Q3 2023 Equinox Gold Corp Earnings Call

Thank you for standing by this is the conference operator, welcome to the Equinox Gold third quarter 2023 results and corporate update.

As a reminder, all participants are in listen only mode and the conference is being recorded.

After the presentation, there will be an opportunity to ask questions.

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I would now like to turn the conference over to where Lynn Bailie, Vice President Investor Relations for Equinox Gold. Please go ahead.

Thank you Shari and thank you everybody for joining us this morning to discuss our Q3 results.

We will of course, you are making a number of forward looking statements. Today. So please do visit our website and our continuous disclosure documents on SEDAR and Edgar to learn more about the company I will now pass the conference over to our CEO and President Greg Smith.

Thanks for Lynn and good morning, and thanks, everyone for joining the call today.

On the line with me is our C O O Doug ready, our CFO, Peter Hardie, our EVP of exploration, Scott Heffernan and of course, our VP of Investor Relations ruin Bailey.

Again today, we're discussing equinox, Gold's 2023 third quarter financial and operating results and I will just start with a broad overview for the quarter and then turn the call over to Pete and Doug for more details.

So this was a record quarter record third quarter for the company in terms of gold sales and revenue.

Just over 148000 ounces of gold sold at a realized oil price of $19 17 per ounce cash.

Cash cost per ounce sold was 13 63 with all in sustaining cost per ounce sold of 16 O. Three I would note that these costs do include a write down of inventory at Las villas, which totaled approximately $7 $70 per ounce on a consolidated basis.

For the first nine months of the year, we sold 409000 ounces at a cash cost of $13 57 per ounce and all in sustaining costs of $15 95 per ounce. He's also take into account the inventory write down Atlas Ddos.

These results also reflect record sales for the company for the first nine months of the year and we remain on track to meet our 2023 production and cost guidance.

In September we had a site visit to our greenstone mine in Ontario that included our analysts our lenders and some of our shareholders.

Just a reminder, that greenstone is being developed as a joint venture in cooperation with our 40% joint venture partner Orion Mine finance.

Again, the site shows very well when it was a great opportunity for all the visitors to see the site and the progress in person.

All of our analysts attended so there are fairly recent analyst reports out there and you can get in touch with Brilinta, if you'd like to see any of them.

The full site tour deck is also available for download on our website and you can track progress in a greenstone photo gallery, which we update weekly.

Green Zone continues to progress very well as of September 30th we were 93 complete overall with construction, 92% complete.

And Doug will have more on greenstone, but the punchline is the project remains on budget and on schedule.

I wanted to take a quick minute now to talk about the convertible note financing we closed in September.

To remind everyone, we announced $150 million convertible note offering on September 18th.

Annual interest rate of 475%, a five year term and a conversion price of U S $6 30 per share with the over allotment being exercised we closed a total financing of $172 $5 million.

As many of you on the call would have noted the market did not react positively.

But we strongly believe in the merits of this financing the new notes have a lower interest rate a higher conversion price and a longer term than the existing convertible notes that mature in April 2024.

So we've secured better terms for the company and mitigated the risk of having to cash settle the April 2024 notes, if they mature out of the money.

And then in term in early October we did use the proceeds to partially pay down our revolving credit facility. This result in substantial interest savings to the company, while ensuring the funds are available to settle the maturing notes in April if needed.

That financing closing just prior to quarter end, we finished the quarter with an unrestricted cash balance of approximately $357 million.

Before I hand, the call over to Peter Hardie to run through our financial results I want to take a moment and thank Francois belmar for his contributions to the company as a director of Equinox since January of 2022.

Francois has actually been in the mix of equinox since several years before then.

At the same time I'd like to welcome fries to decay to the board of directors as the New Board appointee through Mubadala investment company.

So with that Pete I will turn it over to you to discuss our financial results. Thanks, Greg now on slide five of the presentation.

For Q3 for the 149000 ounces sold we received an average realized price of $19 17 per ounce generating 285 million in revenue.

We had 201 million of operating expenses in the quarter, which is an increase compared to the $193 million of operating expenses from Q2, and an increase compared to last year's quarter, which was 189 million. The increase was primarily due to the contribution of operating expense out of loose and higher operating expenses at Arizona RDM as a result of higher.

With RDM, achieving its highest quarterly gold production since Q4 of 2020 offset partially by lower operating expense of mesquite as a result of lower production.

On a per unit basis, our cash cost per ounce of $13 63 is consistent with the previous quarters of this year, our all in sustaining cost per ounce of Q3.

Is in line with Q1 and increased his plan from Q2, thanks to additional sustaining spend it or zone on deferred stripping and tailings facility work, which is a typical Q3 activity at that operation.

When compared to last year cash cost per ounce decreased in Q3 to 13 two.

<unk> 13, 63 pardon me from 13, 91, and all in sustaining cost per ounce decreased to 16 30 from $17 51.

One of the trends we've seen this year is an increase in leach pad inventories, we've seen a year to date increase of $130 million in those inventories related to an increase in ounces on the pads at mesquite and those few those for mesquite most of the increase occurred during Q3 Atlas via those the increase occurred in the first half of the year during Q3 <unk>.

Sound overall drawdown on pad ounces, Doug will speak to Pat Leach pad dynamics during his review of the operations.

We're seeing decreases in input costs in Brazil, and Mexico from Q2 of this year. There was an increase in your in the U S, though which was driven by higher fuel prices and.

In Mexico, and Brazil, some of the benefits of decreases in our.

Input costs unit input costs are offset by stronger performance in the local currencies against the USD.

Equinox manages its foreign exchange exposure with our corporate hedging program year to date. The company has realized gains of 26 million on its peso and real risk management. Those gains are recorded below the line in other income and are not included in our company's mine operating earnings or cash and all in sustaining cost matrix had those realized foreign exchange gains being include.

Good with mine operating earnings they don't they would've decreased cash and all in sustaining costs by $76, an ounce for Q3 and $63 an ounce on a year to date basis and those savings are attributable about 60% to low speed, those and 40% to the Brazilian operations.

Our EBITDA in Q3, 2023 was $65 million or $81 million on an adjusted basis. We had net income of 2 million for basic and fully diluted earnings.

Per share of one cent.

Included in net income is an income tax recovery of $8 million on.

On an adjusted basis, we had net income of 20 $29 million or nine cents a share the differences between net and adjusted income include 18 million for unrealized losses on foreign exchange contracts $11 million in unrealized losses recognized in deferred taxes and $6 million for unrealized gains on gold's contracts.

Cash flow from operations before changes in noncash working capital was 83 million or <unk> 26 cents, a share which is entirely in line with our Q2.

With respect to our remaining sustaining spend year to date, we spent $77 million and we expect to be a little under our guidance for the year by the end of the year of $136 million.

Moving to slide six in terms of liquidity and capital position, we ended the quarter with $357 million of unrestricted cash which includes the net proceeds of the convertible bond that Greg already discussed.

And yesterday, we closed a 75 million long term prepay arrangement with funds provided by sandbox royalties and Regal resource royalties in exchange for delivering 90000 ounces of gold over 15 years with monthly deliveries that the greater of 500 ounces, a month or 1.818% of greenstone gold production.

The gold deliveries can be satisfied with production from any of our minds and they start next month.

We will receive 20% of spot gold price for every ounce delivered and we have the option at any time to buy down as much as 75% of any undelivered gold ounces for spot gold, assuming a minimum price of 2000 per ounce.

With respect to with respect of greenstone. We are ahead on spend our guidance for the year was $277 million and we spent 270 million through Q3 with 90 million spent during Q3.

Based on construction progress to date, we believe construction spend will decelerate and our share of the remaining construction budget is about $80 million to $85 million, which is about $140 million on 100 on a 100% basis.

We expect to fund our remaining share of the spend through.

Uh huh.

Our cash at the end of the quarter, our operating cash flow and the proceeds of the 70 and 75 million long term prepay that we just closed.

Additionally, we have the 100 million accordion feature on our revolving credit facility that remains available and Undrawn and finally, we have other levers in our investment portfolio and ATM should they be needed and I will note. We have not drawn on the ATM since January with those sources of liquidity. We believe we are well funded to complete greenstone construction I'll turn things over now to Doug.

For a review of the operations.

Thanks, Pete we're on slide seven in the presentation.

At Mosquito during Q3, the mind switched from waste stripping to ore movement and stacked seven 6 million tons on the leach pad the strip ratio reduced from 2.0 in Q2, two six in Q3.

Those stacked ounces began to come under leach during the quarter. So now we're waiting for them to start coming off the pad in Q4.

Early in the quarter, they're actually in the end of Q2 and into start of Q3, there were issues with precipitation of our magnesium silicate and also low ph levels were caused by a retreat re leaching of some older areas of the pad both of those were addressed and resolved.

During the quarter. The site has also been working on a plan to mine the Ginger deposit, which is a new zone that next to the brownie pits. So we look forward to seeing how ginger can come into our mine plan going forward.

At Castle Mountain crushing and agglomeration throughput continues to improve when we were at 67% of the ore being crushed for its being stacked we continue to make up the difference was the run of mine ore, which does have a lower or slower percolation rate and a lower overall recovery.

We are working on additional modifications to the crusher.

That will hopefully what we'll end up with improving overall throughput.

Scaling the drip lines on the Leach pads.

Did occur at castle mountain in the quarter those have been addressed and resolved.

Las pillows or productivity improvement program in the open pits and the underground mines has been underway from Q1 onwards that program has seen a strong increase in the total tons being moved to year on year and a reduction in dilution from the underground and at the same time delivering more.

So overall to the pads, 80% of the ore is coming from loss Pillows, Burma Hall, and Guadalupe open pits and the underground ore is from the Las villas underground only.

On the Leach pad, we had delays in gold recovery as noted in Q1 and Q2, while we're starting to see those ounces draw down in Q3.

One of the areas was previously reported Pearl problem with broken Leach pad piping that was fixed and we believe all of those ounces have now come off the pad in the bedroom.

Yes.

We also had some areas with carbonate precipitation in an area, where the ph had gotten very high.

And that was in preparation for the rainy season, where there was a drawdown of the overall solution on the pad.

The area, where the carbonate precipitation has now been turned in is being released so that's been addressed.

And then the higher grade ore with copper content continues to be separated that receives a higher cyanide dosage and the long leach cycle time and for clarity this impacts less than 14% of the recoverable allowances that have been stacked year to date.

More recently the mine sustained no damage as a result of the hurricanes that devastated the coastal region around Acapulco or.

Our employees at Las payloads have initiated a voluntary donations campaign.

It's in an effort to support the affected families in Acapulco, and other impacted areas and equinox gold will be supporting this effort.

And on the next page.

In Brazil, all of our mines have had tailings storage facility construction, either recently completed or currently underway. So as Pete noted. This is the time of the year, where we do the big push on all of our tailings facilities.

<unk> facilities and that's reflected in our sustaining capital expenditures for each of these mines.

That Arizona Q3 production was higher than the prior quarter as they mine more tonnes and it had access to higher grades we continue mining with a second contractor.

On the site that's to help move more waste and help buildup and ore stockpile ore stockpile for the coming rainy season. Currently we are over 400000 tonnes on the stockpile.

We've largely caught up on waste movement with almost 8 million tons being moved in the quarter.

Brazil from presenter was mining from a combination of open pit and underground sources underground mining was up on both tonnes and grade in the quarter and the feed grades going into the plant.

Plus the plant throughput was above plan.

So a very good quarter a presenter.

Drilling was over 16000 meters in the quarter. This is in the underground and that brings our underground drilling to over 39000 meters year to date, that's focused on reserve replacement. That's been a successful program for the last half dozen years and it's looking to be the same for this year as well.

Exploration overall and the presenter sad to lose greenstone belt continues on several promising targets.

At RDM the mine achieved its highest quarterly gold production since Q4, 2020, primarily due to sending higher higher grade Institute or to the plan, you'll recall that much of the previous year.

We were supplementing feed to the plant and with low grade stockpiles. So we've been able to focus more on the <unk>.

The RDM team has been doing a great job in mining with the owner operated equipment and that's a combination of our trucks plus additional rental trucks.

RDM is also in the permitting process for our filter tailings storage facility that was submitted as of the start of the year. So we're looking for that to come through.

Sometime the end of the year or into <unk> into the new year, but it doesn't have an impact we have sufficient space to carry on in any case.

Operator: Thank you for standing by. This is the conference operator.

Operator: Welcome to the Equinox Gold third quarter 2023 results and corporate updates. As a reminder, all participants are in listen only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call you may signal an operator by pressing star then zero.

Santa lose continues to work on changes to overall.

Recoveries, they were running at 67% in the quarter.

We've been running just size, 70% in October so it's.

It's in the small changes that make a difference at San to lose.

I'll note that in the quarter the total organic carbon content of the plant feed was running higher than plan.

While we did have recoveries well into the mid seventy's when the lower lower total organic carbon levels were being fed in.

Operator: If you are participating through the webcast, you can submit a question writing by using the text box in the lower left corner of the webcast frame.

Our work continues on increasing overall recovery, increasing the throughput and being able to feed ore with higher total organic carbon into the plant.

Rhylin Bailie: I would now like to turn the conference over to Rhylin Bailie, Vice President and Vester Relations for Iconox Gold. Please go ahead. Thank you Sherees and thank you everybody for joining us this morning to discuss our queue three results. We will, of course, be making a number of forward-looking statements today. So please do visit our website and our continuous disclosure documents on CDR and I go to learn more about the company.

And one of the initiatives that we're currently working through engineering work and we've done a lot of test work on it already.

Is the impact of dis liming of carbon from the ore that's currently.

Being fed so we see that this will result in an overall enhancement to recovery and essentially it's removing the highest.

Gregory Smith: I will now pass the conference over to our CEO and President, Greg Smith. Thanks, Rhylin. Good morning and thanks everyone for joining the call today. On the line with me is our COO Doug Reddy, our CFO Peter Hardy, our EVP of Exploration Scott Heffernin and, of course, our VP of Investor Relations Rhylin Bailie. Again, today we're discussing Iconox Gold's 2023 third quarter financial and operating results and I'll just start with a broad overview for the quarter and then turn the call over to Pete and Doug for more details.

Carbon portion of the ore and the remaining mass therefore ends up with the improved overall recovery.

Moving onto greenstone on page nine.

Full scale construction of greenstone was announced in October of 2021.

And two years later or the project remains on budget and on track for H 120.

2020 for production.

Gregory Smith: So this was a record quarter or a record third quarter for the company in terms of gold sales and revenue with just over 148,000 ounces of gold sold at a realized gold price of 1917 per ounce. Cash cost per ounce sold was 1363 with all in sustaining cost per ounce sold of 1603. I would note that these costs do include a write-down of inventory at Los filos which totaled approximately $70 per ounce on a consolidated basis.

We are fortunate to have a very experienced and focused our diligence team at the site.

And this is a great photo showing the progress in the last two years in the foreground is the ore storage dome.

On the left hand side is the primary and secondary crushing building feeding into the HP G. R. A building that's nears near the center of the photograph behind the HP GR is the truck shop and warehouse building.

And on the right hand side is the mill building process plant building with the thickener in the foreground of the building and the leach tanks to one side.

Gregory Smith: For the first nine months of the year, we sold 409,000 ounces at a cash cost of 1357 per ounce and all in sustaining costs of 1595 per ounce. These also take into account the inventory write-down at Los filos. These results also reflect record sales for the company for the first nine months of the year and we remain on track to meet our 2023 production and cost guidance. In September, we had a site visit to our greenstone mine in Ontario.

In between the thickener and the ore storage dome is the.

On site power plant.

Of that.

The project had one LTI in the quarter and has had over 5 million hours worked so far.

Gregory Smith: That included our analysts, our lenders, and some of our shareholders. Just a reminder that greenstone is being developed as a joint venture in cooperation with our 40% joint venture partner Orion Mine Finance. Again, the site shows very well and it was a great opportunity for all the visitors to see the site and the progress in person. All of our analysts attended so there are fairly recent analyst reports out there and you can get in touch with Berlin if you'd like to see any of them.

We go on to page 10.

Progress at the site as of September 30th the overall project is 93% complete with construction at 92% complete.

Procurements, 90% complete and then mechanical piping and electrical those are the big focus the big focus at site as we reduce the personnel on site and in the fourth quarter. This is how it all because the construction team will start to ramp down as our ops team has been building up and work towards.

Gregory Smith: The full site tour deck is also available for download on our website and you can track progress in the greenstone photogallery which we update weekly. Greenstone continues to progress very well as of September 30th. We were 93 complete overall with construction 92% complete and Doug will have more on greenstone but the punch line is the project remains on budget and on schedule. I want to take a quick minute now to talk about the convertible note financing we closed in September.

Pre commissioning and commissioning.

The capital spend is at 89% complete.

On page 11.

Process plant is 91% complete both ball mills are mechanically complete confer installed built installation underway.

Crusher reclaim in HPT are substantially complete and the hydro hydro testing and leach tanks has been underway.

Gregory Smith: To remind everyone we announced a $150 million convertible note offering on September 18th with an annual interest rate of 4.75% of five-year term and a conversion price of US $6.30 per share. With the over-allotment being exercised, we closed a total financing of $172.5 million. As many of you on the call would have noted, the market did not react positively, but we strongly believe in the merits of this financing. The new notes have a lower interest rate, a higher conversion price, and a longer term than the existing convertible notes that mature in April 2024.

Our pre.

Gregory Smith: So we've secured better terms for the company and mitigated the risk of having to cash settle the April 2024 notes if they mature out of the money. In the interim and early October, we did use the proceeds to partially pay down our revolving credit facility. This results in substantial interest savings to the company while ensuring the funds are available to settle the maturing note in April if needed. With that financing closing just prior to quarter end, we finished the quarter with an unrestricted cash balance of approximately $357 million.

Pre commissioning activities are underway in several areas.

Process when the power plant is already complete and has been through commissioning its fully operational on the pipeline.

Is commissioned and operational and we've already been switching over to.

Powering portions of the plant during Q3 full transition happens in Q4.

The tailings facility is 94% complete south portion is complete to the final elevation $3 40 elevation.

Buttress work continues it'll be.

It is on schedule for completion and ready for use in Q4.

There's a list of additional infrastructure over to the right.

And I'm not going to read that through.

Suffice to say that the key areas that remain are the tailing storage facility and the process plant. We have already done the realignment of the highway 11th that was opened for traffic in 'twenty in August of this year.

And we've relocated the Ministry of Transportation Petroleum.

So going to page 12, looking at key milestones.

But as noted the highways open process plant is 90% complete and we've moved into pre commissioning so our operational readiness and commissioning teams are in place and very active on site.

Gregory Smith: Before I hand the call over to Peter Hardy to run through our financial results, I want to take a moment and thank Francois Belamar for his contributions to the company as a director of Equinox since January of 2022. But Francois has actually been in the mix of Equinox since several years before then.

In Q4, the big focus is the mechanical piping and electrical installation.

And then we move into wet commissioning on the process plant. The T. S. F. As noted we will be ready for use and preproduction mining ramps up we will have 800000 tonnes on the stockpile currently it's over 400000 tonnes on the stockpile.

Gregory Smith: At the same time, I'd like to welcome Fras Sidiqi to the board of directors as the new board appointee to move bottle out investment company.

Peter Hardie: So with that, Pete, I'll turn it over to you to discuss our financial results. Thanks Greg. Now in slide five of the presentation. For Q3 for the 149,000 ounces sold, we received an average realized price of 1917 per ounce, generating 285 million revenue. We had 201 million operating expenses in the quarter, which is increased compared to the $193 million of operating expenses from Q2. And it increased compared to last year's quarter, which was $189 million.

The mining fleet will be augmented in Q4 with an eight.

Six additional trucks, bringing our fleet to 14.

And then we will continue adding trucks to the point, where we're 22 trucks by Q3 of next year.

So each one 'twenty 'twenty four will see hot commissioning first gold pour mining at 145000 tons, a day and the buildup of the ore stockpile.

Peter Hardie: The increase is primarily due to the contribution of operating expenses at St. Louis and higher operating expenses at Arizona and RDM as a result of higher production. With RDM achieving its highest quarterly goal production since Q4 2020, offset partially by lower operating expenses of Mesquite as a result of lower production. On a per unit basis, our cash cost per ounce of 1363 is consistent with the previous quarters of this year. Our all-in-sustaining cost per ounce of Q3 is in line with Q1 and it increased this plan from Q2.

Looking at our other expansion projects Castle Mountain isn't permitting the application was submitted in March of 2022 in the meantime, we continue with our optimization work, we're doing additional met test work.

And we continue with front end engineering.

The Autozone and expansion, we'll see concurrent mining of piano underground along with peer the open pit and other nearby open pit such as tough as you launch any Papa.

Peter Hardie: Thanks to additional sustaining spend at Arizona on deferred stripping and tailing facility work, which is a typical Q3 activity at that operation. When compared to last year, cash cost per ounce decreased in Q3 to 213 pardon me from 1391 and all-in-sustaining cost per ounce decreased to 1630 from 1751. One of the trends we've seen this year is an increase in leach pad inventories. We've seen a year-to-date increase of $130 million in those inventories related to an increase in ounces on the pads at Mesquite and Los Filos.

The engineering work continues on supporting infrastructure for example, additional power that's required for vent fans and supporting the underground.

And the underground portal development will happen in 2024.

The ramp in drill stations in total.

So the ramp provides drill stations.

We will be doing test mining and it provides the basis for future production.

That loss below the CIL plant would add life and improve overall recovery.

Peter Hardie: For Mesquite, most of the increase occurred during Q3. At Los Filos, the increase occurred in the first half of the year. During Q3, at Los Filos, we saw an overall drawdown in pad ounces that go speak to pad, leach pad dynamics during his review of the operation. We're seeing decreases in input costs in Brazil and Mexico from Q2 of this year, there was an increase in U.S., though which was driven by higher fuel prices, and Mexico and Brazil, some of the benefits of decreases in input costs, unit input costs are offset by stronger performance in the local currencies against the USD.

We're looking for the conditions that are conducive to investing in the construction and the extension of the mine life. So.

So in the quarter, we have met with communities. We've started the dialogue and that would needs to involve all parties will need everyone to be involved so that we can all stakeholders to be involved so that we can put fellows on the path towards being able to invest in the CIL additional stripping can ultimately extending the mine life.

With that I'm going to hand, it back to Greg.

Yeah. Thanks, Doug.

Roland why don't we move on to Q&A.

Peter Hardie: Equinox manages its foreign exchange exposure with the corporate hedging program. You today, the company's realized gains of 26 million on its peso and rail risk management. Those gains are recorded below the line and other income and are not included in our company's mine operating earnings or cash in all in sustaining cost metrics. Had those realized foreign exchange gains being included with mine operating earnings, they would have decreased cash in all in sustaining costs by $76 an ounce for Q3 and $63 an ounce on a year-to-date basis.

Operator can you please remind people how to ask a question.

Certainly.

Once again to join the question queue. You May Press Star then one on your telephone keypad.

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Peter Hardie: And those savings are attributable about 60% to those speedos and 40% to the Brazilian operations. Our EBITDA on Q3 2023 was $65 million or $81 million on an adjusted basis. We had net income of $2 million for basic and fully diluted earnings per share of one cent. Included in net income is an income tax recovery of $8 million. On an adjusted basis, we had net income of $29 million or 9 cents a share.

We will pause for a moment as callers join the queue.

Sure. So I've got a couple of questions online and we will take one of those what we're waiting for people to queue up.

Question here.

The convertible notes now why not wait until the spring of 2024 note that's coming due.

Yeah.

Yeah.

I'll handle that one Roland so.

As.

As you noted in April 2024, we had $140 million convertible note that was maturing.

Peter Hardie: The differences between net and adjusted income include $18 million for unrealized losses on foreign exchange contracts, $11 million in unrealized losses, recognized in deferred taxes, and $6 million for unrealized gains on gold contracts. Cash flow from operations for changes in non-cash work in capital is $83 million or $26 cents a share which is entirely in line with our Q2. With respect to our remaining sustaining spend, year-to-date we spent $77 million and we expect to be a little under our guidance for the year by the end of the year of $136 million.

And you know the company has been involved in a large capital program for the last two years in building greenstone and we did not want to be in a position just as we're in the heat of commissioning and ramping up greenstone, where we had to make a 140 million dollar debt payment. So we've been pretty clear in the past that we wanted to get ahead of that.

Maturity effectively refinance that note.

And so we've been looking at a number of options to do that.

Why now why September.

Peter Hardie: Moving to slide six in terms of liquidity and capital position, we ended the corridor with $357 million of unrestricted cash which includes the net proceeds of the convertible bond that Greg already discussed. And yesterday we closed to $75 million long-term prepay arrangement with funds provided by sandbox royalties and resource royalties in exchange for delivering 90,000 ounces of gold over 15 years with monthly deliveries that the greater of 500 ounces a month or 1.8 percent of greenstone gold production.

A large part because the market was cooperating the terms were very attractive in the context of the note. There was maturing again much higher conversion price lower interest rates and of course, we get the extension of the term.

And we were able to do it.

In a in a market and market conditions that were favorable to the company at a period, where we were able to then park those funds on our revolving credit facility and saves fairly material amount of interest the delta and the interest between our revolver and the convertible note over the period of time between now and maturity to April 2024 notes.

Peter Hardie: The gold deliveries can be satisfied with production from any of our mines and they start next month. We will receive 20 percent of spot gold price for every ounce delivered and we have the option at any time to buy down as much as 75 percent of any gold ounces for spot gold assuming a minimum price of 2000 pounds. With respect to greenstone, we are ahead on spend. Our guidance for the year was $277 million and we've spent $200 million through Q3 with $90 million spent during Q3.

So from our perspective, we have to control her focus on the things. We can control, we don't know where the gold price is going to be where the market is going to be in April of 2024, and so to mitigate having to make that payment in cash if those notes matured out of the money. We wanted to get well ahead of that and that's why we we executed on those notes in September.

Operator can we go to the phone lines now please.

Certainly its our first question comes from Wayne Lam with RBC. Please go ahead.

Peter Hardie: Based on construction progress to date, we believe construction spend will decelerate and our share of the remaining construction budget is about $80 to $85 million which is about $140 million on a 100 percent basis. We expect to find our remaining share of the spend through our cash at the end of the quarter, our operating cash flow and the proceeds of the $75 million long-term prepay that we just closed. Additionally, we have the $100 million accordion feature on our revolving credit facility that remains available and undrawn. And finally, we have other levers in our investment portfolio and ATM should they be needed. And I will note, we have not drawn on the ATM since January.

Yeah. Thanks, good morning, everyone.

Wondering maybe at let's feel I was just wondering what the expected Leach cycle is now for those delayed ounces beyond that 60 days and I guess given that it's been a couple of quarters now should we be expecting a big catch up in ounces coming off pad in Q4.

Peter Hardie: With those sources of liquidity, we believe we are well funded to complete greenstone construction.

Okay.

So.

For example, the longest lead time.

Is is on the.

Hi, copper ores. So that's 120 day overall each cycle.

Yes, it's a longer a longer.

Fraud drawdown of those ounces will go through Q3, probably into Q4 for the for those ounces and.

Douglas Reddy: I'll turn things over now to Doug for a review of the operation. Thanks, Pete. We're on slide seven in the presentation. At Mesquite, during Q3, the mine switched from waste stripping to war movement and stacked 7.6 million tons on the leach pad. The stripper ratio reduced from 2.0 in Q2 to 0.6 in Q3. Those stack downsides began to come under leach during the quarter, so now we're waiting for them to start coming off the pad in Q4.

We had hoped that it would be quicker and we'd all come out in Q4, but it's likely going to drag into 2024.

Okay, great. Thanks, and then just maybe related to that it looks like the heap leach inventories.

<unk> built up by quite a bit this year.

What proportion of that number is related to las villas versus say mesquite and castle mountain and at what point in time would you have to consider taking a bigger write down on those inventories if they don't come off the pad like would that come with impairment testing at year end.

Douglas Reddy: Early in the quarter, they're actually in the end of Q2 and into start of Q3. There were issues with precipitation of a magnesium silicate and also low pH levels were caused by re-leaching of some older areas of the pad. Both of those were addressed and resolved.

Yeah, Wayne so about two thirds of the buildup is atmos ski and most of the buildup of mosquito occurred during Q3, which is which was frankly planned with the stacking activity.

Douglas Reddy: During the quarter, the site has also been working on a plan to mine the ginger deposit, which is a new zone that's next to the brownie pit, so we look forward to seeing how ginger can come into our mine plan going forward. At Castle Mountain, crushing an agglomeration throughput continues to improve. We were at 67 percent of the ore being crushed, forts being stacked. We continue to make up the difference with the run of mine ore, which does have a lower lower percolation rate and a lower overall recovery.

And our budgets for the year.

And I'll note that our Atlas via those during the year, we saw a net drawdown overall of the ounces. So the ounces that we had expected a little earlier in the year. We have started to see those come through during the year.

And.

And as Doug just mentioned, we hope of course that continues it's just taken longer than we expected.

One of the things to note of mosquitoes, we saw my opportunities to optimize our mine plan, a little bit which meant.

A bit more stripping to get more ore and that pushed us out a little bit. So we knew was a risk that some of the ounces would push into 2024, but.

Douglas Reddy: We are working on additional modifications to the crusher that we'll end up with improving overall throughput. Scaling and the drip lines on the leach pads did occur at Castle Mountain in the quarter, those have been addressed and resolved. At Los Filos, a productivity improvement program in the open pits and the underground mines has been underway from Q1 onwards. That program has seen a strong increase in the total tons being moved year on year and a reduction in dilution from the underground and at the same time delivering more ounces overall to the pads.

Do you see the large number of tons that we've managed to stack in Q3.

We were opportunistic and took the took that opportunity to optimize the mine plan.

I guess a final note on the mesquite.

Stacking is it's a it's typical of the operation where you're doing a big push backs followed by periods of stacking and then and then leaching and recovery.

Okay got it thanks, and then maybe just last one at greenstone.

Can you give us a sense of timing of spend through the completion of that project.

Douglas Reddy: 80 percent of the ore is coming from Los Filos, Burma Hall, and Guadalupe open pits, and the underground ore is from the Los Filos underground only. On the leach pad, we had delays in gold recovery as noted in Q1 and Q2, over starting to see those ounces draw down in Q3. One of the areas was previously reported for a problem with broken leach pad piping. That was fixed and we believe all of those ounces have come off the pad in that better room.

Into next year, and then how should we kind of think of Capex into Q4, given the spend this quarter seem to be quite elevated and that to date looks like it's pretty close to the full year guidance.

Sure Ryan this is Greg.

Greg speaking so yes to your point, we've spent about $270 million of the 207 of our 270 of the 277 million that we plan for the year.

For the most part this is a timing issue. The overall budget in aggregate is still valid what we're seeing at this stage is a fairly rapid deceleration in construction burn.

Douglas Reddy: We also had some areas with carbonate precipitation in an area where the pH had gotten very high and that was in preparation for the rainy season where there was a drawdown of the overall solution on the pad. The area with the carbonate precipitation has now been turned and is being re-leached so that's been addressed. Then the higher grade ore with copper content continues to be separated. That receives a higher cyanide dosage and a long leach cycle time. For clarity, this impacts less than 14 percent of the recoverable ounces that have been tacked here today.

And that is everything from from.

Obviously, the installation of equipment.

Equipment, but also just the number of people on site starting to drop fairly significantly most of the major work in terms of construction is coming to completion here, including the tailings facility, which we said Q4, but really we're weeks away from that being entirely complete so most of the big burden that we had.

Through through 2022, 2023 is now coming off pretty significantly there's about $140 million at 100% left to spend in total 60% of that related to us which would be about $85 million I think for the rest of.

Douglas Reddy: More recently, the mine sustained no damage as a result of the hurricane that devastated the coastal region around Acapoco. Our employees at Los Pilos have initiated a voluntary donations campaign. That's an effort to support the affected families in Acapoco and other impacted areas. Equinox Gold will be supporting this effort. On the next page in Brazil, all of our mines have had tailing storage facility construction, either recently completed or currently underway. So, as Pete noted, this is the time of the year where we do the big push on all of our tailings facilities.

2024.

We're gonna be in that sort of $30 million to $40 million range.

And then obviously, we're moving into two hot commissioning here in Q1 and I as quick as we can to.

<unk> gold production. So we're no change to the overall budget.

Things are moving quite quickly at greenstone and like I said, the overall burn is now coming off quite significantly and really the spending is starting to orient more toward just mining.

Yeah.

Douglas Reddy: And that's reflected in our sustaining capital expenditures for each of these mines. That Arizona Q3 production was higher than the prior quarter as they were on the site. That's to help move more waste and help build up an or stock or stock pile for the coming rainy season. Currently, we're over 400,000 tons on the stock pile. We've largely cut up on waste movement with almost 8 million tons being moved in the quarter.

Okay, great. Thanks, Thanks for taking my questions and best of luck in the months ahead.

Thanks, Brian.

The next question comes from Kerry Smith with Haywood Securities.

Please go ahead.

Thanks, Greg.

Greg does that 80 to 85 million your share of the remaining Capex does that actually include the working capital buildup.

In terms of.

Or like stockpiled ore in first fills at all that yeah, yeah, yes.

Okay. Okay, that's great and are you having any issues.

Douglas Reddy: Pazenda was mining from a combination of open pit and underground sources. Underground mining was up on both tons and grade in the quarter and the feed grades going into the plant. Plus, the plant throughput was above plant, so a very good quarter of Pazenda. Drilling was over 16,000 meters in the quarter. This is in the underground. That brings our underground drilling to over 39,000 meters a year to date. That's focused on reserve replacement. That's been a successful program for the last half a dozen years and it's looking to be the same for this year as well.

The operating side, because I know, you're adding equipment as we move into every quarter here going forward or are you, having any issues sourcing equipment from the suppliers or maybe any issues sourcing people as you build up your staffing levels or is all that kind of running in line with what you'd expected.

Yeah. So on the equipment side no because everything had been previously previously acquired so we haven't had any issues around that are certainly not at this stage in the game in terms of hiring theme things have accelerated quite significantly.

We're working toward having I think around 360 people on site by year end.

Douglas Reddy: Exploration overall in the Pazenda, Santa Luz, Greenstone Bell continues on several promising targets. At RDM, the mine achieved its highest quarterly goal production since Q4 2020. Primarily due to sending higher grade in situ or to the plant, you'll recall that much of the previous year, we were supplementing feed to the plant with low grade stockpiles, so we've been able to focus more on the insituor. The RDM team has been doing a great job in mining with owner-operated equipment and that's a combination of R-trucks plus additional rented trucks.

We're at about 300, now and that will continue to increase and I'm talking about the operating team, which will get us to sort of 550 at some point next year. The number of people on site in terms of construction is coming off as I said quite rapidly. We went from over 800 people just a few weeks ago.

That's now dropped to 500 and continuing to drop.

Okay and can you remind me what the peak.

Pete employee levels, what's your operations running 360 is about $5 50.

550.

Douglas Reddy: RDM is also in the permitting process for a filtered tailing storage facility that was submitted at the start of the year, so we're looking for that to come through sometime the end of the year or into the new year, but it doesn't have an impact. We have sufficient space to carry on in any case. Santa Luz continues to work on changes to overall recoveries. They were running at 67% in the quarter.

Okay.

Okay, and then just for mesquite with this buildup of inventory do you have even a directional.

Comment on the production in Q4 from Michigan that you would expect I mean, do you think it's going to be down 10% better than Q3, I'm just thinking about how we how we try and model. This.

Yeah, No I hear you Terry and it's.

We've actually stacked a lot more ounces and recoverable ounces in the year than we budgeted, but we did it a bit later as Doug mentioned, because we extended the stripping program.

Douglas Reddy: We've been running just 70% in October, so it's the small changes that make a difference at Santa Luz. I'll note that in the quarter, the total organic carbon content of the plant feed was running higher than plan, but we did have recoveries well into the mid-70s when the lower total organic carbon levels were being fed in. Our work continues on increasing overall recovery, increasing the throughput and being able to feed ore with higher total organic carbon into the plant.

And we've seen this in the past with mesquite, where where you know the recovery starts to incrementally increase and all of a sudden it starts to it starts to really increase and sort of reach the levels that we anticipated.

So it's one of these situations where were.

Totally comfortable reiterating our guidance, we're going to be within our guidance for the year, whether we're in the back end of that guidance or closer to the to the midpoint of that guidance.

Douglas Reddy: And one of the initiatives that we're currently working through engineering work, we've done a lot of test work on it already, is the impact of desalining of carbon from the ore that's currently being fed. So we see that this will result in an overall enhancement to recovery and essentially it's removing the highest carbon portion of the ore and the remaining mass therefore ends up with the improved overall recovery.

That could be a matter of a couple of weeks at mesquite just based on the recovery of those ounces. So.

We're starting in the same position as Hughie, we anticipate those ounces starting to accelerate significantly over the course of the quarter, which we've seen every year that we've been mining mosquito, but the exact timing right around that year end time will it could have some effect on the overall production for the year and obviously well.

Okay. Okay.

Remember, it's a large number of tonnes adult doesn't gum under leach at the same time, we had finished lease cycles on other areas as it was coming on and then you've got your normal Leach cycle pluses the very high pad. So the pad height means the percolation takes quite a while to work its way through so all of that combined and we've done lots of.

Douglas Reddy: Moving on to Greenstone on page 9 full scale construction of Greenstone was announced in October of 2021 and two years later the project remains on budget, an on track for H1 2024 production. We are fortunate to have a very experienced and focused diligent team at the site. And this is a great photo showing the progress in the last two years. In the foreground is the ore storage dome. On the left hand side is the primary and secondary crushing building feeding into the HPGR building that's near the center of the photograph.

Discussions and analysis on that it means that any day now.

When it starts out at me now.

Is it through Q4 carry the mesquite like it's a good story at Mesquite, we we had very positive reconciliation in the pit this year and so we you know we've had a lot more recoverable ounces available to mine put on the pad. We also are as Doug mentioned integrating this new ginger deposit working on mine plans that are going to extend mining at mosquito.

Douglas Reddy: Behind the HPGR is the truck shop and warehouse building and on the right hand side is the mill building, process plant building with the thickener in the foreground of the building and the leach tanks to one side. In between the thickener and the ore storage dome is the on-site power plant. The project had one LTI in the quarter and has had over five million hours worked so far. We've gone to page 10 of progress at the site as of September 30th.

Into 2026, so we're very happy with what's happening at mesquite the timing of recovery of these ounces again as we're talking about a difference of a couple of weeks right around that year and that could affect two.

2023 production, but still will be well within our guidance.

Okay. Okay, and then just one last question for Doug.

On Santa Lucia.

When you started the erosion.

Project, you were kind of thinking recoveries in the low end at this point is 70% maybe the best that we can ever hoped you expect for this project or how are you thinking about it now.

Douglas Reddy: The overall project is 93% complete with construction at 92% complete. Procurement is 90% complete and then mechanical piping and electrical those are the big focus, the big focus at site as we reduce the personnel on site in the fourth quarter. This is how the construction team will start to ramp down as our ops team has been building up and we're in towards pre-commissioning and commissioning. The capital spent is at 89% complete.

We have.

I mean, obviously the team at site is very very.

Optimistic on the additional modifications that theyre doing we have to do it in a stepwise fashion. So we can understand what what works and what doesn't.

<unk> the big one that should.

Have a step change for us on recovery and we're doing the engineering at the moment and we look to be able to implement that in 2024.

We're at around the mid seventies around 75% as being.

Douglas Reddy: On page 11, process plant is 91% complete. Both ball mills are mechanical complete. Conferres installed built installation underway. Crusher reclaim and HPGR substantially complete and the hydro testing and leach tanks has been underway. Our pre-commissioning activities are underway in several areas. Process the power plant is already complete and it has been through commissioning. It's fully operational. The pipeline is commissioning and operational and we've been switching over to powering portions of the plant during Q3.

A realistic target that we should be able to push up too.

But it's incremental and.

What I will say is 84% the original.

The.

Target is not feasible.

We will acknowledge that scaling up from.

Bench scale pilot plant to industrial scale.

Who just did not follow through on the overall recovery, but we can see getting to the mid mid Seventy's and.

Lending has been a big.

Item for us and obviously the opportunity to be.

Being able to bring in and blend down the T. O. C is another thing we're looking at long term, but that takes quite a while to be able to to develop other areas that we might be able to blend with the order to be able to.

Douglas Reddy: Full transition happens in Q4. The tailings facility is 94% complete, south portion is complete to the final elevation, 340 elevation and buttress work continues. It is on schedule for completion and ready for use in Q4. There's a list of additional infrastructure over to the right and I'm not going to read that through. The suffice to say the key areas in the remain are the tailings storage facility and the process plant. We've already done the realignment of the high well 11 that was open for traffic in 20 in August of this year and we've relocated the ministry of transportation petroleum.

Bring down the total.

Total organic.

The TLC levels in Nevada.

Yeah, Andrew and Carrie will have we expect to have more on the addition of that declining circuit, how that'll of when we can expect that stepwise change in recovery.

Thanks to that circuit as part of our year end call next time, we chat.

On results, and which will probably involve guidance as well.

And it is the.

Is it the dish lining that you think could get you to the mid seventies recovery rooms or is it.

Douglas Reddy: So going to page 12 looking at key milestones as noted the highways open process plant is 90% complete and we've moved into pre-commissioning so operational readiness and commissioning teams are in place and very active on site. In Q4 the big focus is the mechanical piping and electrical installation and then we move into wet commissioning on the process plant. The TSF has noted we'll be ready for use and pre-production and mining ramps up.

And then there are some other step change opportunities that you would have to look at but there has to be done in sequence is what youre, suggesting.

Exactly yeah. So I mean, basically do slamming would bring us up to probably around 73% and then continued work on a couple of other areas.

Give us another couple of percent, so, hence why I'm, saying around 75%.

Okay. Okay. Okay. That's great. Thanks, so much.

So it's going to stay focused on 73 for now, but I think long term, we're going to continue working on it. So it's a long term target.

Douglas Reddy: We'll have 800,000 tons on the stockpile currently it's over 400,000 tons on the stockpile. The mining fleet will be augmented in Q4 with an eight six additional trucks bringing our fleet to 14 and then we'll continue adding trucks to the point where 22 trucks buy Q3 of next year. So each one 2024 we'll see high commissioning first goal for mining at 145,000 tons a day and the build up of the lower stockpile.

Okay, Yeah, thanks, very much Josh.

Quick question from my mind, what are you thinking for timing of the castle mountain impairment.

Yeah, that's a tough one.

We.

We submitted the permit in March 2022.

And we did have a fairly rapid engagement from the state and the county.

The BLM the federal authorities have been a little slower if you'd asked me sort of a year ago I would've said.

Douglas Reddy: Looking at our other expansion projects Castle Mountain isn't permitting the application was submitted in March of 2022 and the meantime we continue with our optimization work we're doing additional met test work and we continue with friendly engineering. The Arizona expansion that we'll see concurrent mining of piaba underground along with piaba open pit and other nearby open pits such as tatajuba and jenny papo. The engineering work continues on supporting infrastructure for example additional power that's required for vent fans and supporting the underground and the underground portal development will happen in 2024.

Should have that permit sometime near the end of 2024, I think it's more likely at this stage just given the progress.

I sort of later 2025.

Give or take so that's a hard question to answer specifically the permitting or the process is going well. There is no drama there is no significant issues, but it has been slower than we anticipated.

Okay.

And I guess with that in Q4.

Three people are already starting to think about next year. So I've got about five questions about sustaining capital spend next year in cost next year in Green Dot cards do you just want to remind people about one guidance is going to come out yeah, we'll we'll be issuing our 2024 guidance in <unk> in connection with our year end results, which will be sometime in February maybe in late February which is typically when we.

Douglas Reddy: The ramp and drill stations and will have the ramp provides drill stations and we will be doing test mining and it provides the basis for future production. Add lost filos the CIL plant would add life and improve overall recovery. We're looking for the conditions that are conducive to investing in the construction and the extension of the mine life. So in the quarter we have met with communities we've started the dialogue and that would need to involve all parties will need everyone to be involved so that we can all stakeholders to be involved so we can put filos on the path towards being able to invest in the CIL additional stripping and ultimately extending the mine life.

Do release, our guidance in the second half of February.

Okay, we'll take questions from the phone please.

And the next question comes from John squad, Nick What Steve Jordan.

Please go ahead.

Yes. Thanks for taking my question guys just looking at the.

The covenants for the revolver and the credit facility, there and it looks like the coverage ratio was $4 one in Q3.

Just wondering if you see this remaining tightened before it obviously depends on the gold prices and production, but just kind of wondering how youre thinking about it internally in managing that.

Gregory Smith: With that I'm going to hand it back to Greg. Yeah, thanks Doug.

Yeah, as we mentioned on previous calls we worked with our lenders to loosen covenants during the construction phase of greenstone.

Rhylin Bailie: Rhylin, why don't we move on to Q&A? Sure.

Operator: Operator, can you please remind people how to ask a question? Certainly. Once again, to join the question, Q, you may press star, then one, on your telephone keypad, you will hear a tone acknowledging your request. If you were using a speaker phone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two. If you are participating through the webcast, you can submit a question writing by using the text box in the lower left corner of the webcast frame. We will pause for a moment as callers join the Q.

We do expect them to remain tight until construction is complete.

But we're very comfortably onside with our covenants.

Okay.

Okay perfect Yeah, no I appreciate that.

Just in reference to.

Doug's comments on removing some of that higher hydrocarbon materials from Santa lose them.

What kind of grade is associated with that and just it just really isn't going to impact the head grade in any material way.

Uh huh.

Gregory Smith: Sure, so I've got a couple of questions online and we'll take one of those while we're waiting for people to queue up. First question here. Why did the convertible notes now? Why not wait until the spring when the 2024 note was coming due? Yeah, I'll handle that one, Rhylin. So, as you noted, in April 2024, we had $140 million convertible note that was maturing. And, you know, the company has been involved in a large capital program for the last two years in building greenstone.

Okay.

So you're asking what the mass pull is of the carbon material.

Yeah, and really effect if that.

Change in in your planning, they're removing that the higher carbon material, if that's going to impact your planned head grade.

No so I mean.

Yes.

I'd have to double check I believe the mass pool that we're looking at is 10% to 20%.

Gregory Smith: And we did not want to be in a position just as we're in the heat of commissioning and ramping up greenstone where we had to make $140 million debt payment. So we've been pretty clear in the past that we wanted to get ahead of that maturity effectively refinance that note. And so, we've been looking at a number of options to do that. Why now? Why September? In a large part because the market was cooperating, the terms were very attractive in the context of the note that was maturing.

But the goal that's lost there is tied up intrinsically with the carbon so while we're moving as the most refractory as it were material and we're allowing the remaining mass to be able to be properly leached. So we've done tests.

Work on it worked quite well give us good bump.

Or.

It depends on the T O C of the material that goes in on how much of a bump you get so.

Gregory Smith: Again, much higher conversion price, lower interest rate, and of course you get the extension of the term. And we were able to do it in a market conditions that were favorable to the company at a period where we were able to then park those funds on a revolving credit facility and save fairly material amount of interest, the delta and the interest between our revolver and the convertible note over the period of time between now maturity of the April 2024 notes.

The grade although we're looking at is about one three grams.

It ends up getting lost but that's okay, because gold wasn't coming anyways. So.

And it gives us the bump on the remaining material.

Perfect that makes sense.

Yes, no definitely.

I know it's different when you are actually operating versus that work in a spreadsheet, but I appreciate that color.

No no.

I'll answer.

Gregory Smith: So from our perspective, we have to control or focus on the things we can control. We don't know where the gold price is going to be, where the market is going to be in April 2024. And so to mitigate having to make that payment and cash, if those notes matured out of the money, we wanted to get well ahead of that. And that's why we executed on those notes in September.

Sure.

No fair enough.

Just I mean, obviously balance sheet looks like it's in a good.

Unknown Executive: Perfect, thank you.

Good cheap for the cash to get through the rest of the greenstone belt, just curious how youre thinking about divestitures at this point at one point in the past or is a bit of a discussion on maybe divesting.

Divesting a smaller asset there just curious your thoughts at this point.

Operator: Opera, can we go to the phone lines now, please?

Wayne Lam: Certainly, the first question comes from Wayne Lamb with RBC. Please go ahead. Yeah, thanks more, everyone.

Yeah, I mean, we we've always said that were commercial and.

We've sold minds in the past all of assets in the past.

When it's made sense and when there's been a you know a reasonable offer on the table. So we're I'd say, we're always open minded I never want to comment on any specific mines I would say that it's a pretty challenging environment to try to sell assets. There's not a lot of especially if you are looking for cash theres not a lot of financing out there interest rates are high.

Douglas Reddy: So I'm wondering maybe at Los Filos, I just wonder what the expected leach cycle is now for those delayed ounces beyond the 60 days. I guess given that it's been a couple of quarters now, should we be expecting a big cat tip announces come up and add in Q4? So on, for example, the longest leach time is on the high copper ores, so that's 120 day overall leach cycle. Yes, it's a longer drawdown of those ounces, we'll go through Q3, probably into Q4 for those ounces and we had hope that it would be quicker and we'd all come out in Q4 but it's likely going to drag into 2024.

<unk> got a high gold price, but but.

You know with equity values depressed and high interest rates and just sort of tight conditions. It's just not the best time to try to sell assets, even even on some of our smaller operations, where we've really been focused is looking at mine plans, where we can sort of optimize our cash flow and optimize value.

So we do get comments on having some of these smaller assets but to.

To the extent that we can mine them for more value than we can sell them, which I think right now is absolutely. The case, that's going to be the focus.

Not to say, we wouldn't be commercial John but.

Gregory Smith: We'll be great thanks and then just maybe relate to that. It looks like the heap-leach inventories have built up by quite a bit this year. What proportion of that number is related to Los Filos versus, say, Mesquite and Castle Mountain and at what point in time would you have to consider taking a bigger write down on those inventories if they don't come off the pad? Like, would that come with impairment testing at year end?

This is just a tough environment to look at those types of transactions.

Yes, no I appreciate that and also I know a public forum questions on on M&A our Anthony.

Keep your question to get so I appreciate that color.

That's it for me so congrats on the great quarter. Thanks, guys.

Thanks, Sean.

The next question comes from Anita Soni with CIBC World markets.

Gregory Smith: Yeah, Wayne, so about two-thirds of the build up is at Mesquite and most of the build up at Mesquite occurred during Q3 which was frankly planned with the stacking activity and our budgets for the year and I'll note that at Los Filos during the year we saw a net drawdown overall of the ounces so the ounces that we had expected a little earlier in the year, we have started to see those come through during the year. And at Doug just mentioned, we hope that of course that continues.

Please go ahead.

Hi, good morning, Thanks for taking my questions. So the first one.

Eight Q laski loss operation. So just looking at the great they've come off in the open pit is that you know what you can expect going forward or is that just a temporary sequencing machine.

It's a sequencing issue we did pivot.

Hello, it's between two areas.

We.

<unk> had a delay in finalizing an archaeological.

Gregory Smith: It's just taken longer than we expected. One of the things to note of Mesquite is we saw an opportunity to optimize our mind plan a little bit which meant a bit more stripping to get more ore and that pushed us out a little bit. So we knew it was a risk that some of the ounces would push into 2024 but you see the large number of tons that we've managed to stack in Q3, we were opportunistic and took that opportunity to optimize the mind plan. Yeah, I guess a final note on the Mesquite stacking is typical of the operation where you do your big pushbacks followed by periods of stacking and then leaching and recovery.

Do you have one area, we've got the permit for for it but we need to sign off on the archeological review.

While Lupe.

And so we've pivoted to an error in Burma Hall.

And another in Las villas, which are lower a little bit lower grade required a bit more strip to get back into them. So we had to pivot.

Okay.

Year to date year to date in EDA, we actual overbid grades. If you those are you know.

A bit higher than they were last year.

So it's just that's just the sequencing within the year.

Okay.

And then.

Moving I guess philosophy will confuse me about the and maybe this is that the the cash flow from operations questions that I have is related to Alaska, but.

Gregory Smith: Oh, we got a thanks and then maybe just last one at Greenstone. Can you give us a sense of timing and spend through the completion of the project. Into next year and then how should we kind of think of CapEx into Q4 given the spend this quarter seem to be quite elevated and to date looks like it's pretty close to the full year guide. Sure way and this is a great speaking so yet to your point we've spent about 270 million of the 270 or 270 of the 277 million that we planned for the year.

In your last slide 17, you still reiterated this 55% of production of more than 85% of operating cash flow expected in each team.

85% still is that is that the case or is it you know the.

Breakdowns that you were taking that lots of people, it's like moving and the inventory buildup is that like affecting not a forecast and you just haven't updated that 85%.

Well the big the big push or the big driver of that is as you start to pull especially at mesquite you start to pull ounces obvious leach pads right. So you've already you've already spent the cash to get those ounces out there and now in terms of cash you pull those ounces off in the fourth quarter that really drives that cash flow number. So we haven't we haven't.

Gregory Smith: For the most part, this is a timing issue, the overall budget aggregate is still valid. What we're seeing at this stage is a fairly rapid deceleration in construction bird and that is everything from obviously the installation of equipment but also just a number of people on site is starting to drop fairly significantly. Most of the major work in terms of construction is coming to completion here including the tailing facility which you know we said Q4 but really were weeks away from that being entirely complete so.

Change that guidance I'm not going to find it on the call, but that's really where that number comes from you started you know you go through a big strip campaigns back a bunch of ounces, we saw that Steve and then you start to recover you'll ever covered them off the pad.

Okay, maybe we'll take this offline because on the first half year like around $200 million.

So 85% in the back half would be.

Gregory Smith: Most of the big burn that we had you know through through 2022 2023 is now coming off pretty significantly. There's about 140 million dollars at 100% left to spend you know in total 60% of that related to us that should be about 85 million. I think for the rest of 2024 you know we're going to be in that sort of 30 to 40 million dollar range and then obviously we're moving into to hot commission in here in Q1 and as quick as we can to to gold production.

A significant number.

Maybe it will last more follow up on that one and then.

Another question with regards to Oh, Dear Oh, sorry with Stan.

Police and I'm just in terms of you mentioned something about.

The sorry, it'll come it'll come through with the reserves. So is there any impact to reserves given given the you know the fact that youre, not delivering or expecting announced deliver.

The prior recovery rate than you had previously a Wellington Park.

Gregory Smith: So we're you know no change to the overall budget things are moving quite quickly at greenstone and like I said the overall burn is now coming off quite significantly and really the spending is starting to orient more toward just mining.

Okay.

We've been working that through and because we're still working on things such as the D sliming or we're not ready to concede any change at this point essentially.

We've also been looking at opportunities to blend down so hence why I talk about it's not just a matter of improving the recovery improving the throughput. It's also improving the ability to deal with the higher TLC ores. So we're meeting that head on.

Wayne Lam: Great. Thanks for taking my questions and best of luck in the month's head.

Kerry Smith: Next question comes from Kerry Smith with Haywood Securities. Please go ahead. Thanks, operator. Greg, does that 80 to 85 million year share of the remaining CapEx? Does that actually include the work in Capitol Buildup? In terms of or like stockpiled or in first spills and all that? Yeah, yeah. Yes. Okay, okay, that's great.

Okay and then just.

Pivoting back to philosophy loves so.

Play in the ounces.

Youre going to get some in Q4.

And I still right to think that perhaps your accounting cost set lofty loss will be higher than anticipated in Q4 or will they end up taking a lot of anarchy write down as well I'm just trying to get figure out where you guys are in 2023 costs.

Gregory Smith: And are you having any issues for the operating side because I know you're adding equipment as we move into every quarter here going forward? Are you having any issues sourcing equipment from the suppliers or maybe any issues sourcing people as you build up your staffing levels or is all that kind of running in line with what you expected? Yeah, so on the equipment side know because everything had been you know previously previously acquired.

Is it more like right now we're tracking to the bottom end of that guidance range will it trend up more towards the middle or should we be sticking to the bottom end of the guidance range after accounting for potential write down in Q4 as well.

Yeah, So anita its Peter I'll answer that question kind of twofold I'll address the cash costs. Good question.

So yes, we do expect to see an increase as those ounces are realized.

Gregory Smith: So we haven't had any issues around that or certainly not at this stage in the game. In terms of hiring, the things have accelerated quite significantly. We're working towards having I think around 360 people on site by year end. We're at about 300 now and that'll continue to increase. And I'm talking about the operating team which will get us to you know sort of 550 at some point next year. The number of people on site in terms of construction is coming off as I said quite rapidly. We went from you know over 800 people just a few weeks ago that's now dropped to sort of 500 and continuing to drop.

And then I'll just reiterated as well.

With respect to sustaining spend we have something to do in the quarter. So that's going to affect all in sustaining cost as well with the increased spend in Q4. So on both counts, we're expecting things to be higher in Q4, and as a result year to date for the whole year, then for the first three quarters year to date.

Alright.

But still it sorry, and I'll just finish but still in range.

Okay, Alright, I cut you off there. Thanks, that's it for my questions.

The next question comes from Mike Parkin with National Bank.

Gregory Smith: Okay and can you remind me what the peak work the peak employee levels are? What's the operations running if you're 360? About 550. That's about 550. Yeah.

Please go ahead.

Hi, guys. Thanks for my taking my questions most of them asked but.

With greenstone if your.

Gregory Smith: Okay okay and just for Mesquite with this build up of inventory do you have even a directional comment on the production in Q4 from Mesquite that you would expect? I mean do you think it's going to be you know 10% better than Q3? I'm just thinking about how we how we try and model this. Yeah and I hear you Terry and it's you know we've actually stacked a lot more ounces and recoverable ounces in the year than we budgeted but we did it a bit later as Doug mentioned because we extended the stripping program.

Are you tracking ahead of budget.

On the.

On the total tonnes mined in pit and could that and if so I guess I would explain it.

Some of the Capex spend versus maybe what you originally budgeted at the start of the year.

For tons mined note we're on track.

And then can you just speak to you mentioned, how many people you have hired at.

300.

Are you already making the transition to owner operated.

Gregory Smith: And we've seen this in the past with Mesquite where where you know the recovery starts to incrementally increase and all the sudden it starts to it starts to really increase and sort of reach the levels that we anticipate. And so it's one of these situations where we're we're totally comfortable reiterating our guidance. We're going to be within our guidance for the year whether we're in the back end of that guidance or closer to the to the midpoint of that guidance you know that's that could be a matter of a couple weeks at Mesquite just based on the recovery of those ounces so you know it we're we're sort of in the same position as you we anticipate those ounces starting to accelerate significantly over the course of the quarter which we've seen every year that we've been mining Mesquite but the exact timing right around that year and time will you know could have some effect on the overall production for the year it obviously will.

With say mining and or did you all were you always start owner operated.

Yes, well its owner.

Owner operated from day, one we started mining August I think it was a 2022 couple of months ahead of schedule.

Yeah.

Switch to 24 seven.

November or December of last year, So it's been owner mining all the way along.

Okay. Thanks, Tim.

And Mike Theres other aspects of the operation of the project that have been transitioned to owner operated all the in center ancillary buildings were transitioned and other aspects have been as we advance here through construction.

Okay excellent thanks, very much guys.

Alright.

Gregory Smith: I remember it's a large number of tons, it all doesn't go under leech at the same time, we had to finish leech cycles on other areas as it was coming on and then you got your normal leech cycle plus it's a very high pad, so the pad height means that the percolation takes quite a while to work its way through so all that combined and we've done lots of discussions and analysis on that, it means that any day now. That's it, three, two, four.

Today's questions online that I Havent got back to yet I will get back to you by email or Theres no further questions on the phone great do you have any wrap up comments.

No just once again, thanks, everyone for attending the call today, you know where to find US. If you need information you can reach out to relearn or myself. The website has again.

All the updates on greenstone, including the site tour deck and.

Thanks, again, and we'll talk to you in the near perfect. Thanks, everybody for joining US. This morning, operator, you can now conclude the call.

Gregory Smith: Kerry, the mosquito, it's a good story, a mosquito, we had very positive reconciliation in the pit this year and so we've had a lot more recoverable ounces available, the mine put on the pad. We also, as Doug mentioned, integrating this new ginger deposit, working on mine plans that are going to extend mining of mosquito into 2026. So we're very happy with what's happening in the ski, you know, the timing of recovery of these ounces again, it's, you know, we're talking about a difference of a couple weeks right around that year and it could affect 2023 production, but still will be well within our guys.

Thank you.

Today's conference call you may disconnect your lines.

Thank you for participating and have a pleasant day.

Okay.

[music].

Douglas Reddy: Okay, okay, and then just one last question for Doug's on Santa Cruz is, you know, I know when you started the resin project, you were kind of thinking recovery is in the Louis, but is 70% maybe the best that we can ever hope to expect for this project, or how are you thinking about it now. We have, I mean, obviously team at site is very, very optimistic on the additional modifications that they're doing.

Yes.

[music].

Douglas Reddy: We have to do it in stepwise fashion so we can understand what works and what doesn't. I'd say de-slimeing the big one that should have a step change for us on recovery and we're doing the engineering at the moment and we look to be able to implement that in 2024. We're in that at around the mid 70s, around 75% is being a realistic target that we should be able to push up to, but it's incremental.

Okay.

[music].

Douglas Reddy: And what I will say is 84% the original target is not doable. We will acknowledge that scaling up from bench scale to plant pilot plant to industrial scale. We just did not follow through on the overall recovery, but we can see getting to the mid 70s and blending has been a big item for us. And obviously the opportunity to be, be able to bring in and blend down the TOC is another thing we're looking at long term, but it takes quite a while to be able to develop other areas that we might be able to blend with the order to be able to bring down the total organic growth, the TOC levels in the plant.

Douglas Reddy: We expect to have more on the addition of that de-slimeing circuit when we can expect that stepwise change in recovery. Thanks to that circuit as part of our year end call next time we chat on results in which we'll probably involve guidance as well. Okay, and is the, is it the desaligning that you think could get you to the mid-70s recovery range? Or is it desal, so that, and then there are some other step, step change opportunities that you would have to look at, but they have to be done in sequences, what you're suggesting.

Douglas Reddy: Exactly. Yeah, so I mean, basically, desaligning would bring us up to for all their own 73% and then continued work on a couple of other areas, would give us another couple of percent. So hence why I'm staying around 75%. Okay. That's great. Thank you. It's going to stay focused on 73 for now, but I think long term we're going to continue working on it. So it's a long-term target. Okay. Yeah.

Unknown Executive: Thanks very much, guys.

Gregory Smith: But question from online. What are you thinking for timing of the Catholic mountain permit? Yeah. That's a tough one. You know, we submitted the permit in March 2022. And we did have fairly rapid engagement from the state and the county, the BLM, the federal authorities have been a little slower. If you'd asked me sort of a year ago, I would have said, you know, we should have that permit sometime near the end of 2024.

Gregory Smith: I think it's more likely at this stage, just given the progress, sort of later 2025, give or take. So that's a hard question to answer specifically. The permitting or the process is going well. There's no drama. There's no significant issues. But it has been slower than we anticipated.

Unknown Executive: Thanks.

Gregory Smith: And I guess with Q4 halfway through, people are already starting to think about next year. So I've got about five questions about sustaining capital spend next year and cost next year. Do you just want to remind people about when guidance is going to come out? Yeah. We'll be issuing our 2024 guidance in connection with our year end results, which will be sometime in February, which is typically when we do release our guidance in the second half of February. Thanks.

Operator: Okay.

John Sclodnick: We'll take questions from the phone, please.

Gregory Smith: Is the next question comes from John's, glad Nick, what stage are they in? She's go ahead. Yeah, thanks for taking my question, guys. Just looking at the the covenants for the revolver and the credit facility there and look like the coverage ratio was 4.1 in Q3. Just wondering if you see this remaining tight moving forward, obviously, depending on the gold price and production, but just kind of wondering how you're thinking about it internally and managing that.

Gregory Smith: Yeah, as we mentioned on previous calls, we worked with our lenders to loosen covenants during the construction phase of greenstone. We do expect them to remain tight until construction is complete, but we're very comfortably on side with our covenants.

Douglas Reddy: Okay. Perfect. Yeah. No, appreciate that. Just in reference to Doug's comments on removing some of that higher higher carbon material from phantilose. What kind of grade is associated with that and just just really is it's going to impact the head grade in any material way? So, you're asking what the mass pull is of the carbon material? Yeah, and really, if that change in your planning there, removing that the higher carbon material, if that's going to impact your plant head grade.

Douglas Reddy: No, so, I mean, I'd have to double check, I believe the mass pull that we're looking at is 10 to 20%, but the gold that's lost there is tied up intrinsically with the carbon. So, what we're removing is the most refractory as it were, material, and we're allowing the remaining mass to be able to be properly leached. So, we've done test work on it, worked quite well, gave us good bump, you know, depends on the POC of the material that goes in on how much of a bump you get. So, the grade that we're looking at is about 1.3 grams that ends up getting lost, but that's okay, because that gold wasn't coming anyways. And it gives us a bump on the remaining material.

Unknown Executive: Perfect, yeah, that makes sense. Yeah, no, definitely. I know it's different when you're actually operating versus working a spreadsheet, but appreciate that color.

Gregory Smith: Last one for me. No, fair enough. Just, I mean, obviously balance sheet looks like it's in good shape for the cash yet through the rest of the green film build. Just curious how you're thinking about divestitures at this point. At one point in the past, there's a bit of a discussion on maybe divesting a smaller asset there just curious to thought at this point. Yeah, I mean, we've always said that we're, you know, commercial and, you know, we've filled minds in the past, old assets in the past, when it's made sense, and when there's been a, you know, a reasonable offer on the table.

Gregory Smith: So we're, I'd say we're always open-minded. I never want to comment on, you know, any specific minds. I would say that it's a pretty challenging environment to try to sell assets. There's not a lot of, you know, especially if you're looking for cash. There's not a lot of financing out there. Interstrates are high. You know, you got a high gold price, but, but, you know, with equity values depressed and high interest rates and, and just sort of tight conditions.

Gregory Smith: It's just not the best time to try to sell assets. Even, even on some of our smaller operations, where we've really been focused is looking at mine plans, where we can sort of optimize our cash flow and optimize value. You know, so we do get comments on, on having some of these smaller assets. But, to the extent that we can mine them for more value than we can sell them, which I think right now is absolutely the case.

Gregory Smith: That's going to be the focus. Not, not to say we wouldn't be commercial, John, but, you know, this is just a tough environment to look at those types of transactions. Yeah, no, I appreciate that. And, and also I know public forum questions on, on MNA are every video's favorite question to get. So appreciate that color.

John Sclodnick: That's it for me. So congrats on the recorder. Thanks guys. Thanks, John.

Anita Soni: To the next question comes from Anita Soni with CIPC World Markets. Please go ahead. Hi, good morning. Thanks for taking my question. So the first one relates to Los Filos operation. So just looking at the grades, they've come off in the open pit.

Douglas Reddy: Is that, you know, what you can expect going forward or is that just a just a temporary sequencing issue? That's a sequencing issue. We did have it at Filos between two areas. We have a delay in in finalizing an archeological review of one area. We've got the permit for it, but we need to sign off on the archeological review at Guadalupe. And so we pivoted to an area in Burma Hall and another in Los Filos, which a little bit lower grade required a bit more strip to get back into them.

Douglas Reddy: So we had to pivot. Okay. I think you're today, you're today to need that we actual open pit grades at Filos are, you know, quite the higher than they were last year in aggregate. So it's just a sequencing within the year.

Anita Soni: Okay.

Peter Hardie: And then moving, I guess, I'm so also confused me a bit. The, and maybe just the cash flow from operations questions that I have is related to Los Filos, but in your last slide, I think it's 17. You still reiterated this 55% of production and more than 85% of operating cash flow expected in age to 85% still is that the case or is this, you know, the breakdowns that you're taking at Los Filos.

Peter Hardie: Like moving and the inventory build up. Is that like affecting that forecast? And you just haven't updated that 85%? Well, the big, the big push or the big driver of that is as you start to pull, especially a mosquito, you start to pull ounces off these leach pads, right? So you've already, you've already spent the cash to get those ounces up there. And now in terms of cash, you pull those ounces off in the fourth quarter.

Peter Hardie: That really drives that cash flow number. So we haven't, we haven't changed that guys. I'm not going to find it on the call, but that's really where that number comes from is started. You know, you go through a big strip campaign stack a bunch of ounces. We saw that at the ski and then you start to recover, you're ever covering off the pad.

Anita Soni: Okay.

Anita Soni: Maybe we'll take this offline because on the first half, you're like around 200 million. So 85% in the back half would be significant number.

Anita Soni: So maybe we'll fall off on that one.

Douglas Reddy: And then one another question with regards to the, sorry, with with sand to lose and just in terms of, you mentioned something about the, sorry, it'll come, it'll come through with the reserve. So, is there any impact reserve given given the, you know, the fact that you're not delivering or expecting now to deliver the prior recovery rate, then you're previously working for? We've been working that through and because we're still working on things such as the de-slime where we're not ready to concede any change at this point.

Douglas Reddy: Essentially, we've also been looking at opportunities to blend down. So hence why I talk about it's not just a matter of improving the recovery, improving the throughput. But it's also improving the ability to deal with the higher TSD or so we're meeting that head on.

Peter Hardie: Okay, and then just pivoting back to the loss field. So the delay in the ounces, you're going to get something Q4 is am I still right to think that perhaps your accounting costs that loss field will be higher than anticipated in Q4 or will they end up taking an RV right down as well. I'm just trying to get figure out where you guys are in 2023 costs. Is it more like, you know, right now?

Peter Hardie: Right now you're tracking to the bottom end of that of the guidance range. Will it print up more towards the middle or should we be sticking to the bottom end of the guidance range after accounting for potential right down Q4 as well. Yeah, so Anita, Peter, I'll answer that question kind of two fold. I'll address the cash cost. It'll be those good questions. So yes, we do expect to see an increase as those ounces are realized.

Peter Hardie: And then I'll just reiterate it as well with respect to sustaining spend, we have some to do in the quarters. So that's going to affect all in sustaining cost as well with the increased spend in Q4. So on both counts, we're expecting things to be higher in Q4 and as a result, year to day. Okay, you know, for the whole year, then for the first three quarters year today.

Peter Hardie: Okay, all right. But still, sorry, and I'll just finish, but still in range.

Anita Soni: Okay, sorry. Thanks for putting my questions.

Michael Parkin: The next question comes from Mike Parkin with National Bank. Please go ahead. Hi guys, thanks for my taking my questions. Most of them have been asked, but with greenstone, if you're. Are you tracking ahead of budget on the on the total tons minded of the pit and could that like, and if so, I guess I would explain. Some of the CapEx spend versus maybe what you're originally budgeted at the start of the year.

Michael Parkin: For tons of mine, no, we're on track. And then can you just speak to you mentioned how many people you have hired at about 300. Are you already making the transition to owner operated with say mining and or did you always start owner operated? Yes, it's owner operated from day one. We started mining August. I think it was of 2022. A couple months ahead of schedule. Yeah, and then we switched to 24 seven November or December of last year.

Michael Parkin: So it's been owner mining all the way along. And Mike, there's, there's other aspects of the operation or of the of the project that have been transitioned owner operated, all the incentive and salary buildings were transitioned and other aspects have been as we advance her through construction.

Unknown Executive: Okay, thanks so much, guys. All right. If there's questions online that I haven't got back to yet, we'll get back to you by email. There's no further questions on the phone. Great.

Gregory Smith: Do you have any wrap up comments? No, just once again, thanks everyone for attending the call today. You know where to find us. If you need information, you can reach out to Berlin or or myself. The website has again all the updates on greenstone, including the site tour deck. And you know, thanks again and we'll talk to you in a year. Perfect. Thanks everybody for joining us this morning. Opera, you can now conclude the call. Thank you. Is this concludes today's conference call? You may disconnect your lines. Thank you for participating and have a pleasant day.