Apr 25, 2019
Operator
Good morning. My name is Krista, and I’ll be your conference operator today.
At this time, I would like to welcome everyone to the New Gold First Quarter 2019 Financial Results. All lines have been placed on mute to prevent any background noise.
And after the speakers' remarks, we will have a question-and-answer session. [Operator Instructions].
Thank you. I will now turn the call over to Anne Day, Vice President, Investor Relations.
Ms. Day, you may begin.
Anne Day
Thank you, operator, and good morning, everyone. We appreciate you joining us today for New Gold's first quarter 2019 earnings conference call and webcast.
On the line today we have Renaud Adams, President and CEO; and Rob Chausse, our CFO. Other members of the management team have also joined us and will be available during the Q&A period at the end of the call.
Should you wish to follow along the webcast, please sign in from our homepage at newgold.com. Before we begin the presentation, I would like to direct your attention to our cautionary language related to forward-looking statement found in the presentation.
Today's commentary includes forward-looking statements relating to New Gold. In this respect, we refer you to a detailed cautionary note regarding forward-looking statements in the presentation.
You are cautioned that actual results and future events could differ materially from those expressed or implied in forward-looking statements. Slide 2 provides additional information and should be reviewed.
We also refer you to the section entitled Risk Factors and New Gold's latest MD&A and other filings available on SEDAR, which set out certain material factors that could cause actual results to differ. In addition, at the conclusion of the presentation, there are a number of endnotes that provide important information and should be reviewed in conjunction with the material presented.
I will now turn the call over to Renaud Adams.
Renaud Adams
Thank you, Anne. Good morning, everyone.
And thank you for joining us today. 2019 is sure the pivotal year for the company.
And our commitment remains on driving profitable mining at all operations to create sustainable value for our shareholders. And we're very pleased that we have got another step in the right direction with a strong first quarter that positions the company to achieve our 2019 guidance.
We are very encouraged that with the Rainy River Mine has delivered second consecutive quarter of in line results as the operations continue to improve quarter-over-quarter. And we remain focused on repositioning the operation for efficient and sustainable mining that will drive our objectives to become free cash flow in 2020.
The New Afton Mine has delivered another quarter of positive operational and financial results while the team further advanced the development of the B3 C-zone. Over the balance of the year we will continue to execute on our aggressive capital plans in order to address all remaining construction and mill upgrades at Rainy River while advancing the development at the C-zone at New Afton and continue our optimization studies at both operations for targeted completion in the fourth quarter.
Finally, we have returned the company’s focus on organic growth, and recently launched a strategic exploration driven program at New Afton and expect to launch an exploration program at Rainy Rivers in the second quarter. I will now turn the call over to Rob Chausse, CFO to discuss our first quarter results.
Rob?
Rob Chausse
Thanks for Renaud. And good morning.
I'm going to start with Slide 5 which provides our operating highlights for Q1. So during Q1, the company produced 123,000 gold equivalent ounces, and the amount consisted of 19.5 million pounds of copper, 61,500 gold ounces from Rainy River and 17,800 gold ounces from New Afton totaling 79,000 gold ounces.
Higher gold production as compared to prior year quarter was primary due to higher productivity at Rainy River. Our operating expense for the equivalent ounce -- equivalent gold ounce lowered in the prior year quarter due to improved operational performance and increased metal production.
Consolidated all-in sustaining cost for the quarter were $1,083 per equivalent ounce, 21% lower than the prior year quarter due to improved operating results and lower sustaining capital at Rainy River. Turning to our financial results on Slide 6.
The first quarter revenue from continuing operations was $168 million driven by sales of approximately 89,000 gold ounces at an average realized gold price of $1,301per ounce and sales of 20.2 million pounds of copper at $2.79 per pound. Q1 revenue was 13.8% higher than the prior quarter due to production increases related to a ramp up at Rainy River partially offset by lower copper production and lower realized gold prices.
Operating cash flow before working capital adjustments was approximately $71 million or $0.12 per share for the quarter, higher than the prior year quarter, again due to a better operational performance at Rainy River. The company recorded a net loss from continuing operations of approximately $13.4 million or $0.02 per share during Q1 compared to a net loss of $0.05 per share in the first quarter of 2018.
After adjusting for certain charges, net loss was $1.8 million or $0.0 per share in the quarter compared to a net loss of $17.9 million or $0.03 in the first quarter of ‘18. Our Q1 effective earning includes adjustments related to our other gains and losses.
Net loss and adjusted net loss were probably impacted by better performance at Rain River. Our MD&A has additional details on all the non-GAAP measures that we've discussed here.
Slide 7 on our CapEx provides a breakdown for our Q1 2019 capital expenditures. Total sustaining capital for the quarter was $44.7 million.
Spend was primarily related to tailings work and capitalized mining costs. Our growth capital was focused on project development and Renaud will go into further detail on capital shortly in his remarks.
Turning to Slide 8 on our liquidity. As at March 31, 2019, we had approximately $132 million in cash and $420 million in liquidity.
And lastly, we remain on track to meet our operating and capital guidance as was released in February. With that, I'll turn the call back to Renaud.
Renaud Adams
Thank you, Rob. I will now discuss on the key execution highlight before we open the line for a Q&A session.
I'm on Slide 10. At Rainy River, we're extremely pleased with the strong start of the year with a production over 62,000 ounces of gold equivalent in line with our production target, but also a significant improvement over the 40,000 ounces of gold equivalent achieved in the same period last year, which was driven by a continued improvement in the mill.
Our cash cost of $801 per gold equivalent represents a great achievement considering the high mining strip ratio over the quarter and we remain very confident to achieve our guidance. In terms of capital execution, effort was made in the first quarter to further advance the stripping on the Phase 2 in the pit at a time of the year where capital execution was somewhat limited by weather.
As a result, we've achieved a lower than guidance all-in sustaining cost of $1,330 an ounce which includes $140 an ounce of capitalized stripping. Sustaining capital is expected to increase in Q2 and Q3 as a favorable weather would allow for construction activity which will include tailings dam raise of Stage 2, the wick drains at the waste dump, the water management and the maintenance facility, to name only those projects.
On Slide 11. In terms of operational highlights at Rainy, the mill continues to improve quarter-over-quarter, a record mill availability of 89% despite significant plant repairs that were achieved in the Q1.
The record gold recovery is well up 90%, an improvement over the prior quarter despite the lower grade process. The only one spot to augmenting scorecard in the first quarter was the run rate throughput that was negatively impacted during a few weeks by the buildup of ice in the crushed ore stockpile, a situation that would be corrected to avoid possible repeat in the future.
On Slide 12, the work continues on the strategic review of the asset with the objective to deliver an optimized life of mine during the fourth quarter of this year. We are very pleased and encouraged with the results to-date.
And we're surely looking forward to delivering an increased value to this revised life of mine. We are focused on a cash flow positive free cash flow generation starting in 2020.
More to come as we continue to work on it with the first milestone in the mine plan itself that is due for early Q3. On Slide 13, as previously mentioned, we have retained the company’s focus on organic growth.
And as such, a Phase 1 exploration drilling will be launched at Rainy in the second quarter, with the first 7,500 meters of diamond drilling to test the potential repeats of the mineralized land, north of the Intrepid zone which is somewhat key considering that we are reviewing an optimized plan for the underground. The plan will be followed in the clearly third quarter by some regional geophysical and geochemical reconnaissance with the Northeast and the Southwest of the mine site.
Again, more to come as the company plans possible exploration update later in the second quarter. On Slide 14, at New Afton another solid quarter with in line production and operating expenses results.
We have initiated the B3 C-zone development program advancing the exploration drill towards the C-zone. The sustaining and growth capital expected to increase in the second quarter and for the remaining of the year as we ramp up our B3 C-zone capital activities.
But again, congratulations to the team for another very strong quarter at New Afton. On Slide 15, just as we discussed for the Rainy River, we are also very active and we're looking at our life of mine with a possible update on the life of mine plan for the fourth quarter.
The focus remain on updating the geotechnical and blockading aspects, while on the surface, we are focusing on the tailing disposal update with the C-zone -- potential C-zone in-pit disposal where we are going to be looking at the watering and stabilization of the current and old tailings in place, permitting and timeline update and capital and operational optimization update as well. Looking forward to deliver this updated plan in the fourth quarter of this year.
On Slide 16, we've launched our strategic exploration program with a first look on the near mine opportunities. The SLC west target represents a potential near term opportunity to expand one year of mining prior to B3 cave, allowing for better transition between the West-East cave to the B3 cave, a total of 8,750 meters planned with almost 7,900 meters completed to-date.
The company is currently analyzing the results to-date, with a focus on a mid-year updated resource estimate. The drilling was also initiated in a D-zone target with a total of 10 holes planned with completions scheduled in the third quarter.
More to come as we unlock -- as we complete the plan, analyze and disclose. In terms of regional targets, geophysical and geochemical survey planned for early third quarter to test both the near surface epithermal gold and deeper gold -- copper-gold porphyry potential.
The -- this bottom, I've talked quite a lot a couple quarters of the importance of returning the organic growth at New Afton. We believe that the site is poised with potential.
And while the effort has been really focused on the development of the C and the B3 Zone, we believe that initiating a strategic plan there with the view that down the road, further down the C-zone, the site may have more potential to unlock post the C-zone. On [Slide 16], on Blackwater.
Sorry, just before I go to the slide 16. On the geophysical on the New Afton Mine we’ve also planned an exploration update later in the second quarter.
On [Slide 16], on Blackwater, the company received a federal EA approval on April 15th and provincially expected by year end. The company has also entered into a participation agreement with two First Nations on April 18th and engagement and negotiation continue with the other First Nations.
The company continues to evaluate optimized scenario, including project sizing and processing options. We surely understand the challenge of the Blackwater project considering the current economic situation.
But we're extremely pleased with the progress to-date, the milestone achieved and the potential of the Blackwater down the road. On Slide 19, and as a closing remark, on behalf of New Gold, I would really like to thank our employees, Board of Directors, shareholders of First Nation whole community and all strategic partners for their continued support as we continue to reposition the company for profitable and sustainable mining.
We look forward to a successful 2019 of delivering and unlocking value. This will conclude the presentation.
I will now turn the call over to the operator for the Q&A portion of the call. Operator?
Operator
[Operator instructions]. Your first question comes from the line of Mike Parkin from National Bank.
Please go ahead, your line is open.
Mike Parkin
Just wondering how we can expect the underground spending at Rainy to go for Q2 and Q3 as it looks like it'll probably be fairly modest, I would think?
Renaud Adams
In fact nothing really planned but you see in Q1 as the growth where actually activities of closing has been disclosed in the Q4 which has -- was charged in the Q1 as we were closing -- temporarily closing the activities. You should not expect any underground activities.
The focus is on optimizing the plans and which will be part of our updated life of mine plan for Q4.
Mike Parkin
Okay. And then on Rainy, the strip there was 6.1, in Q1 kind of averaged around low 2s in 2018.
How should that kind of trend for Q2, Q3 of this year?
Renaud Adams
Well, let me say if you will, if you look at our technical guidance, if you will, we’ve disclosed earlier in the year, we were calling for slightly above 3 as an average. I would always promote to advance stripping exposed or increased flexibility in the test as we -- as long as we control our cost and we show improvement quarter-over-quarter.
So I would say that the stripping ratio is somewhat maybe higher than planned. I think we saw an opportunity here of managing our capital over the years.
We know that Q2, Q3 will be somewhat important as capitalized item at Rainy. So there was a good opportunity especially in the winter to push.
And as I’ve discussed we’re extremely pleased to see our operating expenses cash costs below -- remains below our guidance even though we had an increase. So all with our plan, definitely you will see a reduction.
We will complete the mining of the Phase 1 at the bottom of the pit now that the winter is over and that the watering has taken place. So we will return to the bottom of the Q1.
And slightly you'll see the strip ratio returning. There is a chance that we end the year at a higher strip ratio.
And again as long as we continue to control and reduce our costs, advanced stripping is always a good thing.
Mike Parkin
And in terms of the unit cost per ton, can you give a color on how the higher strip ratio kind of factors in? Like last time I checked you'd got a lot of material going to be material used the tailings dam construction so the haulage distance is higher, is that still playing a factor in your reported unit cost that with like Q2 to Q3 tailings dam work, will that play a factor into the unit mining costs, just because of the haul distance being longer than the waste dumps?
Renaud Adams
Now a good question and I appreciate. And definitely as we advance and complete the second quarter, we're going to be doing some sort of reconciliation and discuss our unit costs after six months of activities this year.
But I can report that our unit costs are in line with the guidance. As you mentioned by doing more pre-stripping, we were very pleased with the cost -- the mining costs in particular, we're trending slightly below our expectation in the Q1.
And that has effect as well as you pre-strip but some of it is pre-digging and involved lots of drilling and blasting activities. And so all-in-all, we were not -- we’re reprocessing it again as well, while we monitor and manage the demand and non-acid generations.
So I wouldn't say that the operation was as impacted this first quarter on that. We already have I believe nearly 600,000 tons of stockpile material to start the construction at the tailing.
We will continue as well to mining the core outside of the pit and the plan this year is somewhat optimize to supply rock at the same time providing for proper mining. And we continue to see improvement in the cost structure.
And it’s very encouraging.
Mike Parkin
Okay. And what's the stockpile?
You mentioned that you had issues with ice buildup there. Is there any thought towards the requirement of the stockpile ore dome or …?
Renaud Adams
The best -- we understand the location of the asset and when winter is part of the reality, the -- typically in the industry you'd see a lot the use of a dome on top of the crushed stockpile. This aspect was at early stage removed at our case, but there is also easier solutions and cheaper solutions and ease of solutions and solved and so far to avoid and we also did some improvement and will continue to do some improvement with the control of humidity in the tunnel and the apron feeder.
So in short it’s not something that we have seen last year, I think this year was somewhat a bit of a weird situation in February, March where we’ve seen quite a bit of fluctuation in temperature. But I think for a very low capital, might we’ll be in position to avoid this situation next year.
We are looking at the best practices. We are looking at what others are doing.
We’re not going to re-ramp the well. And while that is still possibility, I think there is a way to avoid it without the need to put a dome.
But we can we report more in the second quarter, we will definitely have identified the final solutions and start implementing them.
Mike Parkin
Okay, and then just one last final question. New Afton’s mine tons per day dropped a fair bit quarter-over-quarter.
Should we kind of think of similar rates for the remainder of the year? Do you see it as a seasonal thing, so any comment there?
Renaud Adams
Well, the -- we reduced it quarter-over-quarter but in line with our plans. I don't see any major issue there.
I think we will continue to train over the plan. I have John Ritter over the phone, happy to turn it quickly to John, if you have any further comments, but it is as planned, maybe a little bit lower than the previous quarter.
But as you mentioned, as we transition, there is more activities underground. And John, you want to comment on that one?
John Ritter
You're correct, Renaud. It's a little slow start this quarter, but we plan to meet our production targets.
Operator
Your next question comes from the line of Nick Jarmoszuk from Stifel. Please go ahead your line is open.
Nick Jarmoszuk
On Slide 8, want to get a little better color regarding debt optimization scenarios you guys are thinking about. And then also, can you address the freeing up of the credit facility with LCs?
Thanks.
Rob Chausse
Yes, so the debt optimization scenarios are essentially based around discussions we're having, whether they are strategic or they were capital markets oriented, the bonds have three years of life but are churnless. And so we're looking at all opportunities and ways to lower our leverage ratio and deal with the balance sheet.
The letters of credit, essentially that's just talked to maybe moving to another ATM out of the facility and freeing up that facility into surety bond or some other alternative that we’ve looked at. Essentially having them in the facility reduces the amount that we can draw from the 400.
Nick Jarmoszuk
Okay. And then with the -- in terms of the capital structure, do you have an estimate for a second lien capacity that you'd be able to issue?
Rob Chausse
Sorry, what capacity?
Nick Jarmoszuk
The second lien?
Rob Chausse
You know, I don’t have that.
Nick Jarmoszuk
Okay.
Operator
Your next question comes from the line of Steven Butler from GMP Securities. Please go ahead.
Your line is open.
Steven Butler
Thanks, operator. Renaud, you mentioned, of course, the ice buildup in the quarter weather related.
So the throughput in the Q1, I mean would you’ve expected it actually be potentially as good as Q4 or even better than Q4 if it was not for the ice buildup?
Renaud Adams
Well, you know, you pointed out that that's yes, I think good we all know honestly, like somewhat better production by combining the Q4, Q4 average run rate with an increased availability. So you’re absolutely right.
We're very pleased to see that the availability is running. There is no lack of capacity at the mill.
We continue to unlock the values. So we thought there was a issue.
To be very frank in January where we were saying like pretty smooth operations, good capacity being processed and an increase in availability. And then somewhere likely late February, March, we went through like a few difficult -- a couple of difficult weeks, which have lowered the average, but it's not like the whole quarter was actually at the lower run rate on the average throughput.
So absolutely. And this is what I feel encouraged, as we move forward, with the winter behind us with the capacity there, with the improved availability.
We're looking forward to a strong second half of the year,
Steven Butler
Right. And you mentioned, sustaining capital where we see, I guess, a peak level of sustaining capital for Rainy in the Q2 and Q3 periods?
Renaud Adams
Well those are definitely the biggest quarter. I would say even in the Q4, because when it comes to water management to the maintenance shaft.
Last year, we definitely weren't actively in the tailings as well after the fourth quarter. So the remaining three -- may be a portion of Q2, Q3 but really, for the remaining of the year.
So this is a kind of a cautious comment here. We know we've achieved very good all-in sustaining costs in the first quarter, but just to remind everyone of our capital plan for the year.
Steven Butler
Right. And then just to come back to the throughput Renaud, the estimate for 2019 tons per day -- tons mill per day 22,000 to 24,000 tons per day.
That was predicated on of course getting the availability up when you're there in Q4 apart from the ice. Is there anything else in the mill that needs to be unlocked if you will, apart from just pure availability and performance, other refinements in the mill?
Renaud Adams
So far, we continue like there is two aspect, there is the optimization and there is the, what we called the fixing. So we've done significant advance on that in the first quarter.
In the second quarter there was some remaining work to be done on the mills mostly around the brake system just to bring everything up to speed. So I think now when it comes to belt, when it comes to the main mill, we're in pretty good shape now.
As we advance, I have discussed previous quarter that we would be also looking an enhanced if you will define aligning system for the side that would further enhance our productivities there. So this is planned for July but in line with the change of line.
So all-in-all, I would think that the main repairs, the main jobs are behind us. And everything is in place now to really maximize the throughput.
Steven Butler
Okay. And lastly Renaud on New Afton I guess we'll see a study in optimization in the fourth quarter for both assets, but the -- and you talked in your remarks about maybe one year of mine life and then SLC West target potentially and tailings into disposal.
Any other aspects that you’re thinking of for the updated study on C-zone development plans for New Afton, I mean what else should we’d be watchful for?
Renaud Adams
Definitely, because the starting point is the 2015 study and with the adjusted capital for the C-zone there was somewhat as well an optimization around the sustaining. So one of the aspect is on the capital and operational and realigned everyone on our total capital there, which we believe there is quite a bit of optimizations from the overall view that back in 2015.
So capital definitely we continue to look for opportunities on the operating side. The SLC is an opportunity.
I really like these possibilities of eventually expanding giving a little bit more breathing in the transition zone which may as well reduce the need of reclaming some stockpile at some point in time during the plan. But those are optimization, but there is absolutely nothing shares, we're going to complete the drilling.
We're going to analyze the mine ability of it and that's an opportunity at this stage that is not currently contemplated in our optimized plan, so that would be a further potential optimization.
Operator
Your next question comes from the line of James Huntington from Scotia Bank. Please go ahead, your line is open.
James Huntington
I was just wondering if you could give us a bit more color on the reevaluation of the tip of the tailing stand slopes. I understand you are currently reviewing the geotechnical aspects.
That's a possibility reducing the amount of material required. So just wondering if you could give us a couple of comments on that?
Renaud Adams
I've been already at the slopes previously. This is a long-term opportunity.
When we joined, we were already well advanced in the permitting and execution of the Stage 2, we don't see this possible as we speak, the way we're looking at tailings down the road. The plan is to advance and complete the Stage 2, which is based on the 11 to 1.
Remember back in ‘16, the company disclosed their plan that moving forward it was an 11 to 1 with or without the use of buttressing. So this was already compromising, I would say of the Stage 2 entirely.
As we move forward because we don't see the need to address so far a Stage 3 in 2020, opens the opportunity to really work actively with the experts with the further stages approach starting in 2021. So too early stage.
Rainy has as definitely you know some challenging geotechnical aspects, so we know that the 11 to 1 and with or without buttressing works, the question now down the road is could we improve further? But, again this is all part of our optimization plan as well as we move forward how do we look at the mining?
And how do we focus on optimizing and mining and disposing as well, the tailings, the waste management as well, the pits versus the underground the potential. There would be definitely different ways to optimize.
And currently we are not considering an updated approach any optimization. We will -- we don't believe we would be on time by the end of 2019 to understand the full possibility of reducing the -- or optimizing the -- from Stage 3.
So the approach remains 11 to 1 and without buttressing in the updated plan. But we will definitely work on optimizing down the road.
James Huntington
Okay, great. And then just one more questions for Renaud again just regarding the mining throughput rates.
So obviously, in Q1, you’re mining at about 111,000 tons today from the pit. And you're planning to get up to 127,000 tons per day from the pit.
I was just wondering your sort of equipment addition scheduled for the year. I understand you've got four more trucks through this year, and just when we can expect them?
And then also what sort of effective utilizations you're expecting to -- what's your target for effective utilization for the year?
Renaud Adams
So, there's two things, there is the availability of the equipment. But the real focus, the real optimization has to do with the use of availability.
In terms of equipment you're absolutely right. There’s new trucks planned.
We'll continue to commission, there is one more to come and another one to commission. So we don’t freeze any capacity while we’re working as well and increasing the utilization, use of availability, drill as well.
I would think the limiting factor so far is not so much around shovel and the trucks. Drilling is where we have the most opportunities of improvement.
There would be a new drills coming as well, we're going to replace some drills that are we consider not efficient enough. So we'll definitely pick up the most on the drilling.
And we believe that the new equipment coming won't have the mining capacity. But again, the main focus is on optimizing drilling at this stage.
James Huntington
And sorry just going back to the utilization. Have you got a ballpark figure what you're doing for your trucks utilization wise at the moment?
Renaud Adams
I can't tell you. I don't have the numbers in front of me, but by experience and that having done before, I would not hesitate to say that it's definitely an opportunity to improve by at least 20% overall and our utilization and optimization.
Operator
Your next question comes from the line of Matthew Fields from Bank of America Merrill Lynch. Please go ahead.
Your line is open.
Matthew Fields
I wanted to follow up on next question about second lien capacity, maybe from a different way. The baskets in your 2025 maturity are a little looser than the '22’s.
Is there in your mind, can you address the ‘22’s with secured debt and leave the '25’s outstanding? Or do you think you have to go through a more global refi if you go the secured debt route?
Rob Chausse
Yes. I haven't discussed -- at least our facility would be -- it has to play in that discussion and I haven't sat down with any of the syndicate on it.
There's a potential to utilize second lien for the 500s. But I think that would be it as a -- but again, I would have to -- obviously the syndicate plays in that discussion.
Matthew Fields
And then obviously, those discussions are dependent on a lot of things, your results, the high yield market in general whatnot. To give us an idea of timing of when because you guys are doing a lot on the operational front with optimizing plans and furthering Rainy development and whatnot, and New Afton, do we have to see these operational milestones achieved before we can get a refi to the market?
Or is it something maybe we could see in 2019?
Rob Chausse
I don’t think we have to in the current market, but I think we would like to give the operations the runway to improve and continue to improve and gain some confidence around them. Again, there is potential, but I would expect to see -- not expect to see a refi in ‘19 and really look to ‘20.
But, again, as you mentioned, the market matters and how we perform and all that stuff may come into play. But my expectation is it would be an event in ‘20.
Operator
Your next question comes from the line of Don MacLean from Paradigm. Please go ahead.
Your line is open.
Don MacLean
Good morning, guys. Just a quickie on the quarter Rainy River, the sales were quite a bit more than the actual production.
Just wanted a bit of color as to how that might or might not influence the cash costs and all-in sustaining reported in the quarter, just bit of accounting clarification?
Rob Chausse
On the sale that came into 2019, it was a timing and shipping issue and they carry a bit higher costs but not a material impact in the ‘19 cost structure.
Don MacLean
Otherwise, costs would actually have been a little lower?
Rob Chausse
Right, but marginal.
Operator
Your next question comes from the line of Anita Soni from CIBC. Please go ahead, your line is open.
Anita Soni
Just a quick question on your stockpile levels at Rainy River, could you give me an idea of where that stands and what the head grade -- sorry what was the mined grade out of the pit this quarter?
Renaud Adams
I really -- I'm sorry, I really don't have that right in front of me right now. But we definitely can provide on that one.
But I can tell you that by year end, if you're looking at our overall reserve at the appendix of the presentation, there is two stockpile, there is a lower grade stockpile, really that is averaging between 0.3 and 0.5 that we were not really touching, this is stockpile for the mid-term and long-term and we'll see. But there's also a medium grade at stockpile that is averaging between 0.8 and 0.9.
So when you mine the pit like in the first quarter, our plans are already this year so utilize if you will some of the medium grade stockpile to feed the mill considering that has we push and open the Phase 2, we go through an old grades zone any way on the top. So within that that's the reason why you would see in the first quarter for instance where we did a lot of stripping, the average ore near mine was only 15,000.
And we've supplemented the mill by the medium grade of stockpile which at the end of the day again is very similar to when you open up your phase in term upgrade. So there was no real impact in the overall planned grade at the mill as a result of that.
And ….
Anita Soni
I'm just curious given that you're saying the reason medium grade stockpile certain extent of that -- certain amount of that let's say 1.8 I guess is the total that went to the mill, 1.6 of that was from the low grade stockpiles. That would imply that the head grade coming out of the pit was somewhat marginally higher probably, I guess my rough calculation would be probably in the 1.35, and less there was some selective high grading from the stockpile.
So I'm just trying to get an understanding of what pit at the point?
Renaud Adams
No. Yes, so remember that as you go up and down like everything so at the same time you’re opening the two on top, you’re also completing the bottom of the Phase 1 as well which brings pretty good grade as well and you will see the same phenomena in the second phase as well.
You start lower on the top and as you're lowering the phase to access better grade at the bottom of the phase, and it's the same thing for the third. So, you can see a mix of mining of a lower grade on the top of the Phase 2 with better grade at the bottom of Phase 1 and supplement of the medium grade stockpile.
Anita Soni
And then just in terms of the unit costs. Could you give us an idea of what the mining costs per ton are right now?
Renaud Adams
As I said we would reconcile if you refer back to the 2019 guidance, because we have done a lot of pre-stripping in the pit which somewhat has a good benefit, the cost benefit of minimizing the drilling and blasting activities. So if you compare with the guidance we were below around the 335 tons per mine or a slightly below the $3 on a ton move.
So we'll continue to see improvement quarter-over-quarter with a bit of a serious and a conscious comment that as you return to the bottom and you return in a full rock you’re drilling blasting activity would pick up again. So I would call in line, slightly better on the mining side for the quarter than the guidance.
Anita Soni
And then the last question is with regards to the spring that's coming. I guess I'm not sure if it's already in the factory right now.
But do you have any issues with your mining activities as the ice melts and things get a little murky?
Renaud Adams
Yes, as a matter of fact, when -- during the melting time we at some point basically have it towards the Q1, the mining at the bottom of the tip, so increase the pumping capacity and about to return now at the bottom to complete the Phase 1. But again it’s -- and overall here it did not because everything that was mined was to be stripped anyway, so we just was just abandoned for a short period of time the bottom of the pit and focus on the top but -- and now we're returning back so.
Operator
You are question comes from the line of Jake Abelman from Imperial Capital. Please go ahead, your line is open.
Matt Farwell
Hi, this is actually Matt Farwell. Just curious, you've made some good progress with selling assets and raising liquidity in the past.
I'm just wondering if you're comfortable with your current liquidity position and do you feel like you have options in the future to raise additional cash in the form of, for example, streaming deals, or non-core assets sales?
Renaud Adams
So the first question, the first part of your question is, are we comfortable with our liquidity, we are comfortable with the liquidity that we have it in place to achieve our 2019 operational plans. And as it continues to deliver on our plans or slightly better, of course would improve the situation.
As we move forward, as Rob has mentioned, there is a numerous possibilities of how we would address our financing. The short-term focus is definitely on improving the operational outlook, which will have a tremendous impact on how we deal with the debt.
So, too early stage, not there yet to give details about exactly how we would address this. But I can tell you that we're very comfortable with the liquidity to execute our 2019 plans.
Operator
And I will now turn the call back over to the presenters for closing remarks.
Anne Day
Yes, thank you, operator. Thanks, everyone, for joining us today.
If you have any further questions, feel free to reach out. Again, thanks for joining us and have a good day.
Operator
And this concludes today's conference call. Thank you for your participation and you may now disconnect.
Have a great day.