New Gold Inc., a Canadian gold, copper, and silver mining company, reported impressive operational and financial performance in the second quarter of 2025. The results indicate significant improvements in production and cost management, record free cash flow generation, and substantial progress in key development projects, positioning the company to achieve its 2025 targets.

Operational Highlights: Production Improvement and Cost Management

New Gold demonstrated improved production and cost management in the second quarter of 2025, highlighted by record monthly production at the Rainy River mine and overperformance at New Afton B3. Consolidated gold production reached 78,595 ounces in Q2 2025, an increase from 68,598 ounces in the corresponding prior-year quarter. Copper production remained relatively stable at 13.5 million pounds in Q2 2025, similar to 13.6 million pounds in the prior-year quarter.

In terms of operating costs, operating expenses per gold ounce sold (co-product basis) decreased to $1,070 per ounce in Q2 2025, from $1,156 per ounce in the prior-year quarter. All-in sustaining costs (AISC) per gold ounce sold (by-product basis) slightly increased to $1,393 per ounce, from $1,381 per ounce in the prior-year quarter.

At the New Afton mine, gold production was 16,991 ounces, and copper production was 13.5 million pounds. Operating expenses per gold ounce sold decreased to $766 per ounce. Notably, all-in sustaining costs at the New Afton mine were negative, amounting to $(537) per ounce in the second quarter, reflecting the high value of copper as a by-product. At the Rainy River mine, gold production significantly increased to 61,604 ounces in Q2 2025, from 50,298 ounces in the prior-year quarter. Operating expenses per gold ounce sold decreased to $1,157 per ounce, and all-in sustaining costs decreased to $1,696 per ounce.

Financial Achievements: Record Free Cash Flow

New Gold generated a record $63 million in free cash flow during the second quarter of 2025, with $45 million of this free cash flow generated at the Rainy River mine. This marks a significant improvement from $20.4 million in free cash flow in the corresponding prior-year quarter. Cash generated from operations amounted to $162.9 million in Q2 2025, an increase from $100.4 million in the prior-year quarter.

Total revenue reached $308.4 million in Q2 2025, a significant increase from $218.2 million in the prior-year quarter. Net earnings were $68.3 million, or $0.09 per share, compared to $53.1 million, or $0.07 per share, in the prior-year quarter. Adjusted net earnings (non-GAAP) surged to $89.8 million, or $0.11 per share, compared to $17.0 million, or $0.02 per share, in the prior-year quarter.

Progress in Development and Exploration Projects

New Gold is demonstrating significant progress in its major development projects. At the New Afton mine, C-Zone cave construction progress is approximately 65% complete, and the undercut level was completed in May. This project is on schedule. At the Rainy River mine, the pit portal breakthrough occurred in early April, and fresh air commissioning and completion of the ventilation loop occurred in June. Exploration drilling programs are at record levels. At the New Afton mine, the exploration drift is complete, with seven rigs actively targeting the K-Zone, while at Rainy River, drilling is focused on the NW Trend and growing underground ore inventory.

Financial Stability and 2025 Outlook

New Gold concludes Q2 2025 with a strong liquidity position of $452 million, comprising $226 million in cash and cash equivalents and $226 million in undrawn credit facility. The company post-quarter redeemed its remaining July 2027 Senior Notes, enhancing its financial flexibility. Furthermore, the company has implemented a hedging strategy that includes approximately 75% hedging of FX of AISC and ~75% of fuel consumption hedged for Q3 2025.

The company is on track to deliver its full-year 2025 guidance, which includes: Gold production of 60-70 thousand ounces and copper production of 50-60 million pounds from the New Afton mine. Gold production of 265-295 thousand ounces from the Rainy River mine. The free cash flow outlook indicates a potential of approximately $2.2 billion cumulatively between 2025 and 2027 (assuming $3,000/oz gold and $4.00/lb copper), with an average annual free cash flow of approximately $720 million, or about $0.90 per share. The average annual free cash flow yield is expected to be approximately 20% in these years.

Summary: New Gold – Realizing Growth Potential in the Mining Industry

New Gold Inc. delivered a particularly strong second quarter in 2025, demonstrating its ability to improve both operational and financial performance. Record gold production at the Rainy River mine, record free cash flow generation, and progress in key development projects position the company strongly. Despite the inherent volatility of the mining industry, New Gold’s focused strategy on cost management, increased output, and liquidity improvement, combined with a strong balance sheet, indicates potential for continued significant shareholder value creation. The information in this article is provided for professional review purposes only and does not constitute investment advice.