New Gold's Management Presents At Bank Of America Merrill Lynch 18th Annual Canada Mining Conference (Transcript)

New Gold Inc. (NGD)

Bank of America Merrill Lynch 18th Annual Canada Mining Conference

September 7, 2012 9:30 am ET


Randall Oliphant – Executive Chairman and Director


Michael Jalonen – Bank of America Merrill Lynch


Michael Jalonen – Bank of America Merrill Lynch

Okay, moving on to our next speaker, very pleased to have from New Gold, Randall Oliphant, Executive Chairman. Randall has been with the New Gold and predecessor companies since 2007 and some of you may remember him from being CEO of Barrick and for four years 1999-2003, and so he’s had extensive experience in the mining business. I think Randall we both started in the mining business at the same time. And we’re both 35 years old and it has been like 30 years and basically, but New Gold is an evolving mid-tier gold producer and Randall, why don’t I passed on to yourself?

Randall Oliphant

Well, thank you very much Mike, and good morning ladies and gentlemen and thanks to our friends at Bank of America Merrill Lynch for accommodating our schedule. I know I’m here in the midst of sort of diversified mining companies. We had a two day management offsite of our group, which just concluded last night, which is, I couldn’t be here with the Gold guys, but as I walk you through things, it was a pretty jollification for us because we set a bunch of objectives for ourselves the year ago. We get together as the senior management once a year and we were able to achieve everything that we set out to do.

In terms of some of the pillars that sort of support our company and what we try and build on. There is a few things that we hold our selves accountable. All the growth that we believe that we have done and what we love to do going forward is, that was accretive growth. I can show you on a per share basis, our resources have grown, how our cash flow has grown, our NAV per share has grown, because maybe what differentiates New Gold from some of the other intermediate or any other gold producers is the level of insider ownership that we have in our company. We really operate this business as shareholders ourselves and every decision that we made is basically shareholders.

One of the things that we do and that’s why we get together is that we hold ourselves accountable for delivering against the targets that we set. And I’ll show you, how we have done over the course of the past few years in terms of our production that we guided to, we actually delivered our costs, what we guided to, what we actually delivered. In terms of bringing mines on stream, when we say we are going to, in fact almost all of them come on early. We never had one come on late, and they come on what they are supposed to cost.

In terms of Rob was looking to build our team. And I’ll introduce some of the new people on the slide coming up, in terms that I think put New Gold in a stronger position it’s ever been. I don’t think we’ve ever had as good as set of partners as we have today. Our resources continue to grow. We continue to bring our cost down, despite being subject to all the same cost pressures that the rest of the industry is and that’s allowed our margins to grow much faster than the gold prices being going up.

Most recently we successfully commissioned New Afton. It hit commercial production earlier than we said, it would and that continues to ramp up. It’s target is l1,000 tons a day and its that we expect to get to by probably October or November and that’s what is its processing out today. We have other world class assets that we are developing. We believe that we can double our gold production, with the projects that we have in hand. We can do that with internally generated cash. We’re not dependent on the capital markets to be able to realize our growth aspirations. But we’ve got a decent track record of growing on net asset value per share. I think I will be able to demonstrate to you how we can – believe that we will be able to continue to do that.

Now, this has enabled our company over the course of there is a sense of frustration as you can see with the bottom three lines of the, these are all the various gold indices relative to the gold prices that’s been up 74% over the course of the past three years or so. And how our stock has done. And we believe by continuing to execute the way that we have by developing quality assets in politically secured jurisdiction that we’ll be able to outperform the gold price going forward.

I referred to operational execution, what we show for each of the last few years, is what our production guidance was sort of the green colored bars I guess and then the brown ones being what we actually delivered, and every single year, we deliver what we promise, from a production perspective, and in fact our cost have also been lower than what we projected. You can see for 2012, we estimate 405,000 to 445,000 ounces of production and we’re well on track to that. And from a cost perspective to $410 to $430 an ounce, and we’re also tracking well towards that number.

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