate-Related Financial Disclosures (TCFD) report. New Gold has published a yearly ESG report, formerly called a sustainability report, since 2015.

"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," Godin said.

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. One of the priorities for this year 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 about 50% complete, in line with plan. With the development of the in-pit portal set to start in the third quarter, underground main zone remains on track for first ore in the fourth quarter, with the ramp up in underground production to about 5 500 t/d by 2027.

At New Afton, the company says it 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. Lateral development continues to advance on plan, with over 80% of development metres complete. C-zone cave construction remains on track to achieve hydraulic radius in the second half of 2024. The new C-zone gyratory crusher and conveyor system continued to make significant progress towards completion in the second half of 2024. With C-zone development and the gyratory crusher and conveyor system nearing completion, the increase in processing rates, and decrease in costs is expected to generate meaningful free cash flow over the coming years.

"We made significant progress with our exploration efforts at both operations during the second quarter. After allocating additional funding to new opportunities at Rainy River earlier in the year, our exploration team advanced numerous high-priority surface and underground targets. At New Afton, with the completion of the exploration drift in the quarter, the team has been able to advance priority near-mine targets. Our exploration strategic objective is to target a sustainable production platform of about 600 000 oz/y gold equivalent with a line of sight until at least 2030. We are targeting releasing an additional exploration update to the market later in the third quarter," Godin said.

At Rainy River, exploration drilling is progressing from both surface and underground. Through the first half of 2024, the company drilled about 20 000 m at Rainy River, testing the down-plunge extension of ODM main and 17 east zones at depth, the intrepid strike-extension, and exploring the gap zone located between the intrepid and main zones. During the second quarter, surface drilling prioritised targets with potential for openpit extraction including the north-west trend, zone 280, and ODM east. Rainy River's priority is to sustain mill throughput beyond 2029.

Meanwhile, exploration efforts at New Afton achieved multiple notable milestones during the quarter. Following the intersection of high-grade copper/gold porphyry mineralisation at K-zone, the exploration drift being developed to provide additional drill platforms was completed and drilling of the K-zone and AI-Southeast targets from the drift started as planned. The company also completed exploration drilling to extend the D-zone resource envelope. The exploration strategy is intended to extend the mine life beyond 2030. Exploration efforts remain focused on potential near-mine zones located above the C-zone extraction level to minimise capital investment and maximise free cash flow generation.