May 5, 2021
Operator
Hello and thank you for standing by, and welcome to the New Gold First Quarter 2021 Earnings Conference Call. [Operator instructions] Please be advised that today's conference is being recorded.
I'd now like to hand conference over to your speaker today, Ankit Shah, VP of Strategy and Business Development. Please go ahead.
Ankit Shah
Thank you, Michelle, and good morning, everyone. I appreciate you joining us today for New Gold's first quarter 2021 earnings conference call and webcast.
On the line today we have Renaud Adams, President and CEO; and Rob Chausse, CFO. Should you wish to follow along with the webcast, please sign in from our home page at newgold.com.
Before the team begins the presentation today, I would like to direct your attention to our cautionary language related to forward-looking statements found on slides 2 and 3 of the presentation. Today's commentary includes forward-looking statements relating to New Gold.
In this respect, we refer you to our 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 and Slide 3 provide additional information and should be reviewed. We also refer you to the section entitled risk factors in 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 end notes that provide more important information and should be reviewed in conjunction with the material presented. I will now turn the call over to Rob Chausse.
Rob Chausse
Thanks very much Ankit. And good morning, Slide 5 providers our operating highlights for Q1.
The production details are consistent with our April production press release. During Q1m the company produced 96,000 gold equivalent ounces.
Amount consisted of 13.8 million pounds of copper, 54,600 gold ounces from Rainy River and 11,994 ounces of gold from New Afton. Total of 66,650 gold ounces lower gold production as compared to the prior year quarter is primarily due to lower grades and lower throughput at New Afton.
Our operating expense per equivalent ounce was higher than the prior year quarter due to lower sales volumes and a strengthening Canadian dollar with regards to the impact of the US dollar CAD FX rate in the first quarter against our FX rate, our guided FX rate of $1.28 impact was around $2 million. Going forward and sensitivity basis a $0.05 change in the US CAD FX rate represents about a $9 million impact on our operating cash flow.
Consolidated all-in sustaining costs for the quarter were $1,550 per equivalent ounce, 7% higher than the prior year quarter primarily due to lower sales volumes. Turning into our financial results on slide 6; first quarter revenue was $164.9 million driven by sales of approximately 63,500 gold ounces at an average realized gold price of $1,788 per ounce, and sales of 13.3 million pounds of copper at $3.83 per pound.
Q1 revenue was 16% higher than the prior year quarter due to higher metal prices. Our operating cash flow before working capital adjustments was $63.7 million or $0.09 per share for the quarter, higher than the prior year quarter primarily due to higher metal prices.
Company recorded net earnings of $15.1 million or $0.02 per share during Q1 compared to a loss of $0.04 per share in Q1 2020. After adjusting for other certain charges, net earnings were $8.1 million or $0.01 per share in Q1 compared to a net loss of $18 million or $0.03 per share in the first quarter of 2020, differences driven by higher revenue and lower depreciation.
Our Q1 adjusted earnings includes adjustments related to our unrealized adjustments on the Rainy River stream, mark-to-market and free cash flow royalty. Our MD&A has additional details on the non-GAAP measures discussed.
Capital expenditures on the next slide. We're around $56.4 million in the quarter.
$37.9 million was spent on sustaining capital and $18.5 million on growth capital. Sustaining capital spend was primarily related to planned tailings work on both operating assets and B3 mine development at New Afton.
Growth capital was focused on project development, specifically the TAT project at New Afton. We remain on track to achieve both operating and capital guidance.
On slide 7 provides our capital structure, at March 31, 2021, we had $131 million in cash and $435 million in liquidity. With that, I'll turn the call over to Renaud Adams, our CEO.
Renaud Adams
Thanks, Rob. And thanks again, everyone for joining us today.
I'm on slide 9 as for additional comment on sustainability and ESG. Beside our health and safety, global efforts, the New Gold has four sustainability focused area, indigenous people, tailings management, water and climate, all of which will be fully addressed in our upcoming sustainability annual report.
We have adapted our sustainability effort to align with the most pressing ESG issues facing our company in the mining industry. As we look forward, it is not about presenting a new way of operating but looking at what we are currently doing and looking for area to improve we can build on.
We are currently working on our 2030 roadmaps with ambitious goal to reduce our emissions. While continuing to create value to our host community in the area we operate.
Our side, I've implemented employee driven programs that help generate ideas for energy efficiencies to help achieve our overall carbon footprint, both slides have environmental management systems and include water, climate, tailings risk on our operation. Operation actively seeks our partnership and work with local communities to understand the cultural and traditional aspect for progressive reclamation and environmental monitoring on an ongoing basis.
Going forward, we will implement a more comprehensive climate action plan that also outlines opportunities for electrification and energy efficiencies. This will help us achieve our emission reduction goal.
Meanwhile, New Afton has already added its first electric equipment to its underground mobile fleet. Our objectives continue to be very clear.
We want to create value, minimize environmental impacts, and do our part in achieving larger goal, global objectives of climate, water, tailings management and indigenous relations, all while to continue to prioritize the health and safety and well being of our people and the people in the community in which we operate in. Just so quickly and touch base on the COVID the update.
The company was the first really to bring the private testing to the Rainy River and Northwestern Ontario area and has worked with the Northwestern Health unit in its implementation. The onsite PCR testing provides results within three hour of testing.
Individual with positive results from our site PCR testing are directed to take a second administrative [Indiscernible] test -- unit, which confirmed a positive result with the separate test. These positive in case in-house cases have previously been referred to as a non-negative which was really a terminology in -- public health at the early days, so only public health results were officially considered positive.
However, going forward cases that were previously referred as non-negative will be referred as presumed positive cases and we will continue to be treated as such. As the majority of the positive cases really have been detected on site.
The contact tracing is also performed by the site team and through public health to isolate any infected individual and limit further exposure. There are currently only two active cases at the Rainy River mine.
All prior cases, including the 10 individual referred in our April 21 news release. All of them were confirmed as positive cases by the Northwestern public health have recovered following the applicable quarantine period.
And I'm also very pleased to report that there are currently no active cases of COVID-19 at the New Afton mine. Moving to slide 10, reinvesting in our future continue in the quarter.
The map shows all minority positions currently held by New Gold across Canada, including a significant 8% gold stream in the Blackwater Development mine owned by Artemis Gold. Recently the company added three new positions in Harte, Talisker and Angus.
Our 14.9% in Harte is really an opportunity to invest in a good grade underground mining Canada. It's a unique opportunity for New Gold given the team's strong skill set towards underground mines, including in that part of Canada.
We like the new management in place that's been recently joined the company's significant under explore land package, more than a million ounces of gold resources over 10 grams a tonne and the potential to expand to over 100,000 ounces productions a year. With regard to our 14.9% in Talisker, this is a significant land package in the neighborhood of the New Afton mine that we own in BC.
They are experience explorer, opportunity to leverage from an historic goldmine and prospective land package, and also potential for multi million ounces resources. With regards to our 9.9% in Angus which was really a small investment for New Gold.
This is a prospective land package in Noranda mining camp, experience explorer with the very strong track record of value creation in Canada. So we're very pleased with their landscape and the strategic and minority investment we've been capable to put together over the last quarter.
Moving to operational performance. I'm now on slide 11 for additional comment on Rainy River first quarter performance.
First, I would say that I'm extremely pleased with the overall performance while it was lower grade water which was a plan. We've seen again the mine and mill achieving another good quarter of productivity.
The open pit mine achieved nearly 151,000 tonnes per day in line with our '21 target of also 151 tonnes per day. And this compare really with roughly 127,700 tonnes per day and the same period last year.
The mill did extremely well as well achieving 26,300 tonnes per day. This compared with 18,400 tonnes a day last year.
It's significant improvement over the same period last year considering the winter conditions and so forth. I think that I'd like to point out and that really speak of our overall improvement year-over-year, in the same period last year, compared to the period for 2021.
The production achieved 10% improvement over the same period last year. And really despite the fact that the grade in Q1, 2021 was roughly 20% below last year period at the same time last year.
So a significant improvement 10% more productions over a 20% last grade. Same on the cash costs rose slightly below the same period last year, despite as I said a much lower grade despite a stronger Canadian Dollars.
So all of which when you really compare both the period of the Q1 last year and this year it speaks for itself, speaks of the significant improvement we've made that the asset has and we will continue to improve further down the road. The average grade of 0.8 grams a tonne was a low grade was -- it was planned as such our mine plan has previously discussed that consider lower grade in the first half of the year and the slightly higher strip ratio.
And as we move forward towards the second half of the year, we are expecting an increase for grade and increase of production and significant reductions in our costs and the mine remains on track to achieve its guidance. On Slide 12 at New Afton, there was a lower productivity as the mine continued to wrap up and achieve quite frankly pretty good productivities in the second half of the quarter following the mud-rush incident.
We had lower grade as planned as we continue to exhaust our current Lift 1 cave and a recovery level as we transition now eventually to the B3 cave and eventually down the road to the C-Zone cave. The preparation work on B3 continues over the quarter.
We're expecting our permit into Q2 and then after will initially the blockade the sequence with the B3 and continue to ramp up over the year. So more to come as we advance in the Q2.
Our C-Zone development and construction plan remains on track for a start of the season as planned. So both mines are really on track to achieve their guidance, we're very pleased as well with the first phase of exploration results at New Afton.
The first phase of drilling of nearly 10,500 meters showed us some pretty interesting interpretations on different patterns pretty similar to the New Afton deposit. And we're now engaged in the second phase where we're going to be drilling deeper to follow up on those trends.
We got some underground drilling program as well that has commenced like focused on the three priority targets, or more to come on this as well, as we have mentioned in the year. So really this is our completing the presentation portion of the call.
I will now turn the call back to the operator to -- for the Q&A portion. Operator?
Operator
[Operator Instructions] Your first question comes from Trevor Turnbull from Scotiabank.
TrevorTurnbull
Yes, thanks Renaud. I had a question I guess on the way your accounting for expenditures for Rainy River underground.
I read through it pretty quickly. So I might have missed it.
But it looked like you had something on the order of a $1 million in gross expenditures for the underground with the intrepid zone and so forth. But it seems like you've done more work than that.
And I'm just wondering is it the way you're accounting for it? Or am I missing something in the way you're going about the work at intrepid.
RenaudAdams
No, it's really all captured in gross capital. And I guess the booking and the timeline when the execution but it's all has a gross capital.
And as you previously disclose our guidance we are expecting between the -- within guidance on the gross capital. There was -- the very interesting part now that you mentioned beyond the $1 million of expenses is we're very pleased with the same result.
And I just take advantage of your question here just to clarify that our first level in ore has responded extremely well compared to our block model. And we see some even gain here on the total ounces.
And we'll continue to execute our plan. So as we move forward, you will see starting in the next quarter, the expenses will pick up and we're expecting to within our plan for the year and continue to develop there [Indiscernible]
TrevorTurnbull
And you talked about having I think 16,000 tonnes -- put able to add to a stockpile. Are you looking to process any of the material that you do develop this year?
Or is all this going to be stockpiled for sometime in the future?
RenaudAdams
It's really a stockpile but definitely this is something we eventually, we'll see how many tonnes I mean, you can imagine when you processed 27 average a day, the first quarter of 15,000 - 16,000 tonnes is not a lot to impact result, if this is where we're going. But the truth is, we're currently stockpiling and we'll see later in the year.
There are some precautions to be taken, as you can imagine. It comes with some metals and from the underground.
So we got to be sure we're well equipped has we decided to do initiate processing.
TrevorTurnbull
And obviously because of the higher grade it's going to be a bit of a shock in a way to the mill the way it's been operating. Is there some sort of plan maybe when the stockpiles built up a bit more to maybe actually batch process a bit just to see how it reacts in the mill or will you probably just blend it?
RenaudAdams
At this stage, we're actually continuing in on our study, as previously disclosed we're working on extension of, potential extension life of mine bringing more, we're looking at the milling aspects so far, our intentions will be eventually to blend. Would it be any opportunity to improve result by maybe batching?
We're not there yet. Our plan is the basic case is just to blend.
Operator
At this time, we have no further questions in the queue. I will turn the call back over to our presenters for closing remarks.
Ankit Shah
Thank you, Michelle. To all of you who have joined us today.
Thank you again. As always, should you have any additional questions, please do not hesitate to reach out to us by phone or email.
Have a great day. Thanks very much.
Operator
Thank you, everyone. This concludes today's conference call.
You may now disconnect.