Q4 2023 Equinox Gold Corp Earnings Call
Operator: Thank you for standing by. This is the conference operator. Welcome to the Equinox Gold fourth 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. To join the question queue, you may press star then 1 on your telephone keypad.
Thank you for standing by this is the conference operator, welcome to the Equinox gold fourth 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 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.
Operator: Should you need assistance during the conference call, you may signal an operator by pressing star then 0. If you are participating through the webcast, you can submit a question in writing by using the text box in the lower left corner of the webcast frame. I would now like to turn the conference over to Rilind Bailey, Vice President, Investor Relations, for Equinox Gold. Please go ahead.
If you are participating through the webcast you can submit a question in writing by using the text box in the lower left corner of the webcast frame.
I would like to turn the conference over to Willis Bailey, Vice President Investor Relations for Equinox Gold. Please go ahead.
Rilind Bailey: Thank you, Ashia, and thank you, everybody, for joining us this morning. We will, of course, be making a number of forward-looking statements today, so please do visit our continuous disclosure documents on our website, on CDER Plus, and on EDGAR. I will now turn the call over to our CEO and President, Greg Smith. Thanks, Rolin. And good morning, everyone.
Thank you Michelle and thank you everybody for joining us. This morning, we will of course, youre, making a number of forward looking statements. Today. So please do visit our continuous disclosure documents on our website on SEDAR and on Edgar I will now turn the call over to our CEO and President Greg Smith.
Thanks for land and good morning, everyone and thanks 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 ruined Bailey.
Gregory D. Smith: And thanks for joining the call today. On the line with me is our COO Doug Reddy, our CFO Peter Hardy, our EVP of Exploration Scott Heffernan, and, of course, our VP of Investor Relations Rolin Bailey. Again, today we are discussing Equinox Gold's 2023 fourth quarter and full year financial and operating results. For those of you that are new to the company, Equinox Gold is a fast-growing, Americas-focused gold producer.
Again today, we are discussing equinox, Gold's 2023 fourth quarter and full year financial and operating results.
For those of you that are new to the company Equinox Gold is a fast growing Americas focused gold producer, we've got seven producing mines across Brazil, Mexico, and the United States. We also have several growth projects, including our large scale greenstone gold mine in Ontario that we're bringing into production this year with our 40% joint venture partner Orion mine.
Gregory D. Smith: We've got seven producing mines across Brazil, Mexico, and the United States. We also have several growth projects, including our large-scale Greenstone gold mine in Ontario that we're bringing into production this year with our 40% joint venture partner, Orion Mine Finance. Our production is supported by a large gold endowment, including 17 million ounces in reserves and an additional 16 million ounces in measured and indicated resources. I'll just start with a broad overview, and then I'll turn the call over to Pete and Doug for more details.
Finance our production is supported by a large golden dalman, including 17 million ounces in reserves and an additional 16 million ounces in measured and indicated resources.
I'll just start with a broad overview and then I'll turn the call over to Pete and Doug for more details.
Gregory D. Smith: We had a strong finish to the year with fourth-quarter production of approximately 155,000 ounces. That's the second highest quarterly production in the company's history. Cash cost per ounce sold in the fourth quarter was $13.30, our lowest quarterly cash cost this year, with all and sustaining cost per ounce sold of $16.57.
We had a strong finish to the year with fourth quarter production of approximately 155000 ounces. That's the second highest quarterly production in the company's history cash cost per ounce sold in the fourth quarter was 13 30, our lowest quarterly cash costs. This year with all in sustaining cost per household of 16 50 <unk>.
Evan.
Gregory D. Smith: For the full year, we achieved our production guidance with just over 564,000 ounces produced. We sold 559,000 ounces in the year, beating our guidance with cash costs of $13.50 per ounce and achieving the low end of our all-in sustaining cost guidance at $16.12 per ounce. Our safety performance this year was good.
For the full year, we achieved our production guidance with just over 564000 ounces produced we sold 559000 ounces in the year, beating our guidance with cash costs of $13 50 per ounce and achieving the low end of our all in sustaining cost guidance at <unk> 12 per ounce.
Our safety performance this year was good.
Gregory D. Smith: Four of our sites had no lost time incidents in 2023, and Greenstone completed over 5.9 million hours of work during construction with only one lost time incident. Further, our total 2023 recordable injury frequency rate improved substantially from 2022. These are excellent results.
Four of our sites had no lost time incidents in 2023, and greenstone completed over $5 9 million hours worked during construction with only one lost time incident.
Further our total 2023 recordable injury frequency frequency rate improved substantially from 2022. These are excellent results.
Gregory D. Smith: However, I must also acknowledge that after more than five years with no fatalities, we did unfortunately have one fatality during the year at our Santa Luz mine. On the environmental side, we also had a substantial improvement to our significant environmental incident frequency rate compared to 2022. We issued our first Climate Action Report, our first Water Stewardship Report, and an Enhanced ESG Report. All of these are available on our website.
However, I must also acknowledged that after more than five years with no fatalities. We did unfortunately have one fatality during the year at our Santa lose mine.
On the environmental side, we also had a substantial improvement to our significant environmental incident frequency rate compared to 2022.
We issued our first climate action report, our first water stewardship report and an enhanced ESG report.
All of these are available on our website.
Gregory D. Smith: In addition, we improved our S&P Global Corporate Sustainability Assessment score by over 28% compared to the prior year. As most of you know, a major focus for the company during 2023 will be advancing construction of our greenstone mine in Ontario. Greenstone is one of the largest and highest-grade open pit gold mines in Canada and will be a cornerstone asset for Equinox Gold. With a strong push through the fourth quarter, construction at Greenstone was substantially completed by the end of the year.
Further we improved our S&P global corporate sustainability assessment score by over 28% compared to the prior year.
Okay.
As most of you know a major focus for the company. During 2023 was advancing construction of our greenstone mine in Ontario.
Greenstone is one of the largest and highest grade open pit gold mines in Canada and will be a cornerstone asset for equinox gold.
With a strong push through the fourth quarter construction at greenstone was substantially completed by the end of the year commit.
Gregory D. Smith: Commissioning is now the focus, and we're making excellent progress. Doug will have more details on the current status at Greenstone later in the call. When operating, Greenstone will significantly increase our production while reducing our consolidated costs, so achieving production is going to be a major catalyst for Equinox Gold this year, and this is going to be soon, as we're on schedule for the first gold pour in the first half of this year. During 2023, we advanced our plans to develop an underground mine at the Piaba Deposit in Arizona and also commenced initial groundwork at the new Tatejuba Open Pit. We plan to start development of the underground portal at Piaba and mining at Tatajuba later this year. We also continue to advance the permitting of the planned expansion at our Castle Mountain mine, which would increase production at Castle Mountain to over 200,000 ounces per year. We anticipate receiving the notice of completion from the Federal Bureau of Land Management in the very near term, and the notice of intent shortly thereafter.
Commissioning is now the focus and we're making excellent progress Doug will have more details on the current status of greenstone later in the call.
When operating greenstone will significantly increase our production, while reducing our consolidated costs. So achieving production is going to be a major catalyst for equinox gold this year.
And this is going to be soon as we are on schedule for the first gold pour in the first half of this year.
During 2023, we advanced our plans to develop an underground mine at the <unk> deposit at or Zona and also commenced initial groundwork up a new Tad as you about open pit.
We plan to start development of the underground portal IP Abbott and mining at <unk> later this year.
We also continue to advance permitting of the planned expansion at our Castle Mountain mine, which would increase production at castle mountain to over 200000 ounces per year, we anticipate receiving the notice of completion from the Federal Bureau of land management in the very near term and the notice of intent shortly thereafter.
Gregory D. Smith: We expect permitting for the expansion will finish in mid-2026. In the meantime, we're advancing engineering and design so that when the permit is received, we'll be well prepared to commence construction, and, in our minds, exploration drilling in 2023 successfully replaced our reserves. Looking forward toward 2024, we expect an increase in production to between 660,000 ounces and 750,000 ounces, with cash costs of between $1,340 and $1,445 per ounce, and all in sustaining costs of between $1,630 and $1,740 per ounce. The increase in production is driven by Greenstone, which we expect to ramp up through the course of the year following our first gold borer. And with that, Pete, I'll turn it over to you to discuss our financial results. Thanks, Greg.
We expect permitting for the expansion will finish up in mid 2026 in the meantime, we're advancing engineering and design so that when the permit is received.
We'll be well prepared to commence construction.
And across our mines exploration drilling in 2023 successfully replaced our reserves.
Looking forward toward our 2024, we expect an increase in production to between 660000 ounces and 750000 ounces with cash cost of between <unk> 40, and $14 45 per ounce and all in sustaining costs of between <unk> 30, and 17 40 per ounce.
The increase in production is driven by greenstone, which we expect to ramp up through the course of the year. Following our first full bore.
And with that Pete I'll turn it over to you to discuss our financial results. Thanks, Greg We're now on slide eight in the presentation.
Peter Hardy: We're now on slide 8 in the presentation. We had a good Q4 that saw improvements in most key financial metrics compared to Q3 this year and Q4 last year, including gold ounces sold, realized price per ounce, income from mine operations, EBITDA, and operating cash flow before changes in non-cash working capital. As Greg mentioned, Equinox had its strongest quarter on record for gold production and sales. We sold 150,000 oz of gold at a realized price of $19.83 per ounce for revenues of $298 million.
We had we had a good Q4 that saw improvements in most key financial metrics compared to Q3. This year in Q4 of last year, including gold ounces sold realized price per ounce income from mine operations, EBITDA and operating cash flow before changes in noncash working capital as.
As Greg mentioned equinox had its strongest quarter on record for gold production and sales. We sold 150000 ounces of gold at a realized price of 1983 per ounce for revenues of 298 million income from mine operations was $39 million and that's an increase of $13 million from Q3's income from mine operations of $25 million and $16 million more than we do.
Peter Hardy: Income from mine operations was $39 million, and that's an increase of $13 million from Q3's income from mine operations of $25 million, and $16 million more than we did in Q4 2022. The increases in income from mine operations from prior quarters are primarily driven by the strong and higher gold prices we realized in Q4. We had $198 million in operating expenses in Q4, which is a decrease compared to the $201 million of operating expenses from Q3 of this year and an increase from Q4 2022's $168 million. The quarter-on-quarter decrease from Q3 is primarily driven by lower reagent consumption at Los Filos.
In Q4 of 2020 to the.
The increases in income from mine operations from prior quarters is primarily driven by the strong and higher gold prices, we realized in Q4.
We had 198 million in operating expenses in Q4, which is a decrease compared to the $201 million of operating expenses from Q3 of this year and an increase from Q4 2020 $268 million.
Quarter on quarter decrease from Q3 is primarily driven by lower reagent consumption Atlas V loss included in our Q4 results are in our view write downs of $3 7 million or just under 4 million at Castle Mountain and just under 2 million of salaries.
Peter Hardy: Included in our Q4 results are NRV write-downs of 3.7 million, or just under 4 million at Castle Mountain and just under 2 million at Santa Luz. On a per unit basis, our Q4 cash cost per ounce of $13.30 is the lowest quarter for the year and lower than our annual 2023 cash cost per ounce of $13.50. Compared to Q4 2022, cash cost per ounce increased over $100 per ounce
On a per unit basis, our Q4 cash cost per ounce of 13 30 is the lowest quarter for the year and lower than our annual 2023 cash cost per ounce of $13 50, compared to Q4 2022 cash cost per ounce increased over $100 per ounce. The increase from Q4 last year is attributable.
Peter Hardy: The increase from Q4 last year is attributable to a few factors, including increases in mining costs related to contract mining rate increases, that's mostly in Arizona and St. Louis, of about $100 an ounce, and in addition, the appreciation of the Mexican peso and Brazilian real contributed to about $75 per ounce increase. Those increases from Q4 2022 are offset by a decrease of about $50 per ounce in consumables and energy prices. Had our realized gains in foreign exchange hedging been applied against our operating costs, it would have further reduced the cash cost per ounce for Q4 by about $50 per ounce. For annual 2023, the cash cost per ounce of $13.50 increased nominally from 2022 to $13.15 per ounce. However, had our realized gains in foreign exchange hedging been applied against our operating costs, it would have further reduced the cash cost per ounce for 2023 by about $60.
To a few factors, including increases in mining costs related to contract mining rate increases that's mostly at Arizona in salaries of about $100 an ounce and in addition, the appreciation of the Mexican peso and Brazilian real contributed to about $75 per ounce increase.
Those increases from Q4 2022 are offset by a decrease of about $50 per ounce and consumables are consumables and energy prices.
Had a realized gains on foreign exchange hedging been applied against our operating costs. It would have further reduced our cash cost per ounce for Q4 by about $50 per ounce.
Our annual 2023 cash cost ounce the cash cost per ounce pardon me at 13 50 increased dominantly from 2020 twos $13 15 per ounce had a realized gains on foreign exchange hedging been applied against our operating cost. It would have further reduced the cash cost per ounce for 2023 by about $60.
Peter Hardy: Our all-in sustaining cost per ounce for Q4 this year of $16.57 is nominally up from Q3 and comparable to Q1 2023. However, when compared to Q4 2022, the all-in sustaining cost per ounce is up just over $130 an ounce and due to the same reasons that I outlined for the increase in cash costs per ounce from Q4 last year, namely the mining and the foreign exchange. Our annual 2023 all-in sustaining cost per ounce of 1612 is lower than 2022's 1622 per ounce. In Q4, we saw Los Feliz continue to decrease its overall gold ounces leach pad inventory balance. That trend continued into the new year.
Our all in sustaining cost per ounce for Q4. This year of <unk> 57 is nominally up from Q3 and comparable to Q1 2023.
When compared to Q4 2022, all in sustaining cost per ounce is up just over $130 an ounce.
And due to the same reasons that I outlined outlined pardon me for the increase in cash cost per ounce from Q4 of last year, namely the mining of the foreign exchange.
Our annual 2023, all in sustaining cost per ounce. A 16 12 is lower than 2020 to $16 22 per ounce.
In Q4, we saw a feel is continue to decrease its overall gold ounces leach pad inventory balance that trend continued into the new year at mesquite, we saw an increase of gold ounce inventory on the leach pad compared to the end of Q3.
For mesquite gold ounce inventory increase from the second half of 2023 is expected to be recovered through the first half of 2024, and Doug will discuss our mesquite operations further in his review of the operations.
Peter Hardy: At Mesquite, we saw an increase in gold ounce inventory on the leach pad compared to the end of Q3. For Mesquite, the gold ounce inventory increase from the second half of 2023 is expected to be recovered through the first half of 2024. And Doug will discuss Mesquite operations further in his review of the operation. Our EBITDA in Q4 2023 was $85 million, or $95 million on an adjusted basis, which is an improvement over Q3 this year and Q4 last year. We had net income of $4 million, $2 million on an adjusted basis, both of which resulted in earnings per share of $0.01.
Our EBITDA in Q4, 2023 was $85 million or $95 million on an adjusted basis, which is an improvement over Q3. This year and Q4 last year. We had net income of 4 million 2 million on an adjusted basis, both of which resulted in earnings per share of a one cent.
Cash flow from operations before changes in noncash working capital was $168 million or 54 cents a share which includes 76 million of proceeds from a long term gold prepay arrangement that we closed in October.
With respect to our sustaining spend in 2023, we spent $120 million, which was $16 million less than our guidance of $136 million.
Peter Hardy: Cash flow from operations before changes to non-cash working capital was $168 million, or $0.54 a share, which included $76 million of proceeds from the long-term gold prepay arrangement that we closed in October. With respect to our sustaining spend, in 2023, we spent $120 million, which was $16 million less than our guidance of $136 million. Moving to slide 9, in terms of liquidity and capital position, we ended the quarter with $192 million of unrestricted cash. The decrease from Q3 is primarily due to repaying $166 million of the revolving credit facility on October 3rd with the proceeds from the convertible note we issued in September.
Moving to slide nine in terms of liquidity and capital position, we ended the quarter with $190 million of unrestricted cash decrease from Q3 is primarily due to repaying $166 million of the revolving credit facility on October 3rd with the proceeds from the convertible note we issued in September.
During December and into January economics made use of its ATM and issued $9 9 million shares at an average realized price of.
Just under $4 80 per share for about 48 million of proceeds.
With regards to greenstone, a total of $1 2 billion of the project spend has been spent to date pardon me or through the end of December 31, with a total budget of one point to 3 billion throughout the project equinox saw some increases during the strong inflationary environment that were offset primarily by savings on foreign exchange.
Peter Hardy: During December and into January, Equinox made use of its ATM and issued 9.9 million shares at an average realized price of just under $480 per share for about $48 million in proceeds. With regard to Greenstone, a total of $1.2 billion of the project budget has been spent to date or through the end of December 31st, with a total budget of $1.23 billion. Throughout the project, Equinox saw some increases during the strong inflationary environment that were offset primarily by savings on foreign exchange and equipment financing. There is some exposure over the commissioning period offset by expected gold revenue, but we ultimately expect Greenstone to commence commercial production largely on budget. We expect to fund our remaining share and any pre-commercial expenditures through our cash at the end of the quarter and our operating cash flow. We have $165 million available to draw on our revolving credit facility, $140 million of which is set aside to repay Mubadala should the convertible Deventure that matures in April expire out of the money.
The equipment financing there is some exposure to the commissioning period offset by expected gold revenue, but we ultimately expect greenstone to commence.
Commercial production largely on budget.
We expect to fund our remaining share in any pre commercial expenditures through our cash at the end of the quarter and our operating cash flow, we have a $165 million available to draw on our revolving credit facility of $140 million of which set aside to repay but bottler should the convertible debenture that matures in April expire out of the money.
As equinox depends in part on operating cash flow to fund greenstone, we added to the gold hedges in place to ensure and extended them to the end of Q2 to ensure a minimum gold price and secure the related cash flow on a portion of our gold sales.
As of Jan one the company had colors on about 143000 ounces of gold with a floor of $19 64, and a ceiling of $21 70 per ounce.
Additionally, we have the $100 million, the 100 million accordion on the revolving credit facility feature that remains outstanding amount drawn and finally, we have other leavers, whether 100 million investment portfolio and our ATM should they be needed.
And with that completes the review of our financial performance for the quarter I'll turn the call over to Doug for the operations.
Peter Hardy: As Equinox depends in part on operating cash flow to fund Greenstone, we added to the gold hedges in place to ensure and extended them to the end of Q2 to ensure a minimum gold price and secure the related cash flow on a portion of our gold sales. As at Jan 1, the company had collars on about 143,000 ounces of gold with a floor of 1964 and a ceiling of 2170 per ounce. Additionally, we have the $100 million accordion on the revolving credit facility feature that remains outstanding and undrawn.
Thanks Keith.
Now on slide 10 of the presentation.
That's an escape line gold production was within guidance at 88000 ounces and below all in sustaining guidance at $1251 per ounce for the year.
<unk> stopped a large tenant of war in both Q3 and Q4 and it took a while to bring all of that whore under Leach.
School inventory was being drawn down in Q4 and it will continue.
Into 2024 with most of the gold production in the first half of the year coming from the ore that's already stacked.
Peter Hardy: And finally, we have other levers with our $100 million investment portfolio and our ATM should they be needed. And that completes our review of our financial performance for the quarter. I'll turn the call over to Doug for a review of the operation. Hey, thanks, Keith. You are now on slide 10 of the presentation. At the Mesquite Mine, gold production was within guidance at 88,000 ounces and below all sustaining guidance at $1,251 per ounce for the year.
Stripping on the agenda is now the main focus for mining, but the majority of the ore from the pit will be coming online in 2025, Ginger was a new discovery in 2023, and it's quickly been incorporated into the overall mine plan.
M escape. The company continues working on developing additional resources and permitting to extend the life of the mine.
At Castle Mountain Gold production was below guidance at 21000 ounces and visible in all in sustaining cost guidance at $1899 per ounce for the year.
Doug Reddy: The mine stacked a large tonnage of ore in both Q3 and Q4, and it took a while to bring all of that ore under leap. This gold inventory was being drawn down in Q4 and it will continue into 2024 with most of the gold production in the first half of the year coming from the ore that's already stacked. Stripping the ginger pit is now the main focus for mining. The majority of the ore from that pit will be coming online in 2025. Ginger was a new discovery in 2023.
One is a small operation and that involves mining and processing of low grade mineralized dump material. This material needs to be removed from the old open pits and anticipation of mining higher grade Institute or during the phase two expansion.
Crushing and agglomeration modifications were completed in 2023 and the contract you also increase their throughput.
Doug Reddy: And it's quickly been incorporated into the overall mine plan. MSG, the company continues working on developing additional resources and permits to extend the life of the market. At Castle Mountain, gold production was below guidance at 21,000 ounces and was within all and sustaining cost guidance at $1,899 per ounce for the year.
About 46% or are we still didn't get to the level of crushed material being fed through the crushing and agglomeration system that we wanted so we will continue to work on this and also on cost reductions in 2024.
<unk> gold production was below guidance.
159000 ounces.
And over the all in sustaining cost guidance at $1890 per ounce for the year.
Doug Reddy: Phase 1 is a small operation that involves mining and processing low-grade mineralized dump material. This material needs to be removed from the old open pits in anticipation of mining higher-grade in situ ore during the Phase 2 expansion. Crush and agglomeration modifications were completed in 2023, and the contractor also increased their throughput by about 46%, but we still didn't get to the level of crushed material being fed through the crush and agglomeration system that we wanted, so we'll continue to work on this and also on cost reductions in 2024. At Los Feliz, gold production was below guidance at 159,000 ounces and over the on sustaining cost guidance at $1,890 per ounce for the year.
In 2023 and productivity improvement program in both the open pit and underground mines was implemented and that yielded an increase in overall oil production.
However in spite of the additional ounces that were above the mine plan.
Being mined and stacked leach pad issues resulted in slower lower recoveries and there was an increase in the inventory balances accumulated on the pad.
The issues were resolved during the.
The second half of the year and we'll draw down on the ounces continued through Q4 and continued into Q1 this year.
During 2024 will be mining from the law schools, Burma Hall, and Guadalupe open pits and also from the loss of People's underground.
Doug Reddy: In 2023, a productivity improvement program in both the open pit and underground mines was implemented, and that yielded an increase in overall ore production. However, in spite of the additional ounces that were above the mine plant being mined and stacked, leach pad issues resulted in slower and lower recoveries, and there was an increase in the inventory of ounces accumulated on the pad. The issues were resolved during the second half of the year, and the drawdown of the ounces continued through Q4 and into Q1 this year. In 2024, we'll be mining from the Los Filos, Bermahal, and Guadalupe open pits and also from the Los Filos underground. All of the ore goes onto the existing ethics pad, and we're continuing optimization efforts to improve efficiencies and reduce costs, in the longer term.
All of the ore goes onto the existing heap Leach pad and we're continuing optimization efforts to improve efficiencies and reduce costs.
Longer term.
We'd like to expand the mining to build the carbon in Leach plant. So we can process higher grade ore and that would be a 10000 ton per day plant.
To build.
Well, we're not going to be able to make that investment unless we've been able to negotiate new agreements with our community partners. So that we can ensure long term economic viability and stability for the mine.
We started the dialogue.
In the fourth quarter of last year.
And we're certainly hopeful that we'll be able to find a long term solution. So that we can invest in the mine, but as you'll see in the MD&A. We we stated that if we're not able to find a long term solution. We may need to suspend the mine at least until new agreements in place. So that we can enter into a new phase of life for a while.
Doug Reddy: We'd like to expand the mine and build the carbon and leach plant so we can process higher-grade ore, and that would be a 10,000 ton per day plant that we would like to build. But we're not going to be able to make that investment unless we've been able to negotiate new agreements with our community partners so that we can ensure long-term economic viability and stability for the mine. We started the dialogue in the fourth quarter of last year when we were certainly hopeful that we'd be able to find a long-term solution so that we can invest in the mine, but as you'll see in the MD&A, we stated that if we weren't able to find a long-term solution, we may need to suspend the mine at least until new agreements are in place so that we can enter into a new phase of life for In Brazil, at the Arizona mine, coal production was within guidance at 121,000 ounces and within own sustaining guidance at $1,440 per ounce for the year.
Felix.
On the next page.
In Brazil.
Arizona mining coal production was within guidance at 121000 ounces and within home sustaining guidance $1440 per ounce for the year.
In 2020 three we had a record year for the total tons being moved on the mine and the mine.
We also completed a new tailing storage facility, which is now in Houston, and then a two well.
We began the decommissioning of the one tailings storage facility.
This year, we're going to be mining from the pit the PLD used fit and also from the new type of Juba open pit, which is on the same trend until the west in Seattle.
We will be finishing the installation of a pebble crusher that's to maintain throughput at 8000 tonnes a day fresh rock will be about 67% of plant feed in 2024.
Doug Reddy: In 2023, we had a record year for the total tons being moved by the mine in the mine. We also completed the new tailing storage facility, which is now in use. That's VIN A2, and we've begun decommissioning the VIN A1 tailing storage facility.
We have the permits we need to start with the department on the portal and ramp access to the underground and we will start that work in the second half of the year.
Doug Reddy: This year we're going to be mining from the Piava Pit, the Piava East Pit, and also from the new Tatajuba Open Pit, which is on the same trend and to the west of Piava. We will be finishing the installation of a pebble crusher to maintain throughput at 8,000 tons a day. Fresh rock will be about 67% of plant feed in 2024.
It's gonna, let us get underground to do some bulk sampling in underground drilling and the portal will be solved ultimately it can be usable as a production decline for underground operations.
The presenter mine, we had another good year, achieving guidance was 66000 ounces produced but coming in slightly above the all in sustaining cost guidance at $1448 per ounce.
Doug Reddy: We have the permits that we need to start the development of the portal and ramp to access the Piava Underground, and we'll start that work in the second half of the year. That's going to let us get underground to do some bulk sampling and underground drilling. And the portal will be sized ultimately to be usable as a production decline for underground operations. At the Fazenda mine, we had another good year achieving guidance with 66,000 ounces produced but coming in slightly above the all-in sustaining cost guidance at $1,448 per ounce. Plant feed for 2024 will be 35% from the open pit and 65% from underground.
Feed for 'twenty 'twenty, four will be 35% from open pit and 65% from underground.
I do note that the team is evaluating the opportunity for a larger open pit over the center portion of the main mineralized trend. So I hope he will talk about that more later on this year.
Drilling programs continue to replace reserves in the underground to year on year and that's been a consistent annual program that we've had.
Okay.
Annually replace what we mine underground.
And a T O. Some freeze is in progress and.
Doug Reddy: I do note that the team is evaluating the opportunity for a larger open pit over the center portion of the main mineralized trend, so hopefully, we'll be able to talk about that more later this year. Drilling programs continue to replace reserves in the underground year on year, and that's been a consistent annual program that we have made the effort to replace what we mine underground, and a TSF raise is in progress at Susenda and will be completed in Q2. At RDM, gold production was within guidance at 53,000 ounces and below the all-sustaining guidance at $1,612 per ounce for the year.
And will be completed in Q2.
And R&D any gold.
<unk> was within guidance at 53000 ounces and below the all in sustaining guidance at $1612 per ounce for the year.
In 2023, we continue mining with our rental and other fleets that's being operated by the owners team.
Where we're doing this year will you we're continuing on with the stripping campaign that will allow us to get into a section of higher grade ore at the bottom of the pit.
We expect full access to be at the start of 2025.
We're also doing some input dumping that should help us to reduce some costs and.
Doug Reddy: In 2023, we continued mining with a rental and owner fleet that's being operated by an owner's team. We're doing this year, we're continuing on with a stripping campaign that will allow us to get into a section of higher-grade ore at the bottom of the pit when we expect full access to be at the start of 2025. We're also doing some input dumping that should help us to reduce some costs. And we're planning to implement dry stack tailings in the second half of the year. At Santa Luz, gold production was below guidance at 57,000 ounces and within the all-in sustaining cost guidance at $1,834 per ounce for the year.
We're planning to implement on dry stack tailings in the second half of the year.
And sad to lose gold production was below guidance at 57000 ounces and within the all in sustaining cost guidance at $1834 per ounce for the year.
The mine had a good first half of the year, but began to have problems with pollution and electro winning in the fourth quarter that impacted our resin activity and the recoveries. These issues were being addressed as we came into the end of the year and into the year.
And 'twenty 'twenty, four we will be making some plant modifications and those will be to increase mill throughput and improved recoveries.
One of them is a dis lining circuit that'll be to reduce the total organic content.
Doug Reddy: The mine had a good first half of the year but began to have problems with elution and electrowinning in the fourth quarter, which impacted our resin activity and our recoveries. These issues were being addressed as we came into the end of the year and into the new year. In 2024, we will be making some plant modifications, and those will be to increase mill throughput and improve recoveries. One of them is a de-sliming circuit that will reduce the total organic content and improve overall gold recovery by about 6%.
And improve overall gold recovery by about 6%.
We will be installing a new trend and that's to increase mill throughput should be about more than 10% increase on the throughput.
And we're optimistic that these improvements overall will help stabilize the recoveries and throughput.
He had the objective of achieving recoveries over 23% are harder for the second half of the year.
Doug Reddy: We'll be installing a new trunnion that's to increase mill throughput by more than 10%. That should be about a more than 10% increase in throughput, and we're optimistic that these improvements overall will help stabilize the recoveries and throughput. We have the objective of achieving recoveries over 73% or higher for the second half of the year.
We're also doing a T. S. S tend to lose that should be completed by the start of Q2.
And move onto greenstone so.
Obviously, our cornerstone asset for equinox.
It's got a grateful production profile high average grade for an open pit 127 grams, and we'd be averaging 400000 ounces a year and a 100% basis. So that gives us about 240000 ounces coming to Equinox school, given our 60% interest in the project.
Doug Reddy: We're also doing a TSF at Santa Luz that should be completed by the start of Q2. Okay, move on to Greenstone, obviously a cornerstone asset for Equinox. It's got a great production profile, a high average grade for an open pit, 1.27 grams, and we'll be averaging 400,000 ounces a year on a 100% basis, so that gives us about 240,000 ounces coming to Equinox Gold given our 60% interest in the project, plant throughput at 27,000 tons per day. I mean, that's where we'll be ramping up to. And during that time, we'll be evaluating what will be needed to be able to take it up to 30,000 tons a day, which is the permitted rate for the mill. With a 14-year life, it's a good initial mine life, but we do also see opportunities to add from areas that are immediately adjacent to the current pit design. Plus from an underground opportunity and also other deposits on the property.
Planned throughput at 27000 tonnes per day, I mean, that's that's where we'll be ramping up to.
And during that time, we'll be evaluating what will be needed to be able to take it up to 30000 tons, a day, which is the permitted rate or for the mill.
With a 14 year licensing some good initial mine life, but we do also see opportunities to add.
From areas that are immediately adjacent to the current pit design plus.
Plus from an underground opportunity and also other deposits on the property. So we look forward to being able to augment the mine plan over the coming years.
Doug Reddy: So we look forward to being able to augment the mine plan over the coming years. I just visited the site; I'm just in transit back to the corporate office. It's an exciting time, and I will commend the construction team. After 25 months of construction, they have kept to the overall schedule of H1 2024 being the gold core. It's a really good site to see.
Oh I just visited the site I'm just in transit back to back to the corporate office.
It's an exciting time.
I will commend the construction team now after 25 months of construction and they have kept the overall schedule of each one being each one and 2020 for being the gold pour.
It's a really good sight to see and when you look at the crushing circuit or storage dome, they've been in hot commissioning essentially there they're ready to go there was that we're sitting in the AR and the storage dome ready to be used.
Doug Reddy: And when you look at the crushing circuit or the ore storage dome, they've been in hot commissioning. Essentially, they're ready to go. There's ore sitting in the ore storage dome, ready to be used; ball mills, HPGR, leach tanks, and thickeners; they're all in wet commissioning, and the tailings facility is permitted and ready for use. The mining fleet is 14 trucks and 3 shovels; current mining rates are about 90,000 tons a day, and it will be ramped up to 180,000 tons per day as we bring on additional trucks and bring them into service, stockpile for startup.
Ball Mills H P. G R Leach tanks and thickener, they're all in a wet commissioning.
And the tailings facility is permitted and ready for use.
The mining flight fleet is 14 trucks three shovels current mining rates are about 90000 tons a day.
It will be ramped up to 180000 tonnes per day as we bring on additional trucks and bring them into service stockpiles for start up currently.
Doug Reddy: Currently, it's just over one and a half million tons, but I know there's another quarter million tons broken in the pit. So they're doing a good job of putting everything in place ready for hot commissioning and ramp up, and we've received all the permits required for the commissioning activities, and overall, things are going well. We're really looking forward to being able to announce the first gold pour in the next few months and then advancing through the ramp-up in commercial production and onward. So with that, I'll hand it back to Greg. Yeah, thanks, Doug.
Just over one and a half million tons I know, there's another quarter million tons broken in the pit so they're doing a good job of.
Putting everything in place ready for hot.
Hot commissioning and ramp up.
And we've received all the permits required for the commissioning activities and overall things are going well, we're really looking forward to being able to announce first gold pour in the next few months and then advancing through a ramp up in commercial production and onwards.
So with that I'll hand, it back to Greg.
Yeah, Thanks, Doug and and yes, I'll, just reiterate with the greenstone coming online in 2024, there's going to be a very transformative year for equinox gold.
Gregory D. Smith: And, and yeah, I'll just reiterate with Greenstone coming online and in 2024, this is going to be a very transformative year for Equinox Gold. You know, as we progress through this year, we're going to be increasing our production in what we believe will be a macro environment of decreasing interest rates and increasing gold prices. Our production from Greenstone will significantly reduce our operating costs and meaningfully increase our cash flow as we ramp up production through the year. With our capital costs at Greenstone also substantially decreasing, Equinox Gold will transition to generating significant cash flow later this year.
As we progress through this year, we're going to be increasing our production and what we believe will be a macro environment of decreasing interest rates and an increase in gold prices.
Production from greenstone will significantly reduce our operating costs and meaningfully increase our cash flow as we ramp up production through the year with our capital cost at greenstone also substantially decreasing here equinox gold will transition to generating significant cash flow later this year.
Gregory D. Smith: I'd just like to thank the entire Equinox team, the team at Greenstone as well for their efforts during 2023, and, of course, sincere thanks to all of our stakeholders. I think I'll conclude there and pass it back to Roland for Q&A. Shia, can you please remind people how to ask a question?
I'd just like to thank the entire equinox team the team at greenstone as well for their efforts during 2023.
Of course, a sincere thanks to all of our stakeholders.
Golf conclude there and pass it back to Robin for Q&A perfect. Shea can you. Please remind people how to ask a question.
Operator: Bentley, once again, to join the question queue, you may press star and then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys.
Suddenly.
Once again to join the question queue. You May Press Star then one on your telephone keypad, you will hear a tone knowledge and your request if youre using a speakerphone. Please pick up your handset before pressing any keys.
Operator: To withdraw your question, please press star, then two. If you are participating through the webcast, you can submit a question in writing by using the text box in the lower left corner of the webcast frame. Perfect, thank you. While we wait for people to queue up, we'll take a couple of questions from online. Doug, could you touch briefly on what's happening at Greenstone? What are the next milestones that you would need to achieve to achieve first goal four? Doug, do you want me to start and you can jump in? Go!
Your question. Please press Star then two if you are participating through the webcast you can submit a question in writing by using the text box in the lower left corner of the webcast frame.
Perfect. Thank you well the way for people to queue up we'll take a question couple of questions from my mind doesn't touch briefly on what's happening at Greens, John what are the next milestones that you need to achieve to achieve.
Ballpark.
Yeah.
Doug you want me to start and you can jump in.
Yeah.
Sure. So I mean, we're getting we're getting and the real final stages here as Doug mentioned the crushing circuit has been Hot Commission. There is there is that we've been running it intermittently accumulating your crestor stockpile in the storage dome H B G. R, which is the high pressure grinding roll is ready to receive material.
Gregory D. Smith: So, I mean, we're getting in the real final stages here. As Doug mentioned, the crushing circuit has been hot-commissioned. We've been running it intermittently, accumulating a crust ore stockpile in the storage dome. HPGR, which is the high-pressure grinding roll, is ready to receive material. The mills are almost there. Ball Mill 1, which has been turned and load-tested, and Ball Mill 2 is shortly behind it.
Mills are almost air ball mill, one has been turned in low tested and ball mill two is shortly behind it and the real push in the primary push at this stage to get into full hot commissioning has just programming in instrumentation in the circuit and so we've got a full team focused on that right now and as we.
Gregory D. Smith: And the real push and the primary push at this stage to get into full hot commissioning is just programming and instrumentation in the circuit. And so we've got a full team focused on that right now. And as we move through that, we can bring each incremental part of the circuit online. And as soon as we can push material through the whole thing, we'll start that hot commissioning. So, we're getting close. And, you know, in terms of what we'll publicly announce between now and the first gold pour, I'm not sure because it really is coming down to just getting the programming done and starting to push material through the circuit. Is that about it, Doug, or is there anything else to add? You covered that. That's really what it boils down to now. Most of the other things are minor.
<unk> moved through that we break we can bring on each incremental part of the circuit online and as soon as we can push material through the whole thing will start that that hot commissioning, so getting close and.
And in terms of what will publicly announced between now and first gold pour I'm not sure because it really is coming down to just getting the programming done and starting to push material through the circuit.
Is that about about it Doug or anything else.
You just never did that.
So really what it boils down to you know most of the other things or are minor and once you're in the hot commissioning you can work through any any residual issues in tiny everything up.
Gregory D. Smith: And once you're in the AUG commission, you can work through any residual issues and tidy everything up. Okay, we've got a few questions online from Kerry Smith, our analyst from Haywood Securities. First one's for Doug.
You've got a few questions online from Kerry Smith, our analysts from Haywood Securities Firstly on the <unk>, what's the stockpile grade greenstone and is it in line with your block model.
Doug Reddy: What's the stockpile grade at Greenstone and is it in line with your block model? Well, to first of all deal with the second part, is it aligned with the block model? We did a grade control drilling program, and everything is pretty much matching the grade of the block model. And then on the current stockpile average grade, I think we're about one gram overall, but that's not reflective of the bins. I mean, we've been getting, I'll say a positive reconciliation on tons and low-grade material that's outside of the block model. But these are the first few benches, so we are carefully monitoring it as we go along. There is some variation in topography as you have the interface between soil and initial rock.
Yeah.
Well first of all deal with the second part is it in line with the block model, we did a great control drilling program was done.
And everything is pretty much matching.
Against the Green in the block model and then on the Hum stockpile average grade I think we're about one gram overall, but that's not reflective of the bins. I mean, we've been getting I'll say a positive reconciliation on tons and low grade material that's outside of the block model.
But it is it is the first few benches so are.
We are carefully monitoring it as it is.
As we go along.
There is some variation on.
This is <unk>.
Have the interface between sell in and the initial rock, but it's so far it looks like is paying off.
Doug Reddy: But so far, it looks like it's paying off. Perfect, thanks. Carrie's also wondering what our preferred strategy and options are for retiring the April 2020 convertible notes. Well, the preferred strategy is that it settles in the money, and they convert and move from being note holders to shareholders. If that does not happen, either they don't convert or it does not settle in the money, we have the funds set aside from the conversion that we raised in September, which is currently parked against the revolving credit facility, and it's there to repay Mubadala should we need to. Thank you. I'll be general because this is really a discussion between us and the communities at the moment.
Perfect. Thanks carries also wondering what our preferred strategy and options are for retiring the April 2020 convertible notes.
Well the preferred strategy as it settles in the money and they converge and moved from being noteholders to shareholders.
Yes that does not happen either they don't convert or does not settle in the money and we have the funds set aside from the convert that we raised in September which is currently parked against the revolving credit facility.
And it's there to repay mubadala should we need to.
Thank you one more from Carrie how are the discussions going with a shriek you may need that must be long, it's been a long term life of mine agreement.
Yeah.
Oh I'll be general because this is really a discussion.
Between us and the community is at the moment.
Peter Hardy: We've had, I met with them in November; we've had several meetings through December and January. We have a team that's engaged and addressing concerns both on the current CSR side and a separate team that is also able to meet with them on an ongoing basis. We're still in dialogue; we've kind of laid it all on the table as to the opportunities for me, and we see it as an opportunity to establish the next stage of life for Los Feliz, and it's clear that change is necessary, but it's a dialogue, and so it's going to take a while. Thank you. Ashia, can we please take some questions from the phone?
We've had I met with them in November we've had.
Several meetings.
Through December January.
We have a team that's engaged and are.
Addressing concerns both on the current CSR side, but a separate team that also was able to meet with them on an ongoing basis.
Salon dialogue, we we've kind of laid it all on the table as to what are the opportunities at the mine and we see it as an opportunity to establish the next stage of life for the last few months and.
It's clear the changes necessary, so that it's a dialogue and so it's.
It's going to take a wall.
Okay. Thank you and Sheila can we please take some questions from the phone.
Of course.
Operator: The next question comes from Wayne Lamb with RBC; please go ahead. Thanks. Morning, guys.
Next question comes from Wayne Lam with RBC. Please go ahead.
Thanks, Good morning, guys I was just curious on the.
Unnamed Analyst: I was just curious about the non-sustaining spend at Mesquite this year. It's quite high on that stripping for the ginger pit. Just wondering, you know, what kind of additional mine life or ounces we should expect from that stripping program. I'll just start. Wayne and Doug, feel free to jump in.
Non sustaining spend that skewed this year, it's quite high on that shipping.
Ginger just wondering what kind of additional mine life for that says we should expect from that that's stripping program.
I'll start Wayne.
And Doug feel free to jump in but so ginger is a new discovery brand new pads at mesquite and so what youre seeing in our non sustaining capex. This year is basically the stripping program. We are undertaking to to advance that pet toward commercial production and Ginger will provide a substantial.
Gregory D. Smith: So Ginger is a new discovery, a brand new pit at Mesquite. And so what you're seeing in our non-sustaining capex this year is basically the stripping program we're undertaking to advance that pit toward commercial production. And Ginger will provide a substantial amount of the ounces in 2025. And what this does, this capital investment this year, it really sets up for a fairly meaningful increase in production in 2025 at Mesquite. And then beyond that, we're continuing to develop additional sources of ore. And, you know, kind of what we say on every call here is we want to keep Mesquite going as long as we can. And happily, we've been able to continue to do that through the discovery of new resources at the site. So, you know, certainly 2025 is looking good for Mesquite. That's the whole point of the investment we're making this year. Okay, is that in reserve, though? Or are there any parameters on how we might be able to think about it?
Out of the ounces in 2025 and what this does this capital investment this year it really sets up for a fairly meaningful increase in production in 2025 at mesquite and then beyond that we're continuing to develop additional sources of ore and and you know kind of what we say on every call here.
We want to keep mosquito offering as long as we can and and happily we been able to continue to do that through the discovery of new revenue resources outside.
So certainly.
Certainly 2025 is looking good at mesquite, that's the whole point of the investment we're making this year.
Okay is that pay in reserved or are there any parameters that.
Yeah.
How we might be able to think about it.
Doug Reddy: You want to handle that one? I mean, it came in quickly, so essentially it was identified by exploration and put into a resource model as we came to 2023. But it is at a reserve level and was able to be put into the mine plan at the tail end of the year. And then we, yeah, it's definitely, We'll continue to look at additional opportunities to try to expand beyond, but it provides good production in 2025. Okay, great. Thanks.
Do you want to handle that one.
I mean, it came in and quickly so it's essentially it was identified by exploration.
And put into a resource model in.
And as we came through 2020 three it but it is at a reserve level and was able to be put into the mine plan at the tail end of the year and then.
Hum.
Yeah, it's it's definitely.
We will continue to look at additional opportunities to try to expand beyond but it provides good production in 2025.
Okay, great. Thanks, and then maybe just at greenstone.
Unnamed Analyst: And then maybe just at Greenstone, it seems like the total CAPEX budget was effectively spent by year end. Just wondering on the $95 million in non-sustaining, is the majority, just on timing of that, is the majority of that spend going to be completed in the first half before the first quarter? And then just looking at the mine plan, there was about $77 million in sustaining CAPEX budget in year one, and I was just wondering what the delta is versus the $25 million guidance. I'll handle the first part of your question, Wayne. The $95 million...
It seems like the total Capex budget was effectively spent by year end just wondering on the 95 million and non sustaining is the majority just on timing of that is that is the majority of that spend go knee.
<unk> completed in the first half before first gold pour and then.
Just looking at the mine plan, there was about 77 and $77 million in sustaining capex budget in year, one and just wondering what the delta is versus the $25 million guidance.
I'll handle the first part of your question Wayne.
The 95 million is spread fairly evenly throughout the year, we split that really call. It.
$55 million construction related 40 million to other call it ancillary infrastructure that we.
We need to do but timing of which we're still reviewing.
And not and not not at all fundamental to the actual construction budget.
Of the $55 million about half of that is contingency.
So that would related to construction that would be the first half of the year with the remainder effectively spread throughout the year.
Okay, and I guess, the second part of your question there Wayne.
I don't have the feasibility study in front of me obviously, it's several years.
Out of date in terms of where we're at in the project now, but within our sustaining capex. It's primarily for work around additional drainage on the site. We also are going to be maintaining our camp.
I originally with the construction camp now we're going to make it a we'll call it a semi permanent cap and so we're going to do some upgrades on that camp, we don't really need to do those yet we could push that out to later in the year and then there is some capital stripping in there as well, yes, there may be a calendar year versus year. One difference you know our model difference versus the calendar year difference about.
When we can get back to you on on run out to go out and get back to you on it.
Okay No problem. Thanks for the detail and then maybe just a curious on the ATM.
You guys have done the convert are in September which was kind of in advance to try to derisk the upcoming repayment.
And just curious it seems like.
The execution over the past few months has been pretty aggressive on that facility and so just wondering if.
If that.
If you guys expect to continue that program over the coming months or how we should think about the execution on that ATM.
Yeah, I guess, just just looking at the Big picture here you know we've been in two years more than two years in a euro in Canadian dollar terms, the $1 billion of build for the company in a pretty meaningful build and we financed that largely through.
That some prepay as cash flow from operations and to a very minor extent some equity through our ATM it'd be sub 10% at this stage and so the ATM. It's been a it's been a good tool for us and our shareholders I think just to manage our cash balances and our financial strength across what has been a pretty significant build.
As we go into the later part of this year at greenstone. His commercial production, we start to generate substantially more cash flow from operations and it becomes less.
With less of a focus for the company in the near term we've got access to it as we go through the commissioning of greenstone I think it's a good a good tool to have available to the company, but whether or not we'll use it will depend on how we're seeing things shake out with our overall liquidity position as we bring greenstone into production.
Okay, great. Thanks, I'll hop back in queue.
The next question comes from Don Demarco with National Bank Financial. Please go ahead.
Well, thank you operator, and good morning team.
First question can you speak to the trajectory of the ramp up over the year.
240000 ounces, obviously backend loaded, but maybe any additional color on how we should model this quarter over quarter depreciated.
Yeah. It's so it's a staged ramp up probably the best way to put it we think that will start pouring gold in Q2.
First phase of the ramp up will be to get to the sort of 60% of capacity commercial production and let's call that sometime in Q3 starts to look like 80% of capacity and then by the end of the year, we should be at that 90% to 95% capacity as we move into sort of November December.
Okay and.
Monster and the earlier Caller's question, you mentioned the stockpile grade B, one gram per tonne should we expect that the grades in the first half during the ramp up could be lower than in the back half.
Yeah. So the original plan was to have around 800 and 900000.
Tons at around a 0.9 gram per tonne that was in our original model. We're sitting here now at a million north of the ground. We've got as Doug mentioned, we've got several bands and we've got certain things that are very very high grade and then we've got some.
Positive variance in terms of times, where we've got some lower grade material as well so of course as we start the ramp up we're gonna be running much lower grade material initially through the crusher mills.
And as we dial in the processing circuit increase our recoveries will start to introduce at higher grade and in the first the first five years of this mine the grade is higher than the life of mine average so we'll be able to ramp up the grade profile pretty quickly this year.
Okay, great well certainly look forward tobacco costs are attractive for guidance.
But sticking with greenstone on the greenstone Capex you mentioned you expect to finish the year on budget versus the 1.323 billion total capex.
No capex guidance.
Included a $68 million and post construction costs can you provide some more color on these items like for example, it had the new hydro substation. So on and are these items considered separate from that initial development Capex budget.
Sure. So as we as we get to the very end here, you've got we've got some things that that fall into sort of sustaining capital or post construction capital Theres a few items that we did not mean to do during the build that we pushed out the hydro station is one of those is one of those items, it's more of a.
Timing of the open pit is to when we need to move it. So it was not something that had to be done during the construction period as we said by the end of 2023 construction.
Of the mind of the tailings facility of the crushing circuit, knowing all the staff needed to run the operation and all the material infrastructure was complete and we moved into commissioning and over the course of of.
<unk> 2024 and into 2025, we do have to do with the.
Hydro substation there are some historic soils on the on the properties that were contaminated from early mining in earlier industrial activity, we need to move those into the tailings facility. We're buying an additional generator, which is really for redundancy for the power plant, we've got fleet payments, which are related to lease.
<unk> for the fleet, which are kind of even through the year and I think I think I said earlier some drainage and then the camp and then some capital stripping that comes in later this year as well. So nothing you know nothing sort of significant in and of itself.
Just things that will clean up the overall site and things that we need to do although the timing of when we need to do some of these things is that it's actually that we can push them off or or or wait until commercial production or even 2025.
Okay understood. Thanks for that well that's all for me and good luck with the rest of the ramp up.
Thanks.
And I'll take questions.
Okay.
Next question comes from Anita Soni with CIBC. Please go ahead.
Hi, good morning, Greg and team.
Apologies. If this has been asked I just hopped off the newmont call, but I was just wondering when it comes to the the the guidance for the hard rock.
Greenstone outfit them could you give us a little bit of color on the grades and sort of cadence of throughput increases that you expect over the question of the year.
Yeah, we actually just answered that question I need it all I'll give you the two scoops again, so the basically from from first of all for the first ramp up is to 60% and we see that happening relatively quickly the push to commercial production would take us to 80% and we see that happening.
Sometime in Q3.
And then as we move into the end of the year, we would we would hit that sort of 90% to 95% plus capacity and largely be a capacity by the end of 2024.
The initial the initial grades that will put through you know sort of for the material that will lead to first gold in into that 60% ramp up will be lower just as we go through the commissioning make sure we're getting the recoveries and everything is working the way it should and then we can start to introduce the higher grade material into the plant and through the back end of this year.
We are as we are in commercial production. The average the average grade for the first five years, just as a general comment in the models 147, but there's higher grade.
Material available sort of within that broader average right now we're sitting on a one.
1.5 million.
Times of stockpile that sort of added just over one gram, but within that one 5 million tons. There is there is a fairly wide range of grades where we've got some low grade and we've also got a fair bit of much much higher grades than that so it's like any like any mine start up start with the low grade ramp up to production increase the grades as we made sure.
Ensure we've got the recoveries and then get to commercial production.
Yeah, I guess when it was lost on the tour in a in September you guys were talking about potentially smoothing that first five year profile I think originally the technical part had.
Very high grades at 1.7 Gram per tonne material, then dropped one three am I thought I was looking for you know sort of a little bit of color on that but then also the other aspect of it is the stockpiled material like her.
As you mentioned the grade that you have in the stockpiles, one gram per tonne material and youre going to be feeding something materially higher than that so it's relying on your polling higher grade material out of that stockpile. So I was just wondering like what's what the actual feed material is is going to be in the next couple of years.
Yeah, I think I mean, we're looking forward to looking at the mine plan and working on some of that smoothing in the future right now neither were totally focused on getting this plant up and running that Doug earlier on the call. It's also you went on at that point, Doug did talk about the reconciliation everything's reconciling incredibly well to the block model.
We are finding that we're we have some more tonnes tonnes that would've would've been waste, but actually do meet the criteria of ore. So we will end up with some lower grade stockpiles.
Rather than going to the waste dumps, but in terms of the mine plan and the reconciliation to what we had intended on mining it's actually looking really good. So you know we're early on we're early benches, but in terms of grade reconciliation looking good probably more more tons.
Than had been anticipated and then you.
You know going forward and optimizing the mine will come after we get it into production.
Okay alright, thank you.
The next question comes from Iron lumber with TD Securities. Please go ahead.
Ah. Thanks, operator, I think he might have just answered this but in terms of an updated life of mine plan a feasibility study.
Somewhat dated.
Could we maybe expect one in 2025, where it's kind of focus on the ramp up and Hum will be 2025 bodies and maybe you'll update like mine plans, maybe in 2026 or something just timing on that.
That's our overall timing.
2020, I I'd say yeah.
Sorry go ahead.
Well I was just going to say here and like again totally focused on getting the mine into production right now and then we've got some luxury two to do some of those technical report updates I'm thinking kind of a later end of 2025 before we'd see a fulsome update like that's where the next sort of guidance coming out for 2025 would be a year from now.
<unk> focus on that year and then in 2025, we could look to have a longer term mine plan.
I don't have it anymore.
Perfect and then just on castle, you mentioned permitting for the phase two going into 2026.
You mentioned, you're going to reevaluate, whether there may be a slowdown in phase one and whatnot.
Should we get an update on that in the first half of this year or is that probably in the second half of the year I'm kind of similar to the last few months in terms of timing on a decision for.
For the state is the one clients.
Oh yeah.
Yeah second half dog, yeah, it's in process right now and so the the permitting it looks like we're making some good progress now on the permitting side.
Oh M has been very engaged with US recently, we do expect that that.
That notice of completion and then this notice of intent coming in the relatively near term in our our estimate is that the.
The process beyond the notice of intent will take around two years, so that puts us into that mid 2026 timing for the permit for the expansion and phase.
Phase one is done kind of mentioned, it's it's it's a bit of a development project masquerading as an operating mine to some extent.
The point of it is to maintain the permits and to excavate the existing open pits and and that's what we've been doing and also doing testing on on what this might look like at the.
That would be increased production level.
And with its fairly low grade material that we're processing, we're using a contract a car.
Tractor for mining a contractor for crushing the cost profile is higher than we would prefer so what we're looking at is what makes the most sense given we've probably got two more years of permitting at.
Once we once we build phase two obviously, we're going to have a much larger fleet. It will be a lot cheaper to move this material, but if it makes sense to continue doing it now and we can get it into a situation where we're we're doing it at a reasonable cost that would be sort of first prize for us and we continue on with what we're doing but.
And this at this point, there's no point in you know.
Consuming capital over the next two years for that.
To any extent.
That is a better deal to do it in two years from now so that's what we're looking at and it might it might just be a situation, where we where we reduced the throughput at at Castle Mountain over the next couple of years as we as we prepare for the.
For the expansion.
Got it Super helpful. Thanks, a lot guys.
The next question comes from Jeremy Hoy at Canaccord Genuity. Please go ahead.
Hi, Greg and team.
Thanks for taking my question most of mine have been answered. So one quick one for me and again, it's on timing I appreciate that.
The dialogue I lost the losses related but is there any sort of timeline that that we can keep in mind, our <unk> date.
We can look to for for progress updates on the negotiations.
I don't know I don't think we want to use.
Go ahead Doug.
I think we'll do our best to keep you informed but given that it's the dialogue. It's a it's a back and forth, but I can tell you that long term you know the heap leaches not not the way to go so I mean.
On the I Dunno this year next to it it just makes less sense.
The CIO was actually a cheaper option for us.
Because of the cyanide consumption on the pumping that happens on a on a heap leach so.
It is the time to discuss and to work it through we'd like to obviously have everything wrapped up a S. A P. But we continue to <unk> to engage and.
Try to be as open as we as we can to be able to lay all the cards on the table and to come to an understanding of what makes for the next stage of life of the mine.
Okay I appreciate that color and then it's a fluid situation. Thank you.
Okay.
They've got a follow up question from Wayne Lam at RBC. Please go ahead.
Okay. Thanks, guys I just had one follow up.
I'm just wondering on the impairment testing.
The carrying value of Clo's looks nearly equal to greenstone now and just wondering if that year end testing included updated capital and operating costs versus the 'twenty two a feasibility study and then just curious with the ongoing.
You mean, the negotiations does it become a kind of binary and that there may be a significant write down to be undertaking if you can't get a deal done.
When it's Pete.
The impairment test contemplates a CIL being put in so of course until the CIL has put in and reflects current cost, but as Doug just mentioned.
I L dramatically reduces operating costs there.
And so that I think that probably answers your question on an impairment and then with respect to would we.
Incur a write down Atlas via those if the.
CIL did not proceed.
We likely would but we would obviously have to review that given the.
<unk> stance is when we would have to redo that impairment test.
Okay, I guess I should clarify for accounting purposes.
And I I, Shouldnt and I Shouldnt imply we did an impairment test for accounting purposes, you look first to indicators and if you have an indicator you do an impairment test.
We concluded we did not have any indicators and so there was no impairment test how do we run an impairment test it would incorporate.
The CIL is a better way to answer your question.
Okay, Great. Yeah, hopefully you guys can get a deal done imminently.
Thanks for taking my questions.
Excellent.
We have got another follow up question from Anita Soni at CIBC. Please go ahead hi.
Just another one on greenstone at this time on the call.
<unk> Guide is 850 to $9 50, a sick I assume from that point is it correct that it from the point that it's gonna be declared commercial or is it.
From the first gold pour that CHS you didn't anticipate.
Yeah, that's right I need ads from the point of commercial production.
Okay. So it's that and again that was sometime probably in Q3 right you got to get to the 80%.
That's right.
Okay, and then just in terms of that number. It I was wondering is there any additional costs that maybe I'm being capitalized or put it into another bucket or would they eat 50, denying 50 incorporate all of the costs that that offset in the quarter and in Q4.
If we're going to use that as a run rate.
So the $8 50 to 950 <unk>, the only cost that would exclude and Greg already allude I'm sorry, you may not have been on that Greg alluded to it earlier is the leasing costs related to the initial fleet that we acquire doing construction remains non sustaining but apart from that.
Grabs all the costs.
Okay, perhaps everyday so there's nothing else that's fun, okay, alright, thank you very much.
Thank you.
Do you have a few questions online, but I think they were pretty much all addressed with the questions that were asked from the analysts that I will get back to you all are individually to make sure. He's not got any follow up question. So I think we're going to wrap it up here Greg do you have any closing statements no. Just thanks again, everyone for attending the call and you know where to find us if he's got any additional questions.
The contact information is on our website relenting myself or any of us are always happy to engage with shareholders.
Perfect. Thanks, everybody for joining us. This morning, operator, you can now conclude the call.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
Okay.
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Okay.
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