New Gold registers strong Q4 2024 results with lower costs and higher cash flow

New Gold Inc. (TSX and NYSE American: NGD) delivered a robust financial and operational performance in the fourth quarter of 2024, exceeding cost guidance while maintaining steady gold production. The company reported gold production growth, achieving a total of 298,303 ounces of gold for the year, alongside 54.0 million pounds of copper. Despite external pressures and production challenges late in the year, New Gold maintained its focus on cost discipline, resulting in all-in sustaining costs (AISC) of $1,239 per ounce—below the company’s lowest cost guidance threshold.

The company’s financial health showed significant improvement, with free cash flow reaching $22 million in Q4 alone, contributing to an annual total of $85 million. This was accomplished even after a substantial capital investment of over $270 million, directed towards mine development and expansion projects. CEO Patrick Godin stated that the company’s performance in 2024 underscored the strength of its cost management strategy and its ability to sustain long-term mine life extension while increasing profitability.

What Contributed to New Gold’s Strong Free Cash Flow in Q4?

New Gold’s ability to generate consistent free cash flow was supported by rising commodity prices and enhanced operational efficiency at its key assets. The company reported Q4 2024 revenue of $262.2 million, a sharp increase from $199.2 million in Q4 2023. The boost in revenue was driven by higher gold and copper prices, along with a 21% increase in copper sales volume compared to the previous year.

The company’s net earnings stood at $55.1 million for the fourth quarter, marking a significant turnaround from the $27.4 million loss in Q4 2023. Adjusted net earnings reached $59.1 million, reflecting a substantial improvement in profitability. Additionally, New Gold closed the year with $105 million in cash reserves, following the repayment of its remaining $50 million credit facility.

How Did New Gold’s Mines Perform in 2024?

New Gold’s core assets, the Rainy River and New Afton mines, played a crucial role in the company’s strong financial and operational performance. Both mines demonstrated gold production growth and cost efficiencies, despite operational adjustments throughout the year.

The Rainy River Mine produced 225,694 ounces of gold in 2024. While this marked a decline from 253,745 ounces in 2023, the company attributed the decrease to lower processed ore grades. However, improved recovery rates helped offset some of the impact. New Gold continued to advance underground development at the Main and Intrepid zones, ensuring that future production remains steady while optimizing costs.

The New Afton Mine delivered 72,609 ounces of gold and 54.0 million pounds of copper, surpassing 2023 production levels. The mine benefited from the early commissioning of the C-Zone project, which significantly improved throughput and extended mine life extension beyond previous estimates. The company also increased its ownership stake in New Afton to 80.1% by repurchasing a portion of the Ontario Teachers’ Pension Plan’s free cash flow interest.

What Is the Outlook for 2025 and Beyond?

New Gold’s 2025 operational outlook remains optimistic, with expectations of increased production and lower costs. The company projects gold production growth of approximately 16%, targeting between 325,000 and 365,000 ounces for the year. Copper production is expected to remain stable at 50 to 60 million pounds, supported by continued ramp-up at the New Afton C-Zone.

Cost efficiency will remain a priority, with all-in sustaining costs projected to decline by 17% to a range of $1,025 to $1,125 per ounce. This cost reduction will be driven by higher production levels, lower operating expenses, and continued efficiency improvements at both mines. CEO Patrick Godin emphasized that New Gold is entering a critical phase where previous capital investments in mine development will start delivering tangible benefits, enhancing profitability while ensuring long-term sustainability.

How Is New Gold Extending the Life of Its Mines?

A key component of New Gold’s long-term strategy is extending the operational life of its key mining assets. The company recently announced that both New Afton and Rainy River mines will see mine life extensions, reflecting the success of its ongoing exploration and resource expansion efforts.

At New Afton, an increase in mineral reserves has pushed the estimated mine life to 2031, supported by high-grade material from the East Extension Zone. This addition enhances the economic outlook for the mine while providing a solid foundation for continued production growth. The completion of the C-Zone project, combined with infrastructure improvements, ensures that the mine remains a core contributor to the company’s long-term success.

At Rainy River, an optimized mine plan has extended open-pit operations through 2029, with underground mining expected to continue beyond that. The addition of the Phase 5 pushback project has helped maintain ore processing capacity while deferring the processing of low-grade stockpiles. The underground expansion at the Intrepid Zone is also expected to contribute to future production increases.

What Are New Gold’s Financial Priorities Moving Forward?

New Gold remains focused on maximizing free cash flow and maintaining strong financial flexibility. With total capital expenditures expected to range between $270 million and $315 million in 2025, the company will continue funding its mine expansion initiatives while keeping costs under control. Sustaining capital is expected to decrease slightly, reflecting the completion of key infrastructure projects, while growth capital will be allocated to underground mine development and production optimization efforts.

The company also aims to strengthen its balance sheet by maintaining disciplined spending, reducing debt, and capitalizing on favorable market conditions. With gold prices trending upward, New Gold is well-positioned to take advantage of higher margins while delivering long-term value to shareholders.

What Lies Ahead for New Gold?

As New Gold moves into 2025, the company is poised for continued gold production growth, improved cost efficiency, and sustained free cash flow generation. With key expansion projects progressing ahead of schedule and mine life extensions secured, the company is entering a period of strong financial and operational momentum.

CEO Patrick Godin reaffirmed New Gold’s commitment to disciplined capital management and operational excellence, stating that the company’s long-term strategy is designed to ensure profitability while maintaining flexibility for future growth opportunities. With a strong foundation in place, New Gold is well-equipped to navigate industry challenges while capitalizing on emerging opportunities in the global mining sector.