Q1 2021 Equinox Gold Corp Earnings Call
Yeah.
[music].
Thank you for standing by this is the conference operator, welcome to the Equinox Gold first quarter 2021 financial results and corporate update conference call and webcast. As a reminder, all participants are in a listen only mode and the conference is being recorded.
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I would now like to hand, the comp inside of that you're riding Bailie, Vice President Investor Relations for Equinox Gold. Please go ahead.
Thank you Amanda and thank you everybody for joining us today. Some of you were just the thought that the AGM, which we wrapped up now of course, we're going to walk through the Q1 results and our corporate update we will of course be making a number of forward looking statements. Today. So please do take the time to visit our website and to visit our continuous disclosure documents that are available on SEDAR and Edgar I'm now.
I'm going to turn the call over to our chairman Ross Beaty for opening remarks.
Thank you very much relative.
Good afternoon, ladies and gentlemen, thank you for joining us today.
Instead, we just wrapped up our a gem of the very first slide I'm going to show you here in the interim presentation. That's on your website is the is there a wonderful board of directors all of the motions before the menu were passed and I of course appreciate all of the support we have from our shareholders.
All of the director nominees for voted in as well to serve on the board for it out of new year and I want to thank all of the board members, who you see here today for their service of the company obviously of the board runs of our governance.
Major strategy, we used to.
Almost all day yesterday and committee meetings, we had a board of dinner, where we talk strategy in the cyber security and the various issues like that that come up.
And I have to say every single board member made a significant contribution and we certainly are well well led on the front of it.
Shareholders should be very proud of the of the board as it is right here. So thanks for the board.
So.
As you all know you know this is the third year of really that we have done this and I like to kind of give a bit of the report card on what we've achieved in the three years, we've been in existence. Since we began read of the beginning of 2018.
And this is kind of says it all.
2018, we did the any operations at the start of the year, we decided to build the one line we had under development. We had a pre feasibility study on the couch the moat in line as well, which they did the way we spun out and sold some of our non core assets. We spent of Solaris copper to equinox shareholders and we.
For the Mesquite mine later in the year, which gave US production of 25000 ounces in 2018.
In 2019 of our mission to have increased the scale and diversification of production. We completed construction of ore zone at the start of pretty soon there. We had of full year from mesquite produced 200000 ounces of gold and at the end of the year, we announced that we were going to merge with Leer gold.
We also listed on the New York Stock Exchange and graduating to the tears ex in the tests that can be.
Another great year of growth.
And then 'twenty 'twenty, you're just past, we also had a quite extraordinary or we added for police the modems in the development project with the Leo Gold deal.
The increased trading liquidity from what was less than a million dollars of day to about $40 million of day on average.
And our liquidity and scale of attracted new institutional investors new institutional investors. We were added to the big indexes, we extended the Orange zone and Mesquite mine loves commenced production of Castle Mountain.
The sound of loose construction in Brazil.
At the end of the year, we announced the acquisition of Premier Gold.
But as well Solaris resources most of it on the T. S. Ex in 2020, we ended up with production of 477000 ounces not bad for three years of growth.
So what's the head.
They look at US today, here's what we look like.
We have seven producing mines for.
For growth projects those for being the sounds of loose.
Mine development in Brazil, and the loose expansion of loss the loss.
The expansion of Castle Mountain.
And finally underground work at Ouch.
The or zone as well as of course, the greenstone line in and.
Ontario.
We have.
Tripled our reserves, we were at $5 8 million ounces of reserves in December 2017 today, we have $16 1 million ounces.
Again, not bad that's our capital resource base don't forget that's what's what's gonna driver of continuing production in the future and and included in that we are including those reinsurers, we have $29 4 million ounces of the total gold resources reserves resources, which is really to be an extraordinary endowment for the future.
The future production.
We produced.
We produced a 470000 of LTE is as I said in 2020, and we're on target right now we're guiding for 630000 notice of this year and we are very much on the on the path.
The produce more than 1 million ounces in just the next couple of years.
We are we have a target of a 1200 maturity of dollars of notes for all in sustaining costs.
And the liquidity is quite incredible we've actually got nearly $1 billion of liquidity, when you combine or cash or credit facilities and our investments. So just an amazingly powerful financial base to add to this growing production base and there's tremendous stories of I think it's just in the middle of being executed.
So you know this this the these are some examples you know it's not just growth for growth's sake. What we're trying to do is also create real value and yes, we get real value through growth, but we also get real value through just good execution of its of its fairly simple business plan to provide investors fantastic leverage.
For the gold price and build a really significant.
[noise] significant in scale World Class company really N and our model right now is to build the the.
For the Premier Americas gold producer.
Mean premier in the biggest sense, we mean premier and not just started putting quality somebody of the work and are.
In the short time, we've been growing we have already built up of tremendous reputation for quality and that's what we wanted to have quality of an engineering and exploration in management generally financial management, but also in the environmental.
Management, and the environmental and governance and social matters, we wanted to be of complete company and really gives value in all of these things because each one of those boxes of value gives sales to our shareholders.
And we're gonna just the these three examples here are just examples of what we've already done the that can be kind of quantified we bought the mesquite mine in late 2018, we paid $158 million for it we've already produced 316000 ounces of gold and we've generated $139 million of free cash flow. We've also added 600 and so.
70000 ounces of gold and discoveries. So we've extended the mine life, we're going to you know we're going to really have the.
The fundamental value there that's been created.
We then built the Arizona mining this was the mine that hadn't had actually gone bankrupt the support.
With the prior operators well the cautious about $160 million to build we've already generated 175 million and free cash flow from this asset while at the same time, producing 238000 ounces of gold and discovering another 820000 ounces.
Also got the underground preliminary feasibility study in progress because we think we're actually going to extend this by the life literally by the decades.
That's real value creation.
Another example is in Solaris, we spun out so nervous back in 2018 of our shareholders for about a $33 million value of equinox kept the 40 per cent that we spun out of 60% of all of our shareholders well you know under the Sterling Malnourishment of Richard work and his team.
The state who've taken off taken all the matters from the sellers you know they've developed the wearer into deposit of Ecuador into a really world class discovery and in the corporate development. So even though we're sort of gold for all our shareholders are benefiting from that in two ways from the share as they got on the standard and from the the now of 30% or so or no. It's it's it's being dilutive because.
We read of 66 million U S. On the sale of the personal interest just of a month or so ago, and we still have $200 million of value from that asset. So that's real wealth creation through a to me, it's almost like financial engineering, where we did the spin out but we so we didn't have any additional costs or exposure or liabilities.
But we've had this wonderful windfall of value. Thanks to the successful efforts of the virtue works team and the Solaris.
And we've got a whole of abundance of opportunities yet to deliver in terms of wealth creation sounds of Louis that's going to come at the end of this year Castle Mountain. That's a couple of years out Las villas, that's in progress horizontal underground very much in progress as well and I 80, which is this new company that was spun out from premier.
Which equinox gold owns 30 per cent of and it's doing great things in Nevada under the leadership of viewing Dowdy, we expect good things to come from that great returns for the equinox shareholders as well.
We're very very pleased with all of this real wealth creation that we've achieved that is so tangible in such a short period of our growth.
Well with all of that we've you know we've had a shareholder sort of share price performance, which is generally speaking the pretty good although we've had of a rather rough quarter in the last quarter with the the decline in gold. If you look however at our share price appreciation since we started the company at the end of 'twenty at the end of December 2017, you know we.
[noise] confirmed gold all of the indices and all of her peers and investors holding or equinox gold shares in August 2018, when we spun out of Soliris have also enjoyed this great trajectory of of that copper focused company.
So you know I think the last quarter.
We are in all of the indices now we are with the Etfs of course, it out of the gold price goes up there's natural buying coming from those as the gold price goes down there's natural selling and we've had some soft for some of that I think we've had some overhangs quite frankly from the premier deal, which just closed a few weeks ago.
And we I think have yet to prove to shareholders that we did this great groceries out in front of the has it has not yet been deliberate in other words, it's right in the middle of execution right now we're a bit of a show me story right now with even though we're producing over 600000 ounces of gold were making lots of money we've got of grid.
Balance sheet, we've got excellent exploration of upside we've got all of this stuff built in but I think the some cause some degree of investors are also saying you know what I'm just kind of I'm just going to wait until you know, we we actually at or in some of these of some of these projects my point would be.
If you you can wait if you want but the by the time, we've done it it's gonna be too late I mean, the stock is going to run we're going to get to a.
Great.
The price of the net asset value of the more multiples more of like our peers and this next page shows that on page on page eight you know and this is why we are building of major gold company why we're so focused on the growth because of the markets reward scale Tonight.
As you get bigger your multiple goes up it is wealth creation simply by getting bigger.
You have less risk of broader investor appetite overhead costs are lower on a per AUM spaces, you of a reduced cost of capital and more funds available for shareholder returns. So it's just good business to get big.
The other thing you do of course as you have even more leverage to the gold price and you and end with a big company of leverage in two ways you have leverage on the income statement with every ounce you produce if you've got $100 more per ounce for the gold price run that's real wealth creation of the bottom line for instant value.
So the to the gold price you also have about what I call balance sheet leverage with the gold reserves and resources. So right now we have 29 million ounces of gold resource and reserves and resources every time the gold price goes up you know every dollar of it goes up that's fundamentally on increasing and real value to our shareowners because those are going to be.
Long term returns to us and we have such a huge resource base now we can really think long term and build this long term store of value that I think are always creates value for shareholders.
I'm expecting the over the next year or two we will outperform the market because we now have this large scale, we have diversity the premier deal gave us a really nice stool for the fourth.
Legs of the stool, we have one lagging in Brazil, one leg of Mexico, where like in California, and the other way of this big like in Canada.
Of all of these catalyst rich of investment plans year on year of growth, we're going to produce 600 of over 600000. This year will be well over that next year well over that the fall of them in your we're going to both for a million ounces in the next two or three years and I can see go into one point of three one point for a million doses without too much.
Difficulty based on the low sales expansion the sound of loose expansion or the central as the mine development the.
Greenstone project in Ontario, and of course Castle Mountain and Andrew I understand most of the eventually Arizona as well we've got all of this built in growth, which is going to deliver fabulous returns to shareholders.
And all of this has been quite of B cell phone us with a strong balance sheet, we don't need to raise any more equity money at all.
So all of this begs the question in one of our gold gold had a kind of of rocky start to this year.
It came off its high from last August you know is the party over well I just.
To me, there's nothing that is different in the gold equation of the other was that existed a year ago, absolutely nothing there is a natural tendency for drugs to be to be you know they don't go straight up there's a natural up and down the bear market.
The spare rallies inside of inside Bull markets and vice versa. So I. Just think currently we are of any secular bull market that started in 2016 and it remains intact today, if anything I think it's even more powerful today than it was even a year ago. We've had all of the stimulus this explosion in sovereign debt databases.
All of global currencies negative interest rates still exist, we have even greater prospects for higher inflation and higher inflation always drives the gold price up the.
The U S. Dollar is beginning to crack and it should continue to weekend, that's always good for gold.
And of course, you have so little.
Global assets are held in gold and I think any change in this location is going to be very soon the British for the price of gold.
All of the supply side. There are bullish factors exploration funding is constrained reserve replacement and slow new gold mine development is slower and more difficult than ever just look at what's going on all over the world. The governments are getting more demanding.
Environmental activism, social activism is making more of difficulties for for mine development and it's just a tough tough for business takes a lot longer for gold mines to be developed.
And actually you saw that in 2019 of 'twenty 'twenty the global Goldman supply actually decrease so there's not just the demand of these powerful demand factors for higher gold prices. There's also all sorts of supply reasons why I think gold is going to continue to go higher so I expect gold will shoot.
Shoot to its previous high sometime later this year, maybe 2022, but the party is certainly not over if anything it's still going in a very solid the substantial weight and equinox gold will benefit from that.
Every single step of the way.
Not only are we building a great gold company in terms of production and sort of people and finances.
But part and parcel of every day.
Responsible company today be it the mining company or really any company is the company is look after their environment, the social aspects of their business and general governance.
First of the equality of those kind of principles I'm very proud to say that today, we published our first ESG report. We just published this morning, you can find it on our website Christian is going to talk a little bit more about it but I just I just wanted to tell you every one of our shareholders.
The interested parties on this call how very important the stuff is to me personally.
I feel you know you can have a successful mine if your workers are unhealthy if your workers don't have good safety records. If you if you kind of deliver good quality of employment two of them. If you can't look after.
The diversity of your workforce.
Gotta do the sort of stuff. If you can do that then you were more successful.
You can't have a successful money coming out of unless you look after your environment as much as possible. We all know the mining is tough on the environment generally speaking.
But it can be minimized and at the end of the mine life you can reclaim of mine.
And once required many mines such as for example, the council of the mine and in the in California, before we took the Ron and rebuilt as Redeveloped. It you know you can do of reclamation of these days, where you hardly even though there was of mine there in the first place. So this is the nature of mining today, it's not like it was done 20 years ago and today's.
Responsible miner is one that where you really try to minimize your impact as much as possible on the environment and then finally of course, you have to look out for your communities.
We strive very hard to look after our communities we've put a lot of effort into the there's a lot of money a lot of time.
We've got to work with your community of just after all the Theyre the ones who are creating your social license in creating your ability to work in and in the far flung places of the world. So it means a lot to us we spend a lot of effort on this we just spent half of yesterday with our all of them full board actually going through our environmental social and governance.
Our reported and and.
I think every one of our board members has signed on to this and every one of the management team as well, it's very important stuff and I look forward to a good dialogue with our shareholders about how well we're doing and some places where we could do better we certainly out of hiccup in the late last year at the most feel of smart with what I think was a legacy issue that.
Came out of the the legal and the in the prior of operators of that mine.
And and we've really tried to spend the time there to fix the problem for the long term. So you know of hopefully that won't happen again.
And hopefully we won't have that kind of situation of anywhere else. So with all of that I'm going to end. This preamble about the company and just finally finish off by saying how proud I am of what we're doing how Oh I'm very appreciative of item of our management team, our senior lenders and the write down to the people of the fed.
This work in the underground and at our open pit operations. Our administration teams our exploration team our whole team our ESG team and so on are whole 6000 strong management team that are building. This company for great results in the future for all stockholders and all interested parties all people who are affected by our operations.
And with that I think I'll turn the call over to Christian now to talk about our Q1 results and give you an update on the projects over the you Christian.
Great. Thanks, Ross and that's a good segue into our Q1 operating results from.
We'll start the health and safety on the page 12.
And I do want to recognize and congratulate Tom dog and the team in California with getting Castle Mountain built from the first phase with a zero or nil, a total recordable injury frequency rates and that's a heck of an achievement for a brand new minefields of well done to the team there and we ended up three LTI from the first quarter during our 4 million work hours.
A little bit higher than our average so obviously, we'll be working to bring that down over the year, but still a decent performance in one of and it's worth just noting we did have very heavy range as people know what range for the heavily in Arizona in the northeast of Brazil, and we had a one in 10000 you rain event for quite an event at the end of end of March there. There was you know regional flooding.
Of the rivers and freshwater lagoons and we've seen that there before when we were constructing the mine and it's a.
I think of the future of where there will be sort of ongoing event that we need to manage but I'm really pleased with the team and how they performed during that the tailings down the plant from the mine, where basically unaffected and manage through that rain and you know.
The team also stepped in to help the community when the water treatment plant struggled to perform during that period and we will be.
Making investments to continue to improve that infrastructure locally. So we're really pleased to see that reaction to things that do happen at mine sites in the the environmental World.
And then in terms of COVID-19, I'm, you know I don't want to dwell on this one I think we've seen a drop in cases across all of the countries we've been in being.
Being Brazil, Mexico, and the U S and even though Brazil of obviously been of hotspots from the news over the last little while we've seen the case loads drop very significantly around our mine sites and are even with the people at the mine sites. We got 18000 tests and we've done a lot of testing and I'm.
I'm really pleased to see the work force I really abide by some of our strict protocols around this.
It makes a big difference going to work in and feeling safe for this kind of environment sort of hope that we're starting to turn the corner with the vaccine rollout across the world and it isn't differing sort of levels.
The levels of rollout, but a very positive developments happening in all of these countries now.
In terms of the operating results, we produced 129000 ounces of little bit weaker than Q4 at the end of last year and we do expect the first couple of quarters. This year to be a little weaker than the average for the rest of the year when we expect the nice uptick.
The all in sustaining cost was 1400 and $80.
I do want to highlight that includes about $12 million and a net realizable value write down of inventory at loss of pillows and people are so if you were to take those two numbers out you'd be below for $200, an ounce of I think pretty much in line with consensus expectations. There for the quarter. We did guide towards the higher cost for the first half of this year.
When you turn on for the next slide you know to just the plethora of things that have happened in terms of Q1 and also of recent corporate highlights and a lot has happened even since quarter end.
You know a good positive drill results at depths in Arizona will be seeing sort of the the fruits of that one of that underground study comes out around Q3. This year. So looking forward to that the updated feasibility study for phase two came out of.
Standard lose construction of advancing very nicely and Doug will probably talk about that a little bit more in depth later.
The feel of optimization studies are ongoing and we hope to release that study are give or take around mid year.
And then corporately of lot of activity in quarter. One we closed the acquisition of Premier. We helped you and spin out of any gold and supported of in terms of investing in the company just like we did with Soliris.
Required the additional 10% in the greenstone project for just over $50 million.
Now we will have a 60% stake going forward. So really pleased to be the sort of the major partner in that alongside of Orion.
We also sold the appeal of our mind for $38 million plus of royalty and an equity interest.
We commenced the last few low sperm of hall underground development, which obviously has been on hiatus or pause for the past year or so so I'm really pleased to be getting going there again and I think we're expecting for splash. This month. So that's underway and then as Ross said, we published the ESG report, which I'll comment on the second here.
In terms of the Q1, 'twenty, one 2021 financial highlights.
Slightly weaker quarters, I mentioned, adjusted EBITDA was about $60 million down slightly from maybe the.
Expectation for the most of that difference is related to the <unk> write down on those two inventory items that must feel of a sudden peel our net income as the healthy $50 million. Although it did include a large non cash gain on the change in fair value of the warrants and also the gold collars and swaps that we inherited from Lee of gold.
The gain on them as well.
In terms of the liquidity and capital position ended the quarter of $320 million almost in the bank of our net.
Debt was about $230 million, but if you were to take out the heavily in the money the convertible notes would be of net cash position.
Net liquidity as Ross said it at the end of April 200 million over $200 million of revolver available plus 350 million of cash.
This low net debt to EBITDA ratio and so the balance sheets and of great place right now and Ross alluded to the investments and a little bit more detail on them, we obviously own about 30% in gold, we invested $24 million Canadian and retained and maintained our position.
Really pleased with that and the launch of that into the market the market value of about 100 million you asked of us currently.
And also we sold the 10 million shares and Solaris for about 82 million Canadian and also some warrants as well that may turn into 50 million of of proceeds over the next 12 months, but the market value of the remaining interest. There overall is still $200 million you asked so we of $300 million of investments there.
Sure.
Turning over to the guidance and just a quick update there.
It looks a lot like we issued earlier in the year.
But we swapped in Mercedes in Mexico, which we acquired with Premier and we've taken out pillar, which obviously, we sold and closed on that right after quarter end. So.
The main change ultimately then as we've added in early works construction of about $40 million of greenstone, which is our 60% share they've already started clearing trees in ontario, or looking to do some equipment procurement.
Finish off detailed engineering get of cap set up build the water effluent treatment plant.
Wrap up the project team here that will be happening in the second half of this year.
You know that's the main change here as you see in the capital we've out of that $40 million, but overall from a production in the all in sustaining cost basis really there's very little change. It's just really a tale of two halves here for.
First half of the year, we have.
Slightly higher cost and lower production at Mesquite Castle in Las villas and in the second half of the year of we expect to see that reverse and see those mines hitting.
Hitting nicer more and better grades and Youll see lower costs and higher production of result of that.
And we'll.
We'll talk about those mines and a little bit more detail on the more detailed slide later on but really what we're looking for here is the second half of this year, you'll see a real uptick overall and we're just reiterating our guidance for the full year.
When you look at the ESG slide and as Ross said I go into a little bit more detail here really pleased and congratulations for the team for getting that out it's been a busy year since the legal the acquisition just gathering data and being able to increase our public disclosure.
Started with quarterly data that was available on the website for a couple of quarters ago. So that provided the baseline data now pleased to get out that first report.
And we've got our three initial ratings from the agencies, we've been presenting our plan too.
He.
Shareholders and investors that are really focused and interested in this area and really pleased with the feedback we're getting we've been very straightforward with what is this is a program in its infancy, but it's also that the ambitious goals of being a leader in ESG.
And we continue to advance our governance as Ross said, we've addressed some matters that were brought up from the shareholders' Gold Council letter over the last year, we really do focus on disclosing our pay practices, our kpis of year in advance. So you know what we're measuring ourselves against we have more diversity on the board and you see ESG as a bigger percentage of our compensation over.
For all of the senior management team. So I think we're making great strides there and we've also added a couple of members to the team here in Vancouver to strength in it.
So we've achieved our 2020 targets.
We outperformed some of our safety targets for last year, we've had multiple levels of testing and the focus on COVID-19 and I think we've done a good job in a challenging environment over the last year, we had lots of planning and training and really getting set up for the future of with over 500 hours of senior team dedicated strategy and planning GHT.
Our greenhouse gases has become a really important focus and we're gonna be setting a benchmark for that for this year.
And also in terms of adoption of standards and principles, we've adopted the TSM International Cyanide code responsible gold mining principles.
Join the mining Association of Canada, The World Gold Council of the mine mining safety round table. So.
<unk> been an active active year on the ESG front, and we said it is a priority.
Ending off last year and coming into this year and I think all of these results are actually bearing fruit and showing how seriously do take this.
And flipping over into the operational update here on slide number 18, I'm going to turn it over to Doug and let Doug Walkthrough of the next few slides okay. Thanks Christian.
No.
As Christian mentioned in the first half of the year, we do have lower production in California, and Mexico, and that's two of focus on waste, which ultimately will benefit our second half production.
Mesquite, especially had a significant stripping campaign.
That was to access higher grade oxide ore at the brown the Pip.
We also are doing ongoing exploration, which is focused on the mine life extension of mesquite and I'll talk about that later.
Let's keep produced just over 23000 ounces in the quarter.
The all in sustaining cost of $1952, an ounce of essentially a large part of that reflects the stripping campaign, there was $22 million of sustaining capital spent in the quarter.
Castle Mountain.
The we are doing investment in leach pad expansion when we've been doing the work that was for the phase II feasibility study that was announced in the quarter.
And we've now gone to transitioning towards entering the permitting for <unk>, which will happen later on this year.
Production was just under 3000 ounces.
And all in sustaining cost.
<unk> $1811 an ounce.
We will continue to optimize the <unk>.
Each pad and the flows to the Leach pad daily production of ounces has improved as we came into April.
Most fellows.
Are of significant investments in 2021 are focused on advancing the expansion projects, which access higher grade ore at Guadalupe, which we should be.
Well into or in Q3.
And also Burma Hall underground, which is more.
The development was restarted in April.
We will start the first blast in May.
The into the Orly later on this year.
We produced just under 30000 ounces loss of <unk> for the quarter at an all in sustaining cost of $2230 an ounce.
$6 million on sustaining capital we were ramping up operations. Following the December of restart so essentially.
Getting all of the flows in the pad and all of the regions.
Until the pad.
Dealing with waste movement and ultimately we also took a $9 million of inventory write down in the quarter.
At Mercedes.
This is the new one for US we have guidance of 30 to 35000 ounces for the year of non sustaining cost of 1140 to $1190 per ounce.
The mine is currently operating at.
200 tonnes a day campaign campaign milling in a mill that's designed for 2000 tonnes a day.
Does have an annualized production of about 50000 ounces per year and it has the opportunity to be able to increase <unk>.
Production towards the 80 to 90000 ounces a year for utilize the full plant capacity and do development into some of the higher grade zones that exist Mercedes.
So it was acquired April seven and of the guidance. Other mentioned reflects the remainder of the year production from Mercedes to our benefit.
Until the next page, we have a strong quarter horizontal and presenter benefiting from good mining performance and good plant performance of both operations as well as a strong forex in Brazil.
For Rosanna.
We moved more tons in the rainy season than we had originally planned from in a very good stockpile amassed as we entered into the rainy season. So the real.
Only work to our benefit.
We also have been advancing the potential underground excellent exploration effort done below the <unk> open pit and its moved into the pre feasibility study there'll be a reserve update that comes along with it and that will come out in the.
The second half of the year.
We produced.
Over 32000 ounces for the quarter and the all in sustaining cost was $879 an ounce and we had $5 2 million of sustaining capital of that Arizona.
For presenter.
A big focus continues to be a reserve replacement, it's always the reserve replacement story, but we've expanded our sites there we're doing regional exploration as well and the percent of Santa lose district of 70 kilometer long greenstone belt between the two operations.
And essentially we have an opportunity to be able to explore numerous targets that have been identified.
That could benefit either stand to lose or for center.
Production of presenter was over 17000 ounces in the quarter on the all in sustaining cost was $919 an ounce.
RDM had a major <unk> expansion ongoing so far this year and it will ultimately provide a lower strip access to the ore body very good performance on the mining and some really good process plant improvements have been done as well production.
Production was 15500 ounces at an all in sustaining cost of $1137, an ounce and again, we utilize stockpiles.
We were hit with a lot of rain, which is abnormal for RDM, that's usually short on water and the year and now <unk> has a full water dam, which means that we can see continuous production rate through this year and probably through most or all of next year without any additional range.
So very good results had already.
And pillar <unk>.
We sold it so we got 87 8765 ounces from <unk> up to for the quarter.
And on April 19th we announced that we were selling it for $30 million plus non MSR and an equity interest in PR gold acquiring entity.
So on page 20, we will look at the growth and development projects and Ross step through these earlier.
We have sad to lose its in construction.
To lose when it's operating will produce 110000 over 110000 ounces.
The only for the first five years.
The $9 of half year mine life of lots of exploration potential both on surface and with the underground opportunities.
I'll talk a bit more of the central Theres later.
<unk> expansion is focused on the various projects that will help achieve an overall 350000 ounce per year target for production.
And it will be through development of the.
Additional open pit at Guadalupe, which.
Which is currently ongoing.
And also bringing the Burma Hall underground mine on stream.
We have been finalizing the study for a for 8000 ton per day of carbon in Leach plant, which will process, the higher grade ore and thats too and in mid year.
At greenstone, it's a fully permitted construction ready project.
Very large.
Reserve base of $5 5 million ounces.
The additional two and $2 6 million ounces of measured and indicated resources.
The production for the first five years is 414000 ounces per year.
And the project of a 14 year mine life, we do see additional opportunities at that site as well.
Construction is targeted to commence in the second half of so I'll talk a bit more about that later.
Castle Mountain the.
Phase II.
The study came out in the first quarter.
218000 ounces a year.
That's on the base of the $4 2 million ounce.
Proven and probable reserve plus $1 5 million ounces of measured and indicated resources.
Total production over a 21 year mine life of three 4 million ounces.
As I mentioned earlier, the now moves over towards getting prepared for permitting.
So moving on to page 21.
Sad to lose full construction underway first gold pour is targeted for Q1 of 2022.
It has the past producing mines, so we benefit by having existing infrastructure and facilities in many parts of the process plant.
We are in the midst of retrofitting aspects of the process plant, but I'll ask you to look at the left hand side of the page of the upper slide shows the.
Resin and leach tanks that are in construction.
The new set of tanks and then on the lower slide.
As the secondary grinding area, where a new ball mills going into place so it's $103 million.
Initial capex.
We have we view it as being on time on budget. It will be done by the end of this year and then first gold pour in Q1 2022.
There was also excellent exploration potential on surface and it.
So moving on to page 22.
Greenstone is one of the most attractive development assets in Canada.
It's kind of great reserve of $5 5 million ounces very nice NPV of $1 $1 billion of $1400, an ounce of $1 eight of $2800 an ounce.
And I've mentioned the production for the first five years of 414000 ounces per year, we would get 60% of that being 60% owners.
A 14 year mine life, it will be the third largest gold mine in Canada when in production.
All in sustaining cost of $618 per ounce is very attractive for us and the.
This project benefits from an excellent infrastructure located adjacent to Geraldton and Ontario and on the Trans Canada Highway.
And it comes of the team that's been working on this project since 2000.
2013, so a very experienced team that is very aware of all aspects of this project.
And they are ready to go.
We're looking at the early works construction spend for par share being $40 million.
For this year.
We're looking at a construction decision for the second half.
As Christian mentioned Theres already a tree clearing happening at the site.
On page 23, just a few notes on exploration and the support of the operating mines.
Mesquite in October we had a news release the described the increase in reserves by 28% on the resources by 94%.
We have an additional exploration budget for 2021 looking at resource and reserve growth and that's focused on the Brownie Vista Eastern Rainbow deposits.
Keith.
We've already spent $2 6 billion in Q1, so it's a very fast and active program being executed on site and through the exploration team both the site and in Vancouver.
Horizontal.
Exploration results were put out in January describing the drill program done at the <unk> deep.
And also the near mine targets that all support the underground pre feasibility study that's underway and will be delivered in the second half.
A $4 million of exploration budget is slated for this year and its focused on continuing resource and reserve growth as well as developing.
<unk> mine and regional exploration targets on the large property, it's essentially it's the 1000 kilometers squared so lots of opportunities there.
And then for <unk> I mentioned earlier.
The 70 kilometer long greenstone belt.
It's quite under explored it's got local areas of Geo Kim geophysics, but it's kind of lots of targets from prospects about 1000 square kilometers.
Let's say of Bookended by presenter of incentive to lose and it provides us opportunity to feed either.
Other mines ultimately.
Yes.
So going on to page 24.
A couple of new exploration projects for us through the Premier acquisition.
And we also acquired the saga in rail Bonanza projects and the <unk>.
Red Lake area.
So it's a great address to be in the.
Toric mining district of Saga also has $1 1 million ounces of MNI.
Resources of.
Eight three grams per ton, but it also has 23000.
Gives me the 23000 meters that were drilled in 2020 the.
We are confirming of substantial underground potential so the.
Scott Heffernan the exploration team is doing a full review of that at the moment.
Looking at.
And how this potentially could be of mine one day.
Rail Bonanza is the JV with evolution.
Right on the Red Lake trend and it's essentially has a mine to the east and the west So it's a great address the half.
With that I'm going to hand, it back to Christian to kind of.
Thanks, Doug and Im just going to conclude it for a couple of slides here, but just finishing off on 'twenty for the two investments of <unk>, obviously very pleased with those in the value creation. So far of together, they're worth about $300 million and we still see lots of upside opportunity there and when you add in these new projects and Red Lake I'm going to dare to say that our goal here would be of half of $1 billion of value for them.
Sure.
And as we've seen the growth in Solaris, we're starting to see NIH and we really are pretty excited about the saga as well, we really see the upside opportunity here is excellent.
Looking at 25% and stepping back out to look at the portfolio the whole.
As Ralph highlighted we are now of nicely diversified of four legged stool of got two mines in the U S. Two in Mexico.
Large mine in Canada, what should be the third or fourth largest we've got two districts in Brazil plus on other mine. This is the portfolio of full of growth and opportunity in each one of these districts each one of alone in itself, but the one.
The weighted out of hundreds of thousands of ounces of production. So we've got the scale and diversification that we were shooting for and so really pleased to see that coming together.
When I look at the next slide here.
Stepping back out and how we're positioned for the three right hand graph here. We've highlighted this before we are working towards a million ounces of got the highest growth in the sector by far.
And we've got of 16 million ounce resource base the back that up so our multiple is low which is the left hand bar. It's just about <unk> 505, but I just wanted to when you think about it we need to earn our re rating here. We've got of 12 to 18 month program here over the next sort of.
The cycles here to earn our way and execute and earn our way up through developing projects getting our reserves and resources growing again, and we really do believe we're going to add to those and continuing some of that grassroots exploration.
And when you really step out for the next slide and look at those bubble chart here as we move to the right towards that million ounces of annual production. Our multiple is currently as I said between five and six and just just think of this move from <unk> five to one times, which is pretty common for some of our larger peers around 1 million ounces in the 3 billion Canadian market.
GAAP increase so we've got our sights set on really improving the market value of this company and we are shareholders and our target is actually delivering on this volume and doing it in a very responsible way.
And on the next slide just to give you a little more detail on the balance sheet I think of hit it a few times, so I won't dwell on it but it gives you a little more flavor of the cash is solid right now you've got $200 million available on the revolver and probably lots of flexibility of our balance sheet.
We havent increased our debt facility over the last couple of years in and our business is pretty much doubled.
Good operating cash flow and I'd tell you when we started during the quarter in quarter three of this year, you'll see that cash flow start to improve as well as long as gold price is hanging in there, which they seem to be finding a nice little base around $17 52, <unk> hundred and.
And we've got the $300 million in market value of investments of very strong balance sheet at the moment.
And then on slide 30, just the last page I want to comment on and give you the chance to ask the question.
As I said, we've got to execute on delivering this year on our operations, we've got to get our <unk>.
Projects and studies done make sure of constructions on time on budget and we're tracking really well so far this year explore we've really put explore back into our portfolio of growth.
<unk> got a budget and I think he is going to struggle to spend it.
He is not being held back so we're really pushing to extend the mine life of the shorter life of mines.
We think he is going to achieve that and then you look corporately, we've knocked off a whole bunch of these items this year and closing deals and optimizing the portfolio, we're supporting our investing companies and it's continually develop providing returns on investment and again M&A as the last point on this page because we have the emphasize that this year, we are focused on the inward growth.
And really just delivering and executing and so well.
We will keep our eye on the market, but we're not actively necessarily looking for M&A right now we've got our plate is pretty full with our current assets.
I just want to thank as Ross said earlier, thank all shareholders for for really backing us and our long term vision here and it's easy to be swayed quarter to quarter on making shorter term decisions, but we really do have a bigger price in mind.
We're willing to like we're experiencing in the first half of this year make the investments and go through periods of slightly lower production of higher cost of continuing to invest the capital because we actually see that huge price at the end of this and really appreciate the patience and the support of shareholders have told us to keep doing what we're doing and so with that I'll just end the formal part and open it up for questions.
Thank you Christian Thank you for later.
Can you please remind people of how to ask questions of do you want to say something Ralph other keeping up.
No I just wanted to just do exactly what you just did so.
Perfect go ahead, please operator.
Secondly, once again to join the question queue. You May Press Star then one on your telephone keypad, you will hear of tiny acknowledging your request.
Vikas.
Please be copy of handset before pressing any key.
To withdraw your question. Please press Star then Kate.
Participating through the webcast you can submit a question in writing by using the text box in the lower corner of your webcast frame, we will pause for a moment as callers join the queue.
Thank you for a while we're waiting for a phone call or as to the lineup I'm going to take a question from online.
We'll need about 300 million for Capex next year is that funded by operations and how much are you doing what gold price do you need to cover non sustaining capex.
Yes basically.
That amount would be funded by our operating cash flow, but obviously, we have a very strong balance sheet. In addition to that so.
Through both of those sources, we have more than available funds to fund that.
Okay and in terms of gold price I mean, it depends we still got some decisions to make on the timing of announcing construction and layering in our capital but.
Certainly feel pretty comfortable.
$500 per ounce gold and it can be a bit below but we've also got the ability to stagger. These construction projects over the next 345 years, which is really what the plan is because they sequence really nicely almost one after another.
Please go ahead and take some questions from the phone line.
Thank you.
First question comes from Mike Parkin from National Bank. Please go ahead.
Hi, guys. Thanks for taking my question.
One question on the stand to lose projects you do mention that it's tracking on schedule.
You give the budget there of $103 million.
I'll just give a comment there on the actual budget is it tracking in line with budget, we're hearing inflationary pressures on steel and some other items just wondering.
You can kind of confirm that that budget is still good or if youre seeing a little bit of pressure on them.
No.
Tracking our update was done late last year and as we came into this new year Rubin we've been.
Very on top of making sure that we.
We kept track of.
The cost for materials, and we've been able to deal with everything so we're doing very well and we've locked in a number of contracts. Obviously in the commitments are a lot of long way there.
So take a little bit of the advantage of the obviously the FX rate does help offset if there is any kind of sneak the creep there and inflation.
Right.
Greenstone in some of the plans of muscular Congress of Youre going to <unk>.
Involves from significant capital are you getting a sense that theres a bit of pressure on those budgets or the.
The the numbers you've kind of been speaking to you feel good.
Yes, I think I'll take that one just as a general comment please Doug jump in if there's anything I Miss but I think overall I think there is a little bit of inflation or call. It creep coming along probably nothing outside the ordinary so far.
But I do believe over the next few years, it'll be a little bit of inflationary pressure.
We will do things to as much as possible.
<unk> the Capex before we'll obviously launching the construction here right now we will try and lock in as much of the cost as possible and we will do our best to also protect the currencies as well there'll be a number of currencies that will be.
Feeding into the greenstone, obviously of Canadian dollars number one, but we've also got a few other currencies too.
Okay, and then just kind of brings needs for the last question in terms of the cash on hand is there any of that sitting in CAD.
Given that you're looking at starting a fairly significant spend there with greenstone.
Hi, Mike excuse me of high markets, Peter Hearn of here.
It is in fact, the funds that we've just received from the Solara shale or a sale of our own.
Canadian.
And we will continue to start to build the Canadian dollars stockpile as we move forward here.
Alright, very good that's it from me guys. Thanks very much.
Thanks, Mike.
Thank you. Your next question comes from Anita Soni from CIBC World markets. Please go ahead.
Good evening My question all the all of those apart from.
Hmm.
The more around hard rock spending on the <unk> provided guidance for the remainder of this year, but can you give us an idea of what next year will look like and I presume 2023 is part of it would start spending in terms of the quick.
Production of hospital.
Yes, I mean, it's probably a little bit early to give you too much specific guidance until we make that kind of a full decision and the <unk>.
Half of this year, because it could have a three to six month differential there but.
Roughly our percentage of the capital of 60% of $1 billion of $600 million.
I would say broadly speaking I think of it sort of half in 2022, and a half of 2023 and maybe it's a little bit back ended towards the later part of that but that's probably the best way to think of it right now until we make something for me.
Okay. So you would actually start construction on this from 2020 channel.
Yes, correct I mean, we would probably our goal is to launch into a form of construction in the second half of 2021.
Okay.
Then second question.
With regards to.
Some of you are.
With part with regards to.
Q1 <unk>.
As you look towards.
The project completion and think about the mine starting up.
How do we is.
As there are considerations in terms of.
COVID-19 with the strip.
Stripping and making sure the no basically has the <unk> feed.
For.
Hitting the ground running at the point at which of the military to GAAP.
Yeah, I mean, I'll take the first call in and out but Doug. Please jump in I mean, we are.
I think we May have just signed that were just about the sign a contract with the major mining contractor, who does support two of our other mines and is well placed and operating very effectively actually we had our best quarter ever last quarter at Arizona with the same contractor and we'd expect them to kind of ramp up and be ready to go and were also with us and obviously just down the road. So we do feel pretty comfortable in that.
Region, and I think we had a good performance on COVID-19, there and we've seen contractors ramping up as well.
It's been pretty good results, so far and I think being outside of the major cities has been of real advantage, obviously with the controlling the environment in the camp and the protocols.
Vaccines are rolling out and there's a large number of rolling out, but obviously the huge country. So.
It may just work out perfect in terms of timing.
Doug of State and then sorry go ahead.
Yes.
No we've had and we have standard protocols the reach one of our sites. So we continue using that in <unk>.
<unk>.
Is also quite close to for vendors. So it gets a lot of support from the presenter.
<unk>.
We would just continue on with our our protocols that we have I mean, we've done over I think it's over 15000 tests in 2000 14000 15000 tests now so it is very much part of.
Daily standard operating procedures.
I guess I was just thinking more in terms of getting contractors. If that's the case.
At the beginning just to help with the strip.
Stripping and overburden.
But any pressure on getting the kind of labor given all the concern.
Anita it's Peter already here generally speaking no when we do our planning for construction program.
<unk>, we actually plan right through to commercial production and then as we get closer towards the tail end of the construction period of of course, we look forward through the first year of commercial production. So everything we're doing now is and isn't in anticipation of having a successful startup of the protein.
And <unk> is mobilizing looking at Doug, but I think it's true.
Starting in May.
On the live in May of starting mining in June share adult through the remainder of the year, but we're not just doing it for the free production periods.
Carries on.
Okay and then my final question of what's sort of the while the glass.
Well, it's sort of a bigger picture of you look at the number of assets that you have and you've just recently sold per hour is there anything else at the moment.
Not a question of encore.
Of that you've got more hard rock and Mercedes in the fold.
I mean, I'll take that Ross unless you want to comment.
We will continue to look at our asset portfolio of mix and I think.
We've made it pretty clear we were potentially willing to look at creating some value from a few of the kind of smaller assets that we had in <unk>.
We'll continue to look at that very happy to see cargo because he's the small contributors of the overall profitability and it does take quite a bit of management time, and I think we'll we'll look at other assets in the portfolio.
Well, but I think it's a little bit early days to commit to any of any active sale.
Thank you very much.
Thanks, Matt.
Thank you. Your next question comes from Kerry Smith from Haywood Securities. Please go ahead.
Thanks, operator.
Could you remind me what the timing is on the pre feasibility for the underground at Orange Donna.
For Arizona.
Yes.
Probably like Q3, we say H two but Q3 is probably the end of Q3 and the Q3 yeah.
And then once that pre season done I'm presuming you wouldn't need of <unk> ability to make the go ahead decision on that how much of that project sit into the timetable in terms of that nationally and with the other projects that you have.
With the other projects or with.
Alright, thank Arizona.
Alright, I'm thinking of the sequence of how you might sequence that you've got hard rock you've got <unk>, you've got you've got a bunch of things going on I'm, just wondering how that might be sequencing schedule for could they be concurrent.
Oh, I think the scale of it it could be concurrent because it's the linear.
The project and doing the development on the first stage of of the underground.
So I think it would mentioned quite well.
Okay.
It will take time, obviously through both permitting and actually underground development and.
Scott has been working hard to add ounces at the surface as well.
Keep an eye out for that study, but we will keep adding both underground and open pit and I will just allow us that flexibility and time line and it'll run concurrently.
Okay Gotcha.
The the 9 million dollar range on that and took on.
Is that.
Or is that because youre not causing it and you don't expect to recover those ounces in the pad with half of initiatives. That's the case I'm just wondering what what's changed.
Terry It's Peter.
It's not the case.
There's two things really that contribute to the write down the.
The first thing is and it's just an accounting thing, but you have to keep in mind.
The ounces on the pad.
Or are there effectively at fair value, we acquired the mine and then it was effectively on care and maintenance from the time of acquisition through to the end of the year.
Alright heading into the beginning of the quarter you basically have the ounces at their fair value and then of course, we're doing some development and stripping work sustaining capital work at the mine.
Not stacking of ton.
Uh huh.
For the quarter.
And thats not the technical term.
But stacking activity was less than other.
Normal run quarter that also contributes to extra costs for the quarter, which led to the write down.
That's not our expectation go forward and during a normal quarter and not something we would otherwise see.
Alright gotcha, Okay. So could you could we see a reversal of that.
And in a subsequent quarter.
There is the potential for that yet.
Okay.
And then just.
Maybe Christian can answer this just on the COVID-19 situation of Brazil, I know of Brazil is obviously, having a tough time generally.
But are you able to sort of manage and control the incidence of COVID-19 because of your operations are.
Relatively remote the.
The.
The towns that debt your employees live in are also relatively remote which kind of helps the limit.
Since the COVID-19 because obviously these people go home to their communities every night or after the shift change and then the Theyre gone for a week or a day or whatever then they come back.
But you've done a good job of just wondering how that's how you'd be able to do that.
I'd be really straight up with you carry when you read the headlines it feels like a very different world in a way, but we've been able to keep of I'm going to say sticking my neck out of there a little bit but under the.
Single digits at each site at most and Thats the way down from where it was on call it a year ago.
And I think it's just the rigorous protocol, we've got various different shifts from people coming in and out that are more amenable to allowing testing in periods of call. It quarantine or anything beforehand were very quick to trace and have people isolate if we have any inkling or symptoms or <unk>.
For a positive tests and I think the local communities of really got on board with us too because of lot of our workers really make up a lot of that population of families. There.
Kudos to them.
Down there with Ross and others, not too long ago like mask wearing is very common.
Our distancing and protocols I think of a very strict and I've been really pleased with how they've really jumped on that.
Okay.
Okay and maybe.
Just the last question for Doug just on cash mountain in the quarter. Obviously, the production was quite a bit lower but the tends to the pad and the grades were pretty much in line with the with.
With Q4, I'm, just wondering what the what the issue was with the.
With the gold production.
Oh, it's teething problems on the heap Leach pad just figuring out the techniques to get the best solution percolation. So the guys of site or they're working on it and it takes time for the to try each thing in sequencing, which things are working best and per too.
Flow through of essentially two the results to see what's actually of working out well.
And are you kind of thinking of you figured out the debt.
Great Formula Here now you would talk and the disclosure of that gold production was.
Could the bedroom.
In March I think you said do you think.
Kind of sort of thing.
In April and April and April so they're figuring it out.
So it's coming.
Okay, Yeah, we've seen a doubling of our daily ounces in April, which I think we put in the disclosure very specifically.
Alright, Okay. Okay, great. That's all my questions. Thanks, a lot guys.
Thanks Kerry Thanks Kerry.
Another question for Doug or Scott when can we expect results from Europe event, the <unk> exploration and also from your Arizona Regional exploration.
Scott afternoon here would it be it for.
The reason the work's underway now.
Probably be looking into Q3, one of the challenges we faced.
And Dennis.
Orders in Brazil at the labs the.
The labs were locked down for.
For each of two months the are reopening now with limited capacity for this has definitely starting to pull of our results.
So.
The anticipated news.
Imminently, probably pushed to Q3.
With respect to for Resona.
The exploration of Arizona is just starting in earnest.
The overall exploration plan in Brazil, with the focus on by the firm.
First half of the year.
Which.
Includes us having to battle of the range.
Heard mention of.
The northern Arizona for the first half now with the turning point, we're starting to mobilize and move some of the rigs from buy to Arizona to start that work.
That those results will be back loaded in the year.
The.
The 21.
Okay.
With regard to the greenstone project, what factors are going to impact your decision to go ahead with construction in one of the likelihood of this project moving ahead.
I'll take that to start I mean.
We've been spending the last number of months getting up the speed on the project the capex the team et cetera.
I'm really pleased with what we've seen and they've done a heck of a lot of work over the last few years.
At the moment, we're just really getting up to speed with sort of.
All of Capex updates and getting key team members in place and getting some of the early works plans of schedule of sort of Debottleneck and I think we should be in a good place and I think we've been a pretty indicate pretty good indication that we're willing to spend $40 million and early works construction this year that.
All things being equal unless there's any major changes, we really do plan to be making of construction announcement in the second half of this year because the balance sheet is in a good place and.
It would be finishing off of that of losers. I think is an important milestone to kind of sort of say, we're moving forward now on the next project and so those kind of sequence nicely.
There may be a small amount of overlap, but we will have high level of confidence in San of lose being done sort of on time on budget by sometime in Q4, and this project should be ready to go by then for sure.
Thank you.
All in sustaining costs were quite high this quarter at some of the year projects. What are your plans to reduce those costs and make these mines profitable.
I mean, maybe I'll take that at a high level and Pete and Doug Please jump in.
We said in the first half of this year that we really would be stacking, let's say almost no or atmos skeet. So you're really just pulling off of those residual ounces that are up there and.
The opening up Brownie will really start to open up that ore source, they're starting to hit it in the next few weeks here, but really in Q3, you will see the impacts of that and there is of leach lag to it.
So we knew the investments worthwhile theres, some really good ounces in oxide right, there and lots of exploration upside in and around that area. So that will bring those costs down naturally you would take that denominator of ounces up and your costs will come down.
<unk>.
The Castle Mountain like I said doubling the ounces in April will automatically bring those costs down and as we just get more efficient with solution flow pad management and running the ADR plant to youre going to see those cost come down unless fuels is more complex.
It was a challenging year last year, we had those two hiatus as with the COVID-19 shutdown in Q2, and then obviously the blockade in queues for part of Q3 and Q4.
It's a big engine to get Rev back up and I think the team has done a great job in.
We're kind of well underway now and just freeing up the Burma Hall underground development was the last missing piece for that future high grade ore source and Guadalupe starting to see some better grades right now and I think come early Q3, you'll start to see the benefits of that in that great again, we'll show more ounces and instead of reprocessing ounces.
That are call it low grade right now, which we're doing to make up during this interim period, while we're investing.
We're allocating.
Getting out of fixed cost and overhead the essentially to the whole lot less ounces that were putting up on the powder of reprocessing on the pad. Once you start putting that primary or much better grades in the second half of this year youre going to see those costs come down too so.
I hate to have to say it but it's a little bit give us a couple of quarters here, we are sort of already getting partway through quarter, two and Q3, it should start getting pretty exciting around here I think and youll start to see that come down in <unk>.
This is the beauty of having a portfolio I mean, if you look across the Brazil assets. They just had a wonderful first quarter and actually finished off last year really well and that's the benefits of it gives us the confidence to invest in some assets and ultimately we will bring those costs down in those other ones are outperforming by hundreds of dollars an ounce and so all in all had a pretty decent performance.
I think also if I can step into the Christian it's.
It really shows the importance of looking longer chairman of just quarter by quarter.
Shareholders have to look at us is as the evolving the business where.
We have we are victims of our mine plan for victims of recovery changes in the natural variation in the ore body. In your example of investigators. The perfect example of that so of shareholders really want to be looking at one year or even the two year timeline in terms of growth and in terms of development and the variation you can't really look at.
The quarter because of lot of things change from quarter to quarter.
But as you said, we're going to have a progressively better year as the year goes on.
Hopefully the.
The corporate value will increase the accordingly.
Thank you Ross.
You talked about all of your ESG strategies and that youre going to be setting greenhouse gas emission targets for this year are you looking at options Green power sources of natural gas things like that at your properties.
I think the short answer is absolutely yes.
And I'm going to I'm going to name of Awesomeness that Ross as Chairman, who you obviously founded our green energy renewable source company.
It does put a slight different angle and every time, we look at the project or an opportunity in each of these countries. We look at those sources I mean, California.
Obviously solar power as an option renewable sort of <unk>.
Hydropower in Brazil is obviously an option.
We will look across the spectrum, particularly as we build projects, but also as these projects move on.
That alternative sources, because they are becoming a lot more competitive in terms of pricing and sourcing and an ability to access these types of sources as well so absolutely.
Thank you.
If gold continues to go higher as we all hope it well what could go wrong in your countries with things like La.
Legislation complication employed wanting higher wages securities how do you deal with those things.
Alright, thats it for one of the best ways to deal with the moves through having a diversified asset base. So if things go upside down the one place.
Yeah.
It's all set by the good things happening some of it happening somewhere else and it's very hard to predict the future of what can happen from country to country and that's why I take great strength, and having a diversified asset base, though of just in terms of the countries, but even in terms of the location specific assets. So with seven of operating mines right now.
And with the San Louis would become the eight we have we have the strength and diversity.
Right now I mean, Canada is in pretty good shape I think the California is in pretty good shape I don't really great rumblings of a big changes in the U S and sampling of the mining taxation.
Brazil's quiet the.
Countries that.
As has from time to kind of makes it a bit of noise recently about higher taxes as Mexico, but those of recently died down. So there is nothing on the real immediate horizon for us.
The way you know, there's lots of noise about Peru, and Chile right now we don't have operations there but.
The countries have to be very careful to to deal with their communication, making sure it's competitive because otherwise the company is simply move there the capital elsewhere in the.
Countries, often lose the benefit of of anything when they were the increased taxes the op risk.
We've less in tax revenue over the long term.
So lots of things really on the horizon right now, but we take great strength and have been the diverse set of diversified.
The diversified asset base.
Thank you Ross and other one of your favorite questions are there any plans for dividends for share buyback.
Do you want to take that Ross.
Yeah.
We talk about this every board meeting we can't wait until the day that we will pay a big dividend, but currently the focus is undertaken or capital and put it in the ground where it creates additional value for shareholders over the medium true.
Right now we have such a plethora of great investment opportunities that this will add to the capital the value of the company that should reflect itself in.
On the income gain and in the cash.
Capital gains, which will more than offset any.
Shareholder value of that comes from dividends. When we find we have surplus free cash flow will give it back to the shareholders as soon as we can in the kind of come soon enough.
Thank you.
I mean wants to know what our exit strategy is for our Solaris investment.
I'll take that one to Christian so what we've done right now is we've been very cooperative with Soliris and we.
They had an interest in the in.
And finding the block of stock we were able to provide that for them. We have no further plans to divest any more of our share for the for the foreseeable future.
We are very supportive of what Richard work in down the road and their team are doing in Solaris Theyre doing the marvelous job weird coming along for the ride and enjoying the the run.
The business model of Soliris is to explore and sell this is no. Other company that is planning to build the big copper mine in Ecuador, they're trying to do what Richard work is done so very well with other companies into the fold in the last 10 years, we will.
Finally, the large companies to take all of these assets.
Were in the mine or the rents of.
Copper deposit in Ecuador is of the grade and size that would be of interest of any major copper mining company on the planet.
So I fully expect.
Not too far away.
This year, maybe next year, but not in three years the.
He'll get an offer you can't refuse and he will head to the exit.
We will be more than happy to go to the exit of along with them.
And he knows that and we are we're going to we're going to hang on for the for the medium term, we expect and thats going to be happy ending for all shareholders not too far away.
Thank you Ross, we are well over time.
There's questions that we didn't get to my apologies, we will get back to you by phone or by email I'm going to hand, the call back now to Ross and Christian for closing remarks.
Well I only have one thing to say, which is the big. Thank you. Thank you to all of our shareholders and interested parties people who are on this line.
For your support we are of young very dynamic company, we've kind of wonderful run I think so far I hope you are feeling as proud of the Zion.
How are we of how we built.
Into real.
The World Class company in a very short amount of time and also I hope you recognize that it takes a lot of effort by a lot of people into the management team to get there. So it's my thanks to the shareholders is ultimately the big Thanks to our board of directors and management team for getting us there.
And I really look forward to reported view next year kind of the same time same place on what a wonderful year, we have in 2021 and what great promises we have in store for 2022. Thank you again.
Thank you. This creates the conference for today you May now disconnect. Your line. Thank you for participating and have a pleasant day.
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