Q2 2024 Equinox Gold Corp Earnings Call
Thank you for standing by. This is the conference operator. Welcome to the Equinox Gold second quarter 2024 results and corporate update.
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I would now like to turn the conference over to Rhylin Bailie, Vice President Investor Relations for Equinox Gold. Please go ahead. Thank you.
Unknown Executive: Thank you, Gaylene, and thank you, everybody, for joining us today for our Q2 call. Peter and I are dialing in from beautiful Princeton, B.C., because we are two days into the ride to Greenstone. So this is a big, um...
Unknown Executive: Thank you everybody for joining us today for our Q2 call. Peter and I are dialing in from beautiful Princeton, B.C., because we are two days into the ride to Greenstone.
Unknown Executive: Thank you, Gaylene, and thank you everybody for joining us today for our Q2 call. Peter and I are dialing in from beautiful Princeton, B.C. because we are two days into the ride to Greenstone. So this is a big...
Unknown Executive: So this is a big, big day for us. Peter and I are dialing in from beautiful Princeton, B.C. I'm not crossing Canada, I guess I'll cross half of Canada.
Unknown Executive: We're riding from Vancouver to our new mine in Geraldton, Ontario, to celebrate the mine opening but also to raise money for the Geraldton District Hospital, which is the hospital that serves the Greenstone mine workforce and also five Indigenous communities and about a 3,000-square-kilometer region in northern Ontario. So it's going really well so far. It's super exciting.
Unknown Executive: I'm not going to cross Canada, I guess I'll cross half of Canada. We're riding from Vancouver to our new mine in Geraldton, Ontario, to celebrate the mine opening but also to raise money for the Geraldton District Hospital, which is the hospital that serves the Greenstone mine workforce and also five Indigenous communities and about almost a 3,000 square kilometer region in northern Ontario. So it's going really well so far. It's super exciting
Unknown Executive: Across half of Canada, we're riding from Vancouver to our new mine in Geraldton, Ontario to celebrate the mine opening, but also to raise money for the Geraldton District Hospital.
Unknown Executive: which is the hospital that serves the Greenstone Line workforce and also
Unknown Executive: five Indigenous communities, and about almost a 3,000 square kilometre region in northern Ontario. So it's going really well so far, it's super exciting.
Unknown Executive: We've got people from our mine sites in Brazil and the States and in Mexico that have flown up to Canada to join us for the ride. And we're making our way across the country, raising money for the hospital. Like I said, we've raised almost $1.2 million so far thanks to the generosity of our vendors and some industry sponsors. We're also raising money for four schools and a hospital in Brazil and for the Alzheimer's Association of California.
Unknown Executive: We've got people from our mine sites in Brazil and the States and in Mexico that have flown up to Canada to join us for the ride. And we're making our way across the country, raising money for the hospital. Like I said, we've raised almost $1.2 million so far, thanks to the generosity of our vendors and some industry sponsors. We're also raising money for four schools and a hospital in Brazil and for the Alzheimer's Association of California.
Unknown Executive: We've got people from our mine sites in Brazil and the States and in Mexico that have flown up to Canada to join us for the ride.
Unknown Executive: And we're making our way across the country, raising money for the hospital, like I said, we've raised almost $1.2 million so far, thanks to the generosity of our vendors and some industry sponsors.
Unknown Executive: We're also raising money for four schools and a hospital in Brazil and for the Alzheimer's Association of California. So if you're interested in more information about that, you can go to the Ride to Grainstone website or the Equinox Gold website and please do follow the progress as our cyclists make their way across the country.
Unknown Executive: So if you're interested in more information about that, you can go to the Ride to Greenstone website or the Equinox Gold website, and please do follow the progress as our cyclists make their way across the country. After that plug, we'll now turn it over to the conference call. So we will, of course, be making a number of forward-looking statements today. Please do visit our website, CDAR, and EDGAR to learn more about the company. And I'll turn the call over now to our President and CEO, Greg Smith.
Unknown Executive: So if you're interested in more information about that, you can go to the Ride to Greenstone website or the Equinox Gold website. And please do follow the progress as our cyclists make their way across the country.
Unknown Executive: After that plug we'll now turn it over to the conference call so we will of course be making a number of forward-looking statements today. Please do visit our website Cedar and Edgar to learn more about the company and I'll turn the call over now to our President and CEO Greg Smith.
Greg Smith: Thanks, Rhylin. Good morning.
Speaker Change: 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 Hardie, and our EVP of Exploration Scott Heffernan, and of course our VP of Investor Relations who you just heard from Rhylin Bailie.
Greg Smith: And thanks, everyone, for joining the call today. On the line with me is our COO, Doug Reddy, our CFO, Peter Hardie, and our EVP of Exploration, Scott Heffernan. And of course, our VP of Investor Relations, who you just heard from, Rhylin Bailie. Today we are discussing Equinox Gold 2024's second quarter financial and operating results. I'll start with a broad overview of the quarter, and then I'll turn over the call to Pete and Doug for more details. I'm going to start with safety.
Speaker Change: Today we are discussing Equinox Gold's 2024 second quarter financial and operating results. I'll start with a broad overview of the quarter and then I'll turn over the call to Pete and Doug for more details.
Greg Smith: We did unfortunately have a fatality at our fazenda mine in Brazil in June. This is a tragedy for all of us at Equinox, and we extend our deepest sympathies to our employees and also their family, friends, and co-workers. We did have a site-wide suspension of operations at Pazenda in June to facilitate both the investigation and also to refresh our site safety training. On the environmental side, we did not have any significant environmental incidents during the second quarter.
Speaker Change: I'm going to start with safety. We did unfortunately have a fatality at our fazenda mine in Brazil in June . This is a tragedy for all of us at Equinox and we extend our deepest sympathies to our employees and also the family, friends and co-workers.
Unknown Executive: This is a tragedy for all of us at Equinox, and we extend our deepest sympathies to our employees and also to the family, friends, and co-workers. On the environmental side, we did not have any significant environmental incidents during the second quarter. Greenstone has been ramping up largely on plan, with our first gold pour in late May and just over 16,000 ounces produced through the end of June. Production has continued to ramp up, with just under 20,000 ounces produced in July alone at Greenstone.
Unknown Executive: We did have a site-wide suspension of operations at the Zenda in June to facilitate both the investigation and also to refresh our site safety training.
Unknown Executive: On the environment side, we did have no significant environmental incidents during the second quarter.
Greg Smith: And, as previously reported, we published our fiscal 2023 ESG report in May during the quarter. And you can find the report on the Equinox Gold website. So for the quarter, we produced just over 122,000 ounces of gold and sold just over 115,000 ounces at a cash cost per ounce sold of $17.47 and an all-in sustaining cost per ounce sold of $2,041. For the first six months of the year, we produced approximately 234,000 ounces and sold approximately 232,000 ounces at cash costs of $16.53 per ounce and all sustaining costs of $19.93 per ounce.
Unknown Executive: And as previously reported, we published our fiscal 2023 ESG report in May during the quarter, and you can find the report on the Equinox Gold website.
Unknown Executive: So for the quarter, we produced just over 122,000 ounces of gold and sold just over 115,000 ounces at a cash cost per ounce sold of $17.47 and an all-in sustaining cost per ounce sold of $2,041 per ounce.
Unknown Executive: For the first six months of the year, we produced approximately 234,000 ounces and sold approximately 232,000 ounces at cash costs of $16.53 per ounce and all sustaining costs of $19.93 per ounce.
Greg Smith: We did have a few developments during the quarter that affected our production and costs in Q2, and also drove an update to our fiscal 2024 guidance. In mid-May, we completed the acquisition of the 40% of our Greenstone mine that we didn't already own. We spoke about this on the Q1 call and in a couple of press releases, but as a reminder, this transaction delivers full ownership of the Greenstone mine to Equinox Gold and consolidates ownership of Greenstone, which is one of the largest and highest-grade open-pit gold mines of scale in Canada. This transaction is accretive to our cash flow and our EBITDA.
Speaker Change: We did have a few developments during the quarter that affected our production and costs in Q2 and also drove an update to our fiscal 2024 guidance.
Unknown Executive: In mid-May, we completed the acquisition of the 40% of our Greenstone mine that we didn't already own.
Speaker Change: we spoke about this on a q one call and in a couple of press releases but as a reminder this transaction delivers full ownership of the greenstone m to equadox gold and consolidates ownership of greenstone whichis one of the largest highest grade openbitick gold mines up scale in canada
Greg Smith: It delivers substantial near-term value, and it increases the company's average mine life, reserves, and production, all while lowering our consolidated per-ounce operating costs. Greenstone has been ramping up largely on plan, with our first gold pour in late May and just over 16,000 ounces produced through the end of June. Production has continued to ramp up with just under 20,000 ounces produced in July alone at Greenstone. We recently concluded a multi-day shutdown to address various wear and process issues identified through the startup and are now pushing toward achieving commercial production by the end of Q3. With the ramp-up progressing well, we've maintained our guidance for Greenstone with an increase to reflect the consolidation of ownership.
Speaker Change: This transaction is accretive to our cash flow and our EBITDA, it delivers substantial near-term value, and it increases the company's average mine life, reserves, production, all while lowering our consolidated per ounce operating costs.
Unknown Executive: Greenstone has been ramping up largely on plan with our first gold pour in late May and just over 16,000 ounces produced through the end of June . Production has continued to ramp up with just under 20,000 ounces produced in July alone at Greenstone.
Speaker Change: we recently concluded a multidate shutdown to address various ware and process issues identified through the start-up and are now pushing toward achieving commercial production by the end of q three
Speaker Change: With the ramp-up progressing well, we've maintained our guidance for Greenstone with an increase to reflect the consolidation of ownership.
Greg Smith: We previously reported in April that we experienced some geotechnical issues in the south wall of the Piaba open pit at Arizona and that we had temporarily suspended mining in Piaba. We continued to process stockpiled ore through April, and production in Q2 at Arizona primarily reflects processing of this material. We then idled the mill in May and June and accelerated mining in the new Tatejuba open pit. We did begin processing the first ore from Tatajuba in early July.
Unknown Executive: We previously reported in April that we experienced some geotechnical issues in the south wall of the Piaba open pit at Arizona, and that we had temporarily suspended mining in Piaba.
Speaker Change: we continueed to process stockpiled or through april and production in q two orizona primarily reflects processing of this material we then idled the mill and may in june and accelerated mining in the new tatisyou by open pit
Unknown Executive: We did begin processing the first ore from Tatajuba in early July. Mining at Mesquite has been performing well, with recoverable ounces stacked exceeding plan. However, we are seeing slower than expected recoveries off the heat bleach pad from ore stacked in prior periods, in part due to the increasing pad height. Finally, the company has concluded its previously reported assessment of the Phase 1 operations at Castle Mountain, and we've elected to suspend the contract mining and processing at Castle Mountain Phase 1 and transition to residual leach only.
Greg Smith: We are working on mitigation activities to recommence mining in Piata, and this is progressing well. As the timing of starting mining again in Piabit does remain uncertain, guidance for Arizona has been reduced to take into account lost production during the suspension of processing in May and June and also to reflect the lower-grade ore mined primarily from Tatejuba through the remainder of the year. Mesquite 2024 is primarily a stripping year as we pre-strip the ginger pit, which supplies ore to the mine or to the heap in 2025.
Speaker Change: we did begin processing first or fromon tatisu but in earreally july
Unknown Executive: We are working on mitigation activities to recommence mining in Piata and this is progressing well.
Speaker Change: as the timing of starting mining again n pa does remain onuncertain guidance hororizona has been reduced to take into account loss production during the suspension of processing in may june and also to reflect the lower grade or mind primarily from ateggy but through the remainder of the year
Unknown Executive: Mesquite 2024 is primarily a stripping year as we pre-strip a ginger pit which supplies ore to the mine or to the heap in 2025.
Greg Smith: Mining at Mesquite has been performing well, with recoverable ounces stacked exceeding plan. However, we are seeing slower than expected recoveries off the heap leach pad from ore stacked in prior periods, in part due to the increasing pad height. We are working to accelerate production, but we have reduced our 2024 production guidance for Mesquite to account for the slower recovery. Finally, the company has concluded its previously reported assessment of the Phase 1 operations at Castle Mountain, and we've elected to suspend the contract mining and processing at Castle Mountain Phase 1 and transition to residual leach only.
Unknown Executive: mining at mosquie has been performing well with recoverable amounts of stack exceeding plan however we are seeing slower than expected recoveries off a heap each pad from orstack and prior periods in part due to the increasing patadheight
Unknown Executive: we are working to accelerate production but we have reduced our thousand andtwentyfour production guidance from asi to account for the slower recoveries
Unknown Executive: finally the company has concluded its previously reported assessment of the phase one operations of castle mountain and we've elected to suspend the contract mining and processing at castle ountainof phase one and transition to residual leach only
Greg Smith: We will continue to focus on advancing the permitting and engineering of the Phase 2 expansion at Castle. Our guidance has been updated to reflect this change at Castle Mountain, and Castle will be reported as a development project going forward. Of course, we will continue to recover ounces off the pad through the year and into next year. With these changes reflected, consolidated guidance for 2024 has been updated from 660 to 750,000 ounces of gold to 655 to 750,000 ounces of gold, with costs updated to cash costs of 1305 to 1405 per ounce and all sustaining costs of 1635 to 1735 per ounce. This continues to reflect a substantial increase in gold production at much lower costs over the second half of the year. With that, I'll turn it over to Pete to discuss our financial results.
Unknown Executive: We will continue to focus on advancing the permitting and engineering of the Phase 2 expansion at Castle. Our guidance has been updated to reflect this change at Castle Mountain, and Castle will be reported as a development project going forward. Of course, we will continue to recover ounces off the pad through the year and into next year. With these changes reflected, consolidated guidance for 2024 has been updated from 660 to 750,000 ounces of gold to 655 to 750,000 ounces of gold, with costs updated to cash costs of 1305 to 1405 per ounce and all sustaining costs of 1635 to 1735 per ounce.
Unknown Executive: we will continue to focus on advancing permitt and engineering of the phase i expansion that castle our guidance has been updated to reflect this change of castle mountain and castle will be reported as a development project going forward of course we will continue to recover ounces off the pad through the year and into next year
Unknown Executive: With these changes reflected, Consolidated Guidance for 2024 has been updated from 660 to 750,000 ounces of gold.
Unknown Executive: to six hundred fifty five to seven hundred fifty thousand hs of gold
Unknown Executive: with costs updated to cash costs of $13.05 to $14.05 per ounce and all sustaining costs of $16.35 to $17.35 per ounce.
Unknown Executive: This continues to reflect a substantial increase in gold production at much lower costs over the second half of the year.
Speaker Change: with that i'll turn over to pe to discuss ourfinancial results
Peter Hardie: We're now on slide seven in the presentation. During Q2, we sold 115,000 ounces of gold at a realized price of $2,328 per ounce for revenues of $269 million. Total sales included 10,000 ounces sold by Greenstone, and income from mine operations was $27 million. We had $199 million in operating expenses in Q2 2024 compared to $193 million in Q2 2023. Operating expenses in Q2 2024 increased 3% compared to Q2 2023, primarily due to the contribution of operating expenses at Greenstone, which was a construction project in 2023 and did not have operating expenses, and a higher operating expense at Los Feliz, which was driven by an increase in underground mining activity.
Unknown Executive: thank
Unknown Executive: During Q2, we sold 115,000 ounces of gold at a realized price of $2,328 per ounce for revenues of $269 million, although offset by lower operating expenses at Arizona that Greg mentioned earlier. Note that Greenstone is not yet in commercial production. So when you're looking at our cost metrics, the 10,000 ounces it sold along with the related related cost of production are excluded from the calculation of cash cost and all and sustaining cost metrics we reported in Q2. That said, revenues and related operating costs are still reported in the income statement as required by IFRS.
Speaker Change: We're now on slide 7 in the presentation.
Unknown Executive: During Q2 we sold 115,000 ounces of gold at a realized price of $2,328 per ounce for revenues of $269 million. Total sales included 10,000 ounces sold by Greenstone. Income from mine operations was $27 million.
Speaker Change: We had $199 million in operating expenses in Q2 2024 compared to $193 million in Q2 2023.
Unknown Executive: Operating expense in Q2 2024 increased 3% compared to Q2 2023, primarily due to the contribution of operating expense at Greenstone, which was a construction project in 2023 and did not have operating expenses.
Speaker Change: and a higher operating expen lios which was driven by an increase in the onunderground mining activity
Peter Hardie: Offset by lower operating expenses at Arizona that Greg mentioned earlier. On a per unit basis, we had a higher than usual Q2 2024 cash cost of $1,747 an hour. The increase over previous quarters is primarily volume driven due to lower production at Arizona due to the geotechnical issue at the Piava Pits. The same explanation applies to our higher-than-usual, all-in-sustaining cost per ounce for the quarter. Note that Greenstone is not yet in commercial production.
Unknown Executive: Offset by lower operating expense at Arizona that Greg mentioned earlier.
Unknown Executive: On a per-unit basis, we add a higher-than-usual Q2 2024 cash cost of $1,747 an ounce.
Greg: The increase over previous quarters is primarily volume driven with the lower production at Arizona due to the geotechnical issue at the Piava Pit.
Unknown Executive: The same explanation applies to our higher-than-usual, all-in-sustaining cost per ounce for the quarter.
Peter Hardie: So when you're looking at our cost metrics, the 10,000 ounces it sold along with the related related cost of production are excluded from the calculation of cash cost and all and sustaining cost metrics we reported in Q2. That said, revenues and related operating costs are still reported in the income statement as required by IFRS.
Unknown Executive: Note that Greenstone is not yet in commercial production, so when you're looking at our cost metrics, the 10,000 ounces it sold, along with the related cost of production, are excluded from the calculation of cash cost and all in sustaining cost metrics we reported in Q2.
Unknown Executive: That said, the revenues and related operating costs are still reported in the income statement as required by IFRS.
Peter Hardie: Our EBITDA for Q2 2024 was $510 million. Included in EBITDA is a fair value gain on the remeasurement of our Greenstone ownership interest that was recorded when moving from proportionate to full consolidation. For accounting purposes, we record the changes if you sold the 60% ownership interest we had at fair value.
Unknown Executive: Our EBITDA on Q2 2024 was $510 million.
Speaker Change: Included in EBITDA is a fair value gain on remeasurement of our Greenstone ownership interest.
Unknown Executive: that
Unknown Executive: For accounting purposes, we record the changes if you sold the 60% ownership interest we had at fair value. Quarterly repayments will commence on August 13th, 2026, equal to 10% of the then outstanding principal amount with the remaining outstanding principal payable at maturity. For the $500 million term loan, the company was required to have in place 328,000 ounces of gold hedges of our, pardon me, our forward gold production through mid 2026.
Unknown Executive: Recorded when moving from proportionate to full consolidation.
Speaker Change: For accounting purposes, we record the change as if you sold the 60% ownership interest we had at fair value.
Peter Hardie: The gain results from the difference in fair value and the cost that the 60% interest was carried at, and that gain is about $470 million. Our adjusted EBITDA of $51 million for Q2 is the same as Q1 2024, and down $19 million from Q2 2023 is adjusted EBITDA of $71 million. The decrease in adjusted EBITDA in Q2 2024 compared to Q2 2023 was primarily due to the impact of an $8.8 million realized loss on gold contracts in Q2 2024, while we didn't have any in Q2 2023.
Speaker Change: The gain results from the difference in fair value and the cost that the 60% interest was carried at and that gain is about 470 million
Speaker Change: our adjusted ebitda fifty one million for q two the same as q one thousand andtwenty four and down nineteen million from q two two and twentythree adjusted ebitda seventy million
Unknown Executive: The decrease in adjusted EBITDA in Q2 2024 compared to Q2 2023 was primarily due to the impact of an $8.8 million realized loss on gold contracts in Q2 2024. We didn't have any in Q2 2023.
Peter Hardie: In addition, we had a small realized loss on foreign exchange contracts this quarter, whereas in Q2 2023, we had a 9.1 million realized gain on the same. We had net income of $204 million for basic earnings per share, $0.72. 61 cents a share fully diluted; on an adjusted basis, we had a net loss of six million, or one cent. Cash flow from operations before changes in non-cash working capital was $45 million, or $0.12.
Unknown Executive: In addition, we had a small realized loss on foreign exchange contracts this quarter, whereas in Q2 2023, we had a $9.1 million realized gain on the same.
Unknown Executive: We had net income of $204 million for basic earnings per share, $0.72.
Unknown Executive: 61 cents a share fully diluted. On an adjusted basis we had a net loss of six million or one cent per share.
Unknown Executive: Cash flow from operations before changes in non-cash working capital was 45 million or 12 cents a share.
Peter Hardie: With respect to our sustaining spend for Q2, we spent $31 million, which is pretty much in line with what we did in Q1 this year. With regard to Greenstone, with the mine and plant ramping up, Greenstone should now fund itself from a cash flow perspective. For Greenstone on a 100% basis, a total of $1.37 billion of the project to date has been spent on construction and commissioning.
Speaker Change: With respect to our sustaining spend for Q2, we spent $31 million, which is pretty much in line with what we did in Q1 this year.
Speaker Change: With regards to Greenstone, with the mine and plant ramping up, Greenstone should now fund itself from a cash flow perspective.
Speaker Change: For Greenstone, on a 100% basis, a total of $1.37 billion project to date has been spent on construction and commissioning.
Peter Hardie: Equinox's share of that spend was $55 million during the quarter, $109 million year-to-date, and $834 million project-to-date, which excludes capitalized interest and other non-cash amounts capitalized. We had a busy quarter for corporate financing activity to fund the $955 million we needed to acquire the remaining ownership of Greenstone. We amended our existing senior revolving credit facility to arrange a 500 million dollar term loan and completed a bot deal equity financing for gross proceeds of $299 million.
Unknown Executive: Equinox's share of that spend was $55 million during the quarter, $109 million year-to-date, and $834 million project-to-date, which excludes capitalized interest and other non-cash amounts capitalized.
Peter Hardie: We issued 42 million shares directly to Aronement Finance and issued a $40 million promissory note to Aronement Finance that matures in December 2024. Under the terms of the $299 million bought deal equity financing, the company issued 56.4 million shares at $5.30 per share. The $500 million term loan matures on May 13, 2027. No principal repayments are required under the term loan for the first two years of the three-year term.
Unknown Executive: We had a busy quarter for corporate financing activity. To fund the $955 million we needed to acquire the remaining ownership of Greenstone, we amended our existing senior revolving credit facility to arrange a $500 million term loan.
Unknown Executive: Completed a bought deal equity financing for gross proceeds of $299 million. We issued $42 million in shares directly to Orion Finance and issued a $40 million dollar promissory note to Orion Finance that matures in December 2024.
Unknown Executive: Under the terms of the 299 million bought deal equity financing, the company issued 56.4 million shares at $5.30 per share.
Peter Hardie: Quarterly repayments will commence on August 13th, 2026, equal to 10% of the then outstanding principal amount, with the remaining outstanding principal payable at maturity. The company may repay or, pardon me, prepay any portion of the outstanding term loan at any time without penalty. Interest, covenants, and other terms are substantially consistent with the company's existing revolving credit facility, and the terminal benefits from the same security package as the revolving credit facility. During Q2, we also amended two of the convertible notes by extending their maturities by six months.
Unknown Executive: The $500 million term loan matures May 13, 2027. No principal repayments are required under the term loan for the first two years of the three-year term.
Unknown Executive: Quarterly repayments will commence on August 13, 2026, equal to 10% of the then outstanding principal amount, with the remaining outstanding principal payable at maturity. The company may repay, or pardon me, prepay, any portion of the outstanding term loan at any time without penalty.
Unknown Executive: Interest, covenants, and other terms are substantially consistent with the company's existing revolving credit facility and the terminal benefits from the same security package as the revolving credit facility.
Peter Hardie: The maturity date of the 2019 convertible notes was extended from April 12 of this year to October 12, and the maturity date of the 2020 convertible notes was extended from March 10, 2025 to September 10, 2025. In addition, the conversion price of the 2020 convertible notes was amended from $7.80 per share to $6.50. For the $500 million term loan, the company was required to have in place 328,000 ounces of gold hedges of our, pardon me, our forward gold production through mid 2026.
Unknown Executive: During Q2, we also amended two of the convertible notes by extending their maturities by six months.
Unknown Executive: The maturity date of the 2019 convertible notes was extended from April 12th of this year to October 12th, and the maturity date of the 2020 convertible notes was extended from March 10th, 2025 to September 10th, 2025.
Unknown Executive: In addition, the conversion price of the 2020 convertible notes was amended from $7.80 per share to $6.50 per share.
Unknown Executive: For the 500 million dollar term loan, the company was required to have in place 328,000 ounces of gold hedges of our, pardon me, of our forward gold production through mid-2026.
Peter Hardie: Company Elect, and we already had some of those gold hedges in place for the second half of this year that we added to. Company elected to weight the hedges into the next 12 months using gold collars. The collars are arranged as follows.
Speaker Change: The company elect and we already had some of those gold hedges in place for the second half of this year that we added to
Peter Hardie: For the second half of 2024, there are 188,000 ounces hedged with a floor of 2150 and a ceiling of 2738 per ounce. For the first half of 2025, there are 100,000 ounces hedged with a floor of 2,189 and a ceiling of $2,905. For the second half of 2025, 20,000 ounces with a floor of 2,100 and a ceiling of 3,487 per ounce.
Unknown Executive: The company elected to weight the hedges into the next 12 months using gold collars. The collars are arranged as follows.
Unknown Executive: For the second half of 2024, there are 188,000 ounces hedged with a floor of 2,150 and a ceiling of 2,738 per ounce.
Unknown Executive: For the first half of 2025, there will be 100,000 ounces hedged with a floor of 2,189 and a ceiling of $2,905. Moving to slide nine. With Greenstone construction complete and commercial production on the near horizon, the financial focus switches to deleveraging. Free cash flow produced by the mines will be used to pay down debt.
Unknown Executive: For the first half of 2025, there's 100,000 ounces hedged with a floor of $2,189 and a ceiling of $2,905 an ounce.
Unknown Executive: And for the second half of 2025, 20,000 ounces with a floor of 2,100 and a ceiling of 3,487 per ounce. And finally, for the first half of 2026, also 20,000 ounces with a floor of 2,100 an ounce and a ceiling of 3,487 per ounce.
Peter Hardie: And finally, for the first half of 2026, also 20,000 ounces, with a floor of 2,100 an ounce and a ceiling of 3,487 percent, just with respect to those convertible notes. Extending the notes, the maturity of those two converter motes significantly enhances their financial flexibility as we advance the commissioning of our world-class Greenstone gold mine, which remains on track to pour gold this quarter. Moving to slide 8, with respect to our available liquidity at June 30th, we had $160 million of unrestricted cash on hand and $105 million available to draw on a revolving credit facility.
Speaker Change: Just with respect to those convertible notes...
Unknown Executive: Extending the notes, the maturity of those two convertible moats significantly enhances our financial flexibility as we advance commissioning of our world-class Greenstone gold mine, which remains on track to pour gold this quarter.
Unknown Executive: Moving to slide 8. With respect to our available liquidity at June 30th, we had $160 million of unrestricted cash on hand and $105 million available to draw on a revolving credit facility.
Peter Hardie: The first of our debt maturity comes in October with the 140 million 2019 convertible note I just mentioned. It has a conversion price of $5.25 per share. Should the note holders decide not to convert, the company will repay the note using its existing cash and liquidity. Moving to slide nine.
Unknown Executive: The first of our debt maturities comes in October with $140,000,019 convertible note I just mentioned. It has a conversion price of $5.25 per share. Should the note holders decide not to convert, the company will repay the note using its existing cash and liquidity.
Peter Hardie: With Greenstone construction complete and commercial production on the near horizon, the financial focus switches to deleveraging. Free cash flow produced by the mines will be used to pay down debt. For the first few years at Equinox Gold, we've been acquiring and building minds and have been using debt as one of the funding methods for doing so, including an additional $500,000,000 term loan to consolidate our greenstone ownership. This slide demonstrates Equinox Gold's historical leverage as measured by net debt to EBITDA ratio from Q1 2020 through Q4 2023 and pro forma leverage through 2026, as per an analyst. The general trend we see is that leverage in the company increased as acquisitions were completed and mines were being built.
Unknown Executive: Moving to slide 9. With Greenstone construction complete and commercial production on the near horizon, the financial focus switches to deleveraging. Free cash flow produced by the mines will be used to pay down debt.
Speaker Change: For the first few years at Equinox Gold, we've been acquiring and building mines and have been using debt as one of the funding methods for doing so, including an additional $500 million term loan to consolidate our greenstone ownership.
Unknown Executive: This slide demonstrates Equinox Gold's historical leverage as measured by net debt to EBITDA ratio from Q1 2020 through Q4 2023, and pro forma leverage through 2026 as per analyst consensus.
Unknown Executive: The general trend we see is that leverage in the company increased as acquisitions were completed and mines were being built. This is a natural consequence of using debt as one lever for funding acquisitions and construction.
Speaker Change: leverage peaked in q one two thousand and twentya few months after construction of izona was completed and again inlatetwo thousand and twenty two is construction greenstone was ongoing and construction of the sanaloseis man is completed
Speaker Change: Another trend we see in this chart is that as the mines are commissioned and ramped up, that leverage decreases, as Equinox Gold has the benefit of EBITDA and cash flow generated by the new mines, and we expect the same as Greenstone enters into commercial production hopefully later this quarter.
Unknown Executive: With that, I turn the presentation over to Doug for a review of the operations.
Unknown Executive: Thanks, Pete. We're now on slide 11 of the presentation. At the Mesquite Mine, gold production was 17,607 ounces with an all-in sustaining cost of $1,283 per ounce. We completed a review of the mine plan and costs at Castle Mountain for phase one and concluded that mining will be suspended in August for the duration of phase two permitting. The productivity program that's been in place at Los Feliz for the last two years continues to show improvement, and we saw an increase in Los Feliz underground mine production continue in Q2.
Doug Reddy: Thanks, Pete. We're now on slide 11 of the presentation. At the Mesquite Mine, gold production was 17,607 ounces, with an all-in sustaining cost of $1,283 per ounce. Waste stripping continued in the ginger pit, and the majority of the ore from that pit went to leach pads starting in Q1 of 2025. For the rest of 2024, production is mostly a drawdown of the leach pad inventory, side slope leaching, and leaching of additional ore coming from current mining and re-handling and re-leaching of the old Vista pad material. However, recoveries from the leach pad have been slower than expected due to pad height and associated longer leach cycles.
Unknown Executive: Thanks Pete. We're now on slide 11 of the presentation.
Unknown Executive: At the Mesquite Mine, gold production was 17,607 ounces, with an all-in sustaining cost of $1,283 per ounce.
Speaker Change: Waste stripping continued in the ginger pit, and the majority of the ore from that pit goes to leach pads starting in Q1 of 2025.
Unknown Executive: For the rest of 2024, production is mostly drawdown of the leach pad inventory, side slope leaching and leaching of additional ore coming from current mining, and re-handling and re-leaching of the old VISTA pad material.
Unknown Executive: The recoveries from the leach pad have been slower than expected due to pad height and associated longer leach cycles.
Doug Reddy: At Castle Mountain, production was up over Q1 at 6,148 ounces at an all-in sustaining cost of $1,424 per ounce. Phase one is a small operation that is mining and processing low-grade historic backfill material that needs to be removed from the old open pits prior to mining in-situ material in phase two. We completed a review of the mine plan and costs at Castle Mountain for Phase 1 and concluded that mining will be suspended in August for the duration of the Phase 2 permitting process, although residual leaching will continue through 2024.
Unknown Executive: At Castle Mountain, production was up over Q1 at 6,148 ounces at an all-in sustaining cost of $1,424 per ounce.
Unknown Executive: Phase 1 is a small operation that is mining and processing low-grade historic backfill material that needs to be removed from the old open pits prior to mining in-situ material in Phase 2.
Unknown Executive: look
Unknown Executive: We completed a review of the mine plan and costs at Castle Mountain for Phase 1 and concluded that mining will be suspended in August for the duration of the Phase 2 permitting.
Doug Reddy: And we continue with the phase two permitting process. At Los Feliz, production increased during Q2 to 37,430 oz, and this should continue to improve in H2. The all-in sustaining cost was $2,274 per ounce.
Unknown Executive: Residual leaching will continue through 2024.
Unknown Executive: And we continue with the Phase 2 permitting process.
Unknown Executive: At Los Feliz, production increased during Q2 to 37,430 ounces, and this should continue to improve in H2.
Speaker Change: the all and sustaining cost was two thousand two hundred and seventy-four dollars perms
Doug Reddy: During the quarter, the crusher was brought back online, and all the material for crushing that it accumulated while the relocation of the conveyor was underway was then crushed and is now under lease. The productivity program that's been in place at Los Feliz for the last two years continues to show improvement, and we saw an increase in Los Feliz underground mine production continue in Q2. Mining in the new Diego's underground area has also been picking up once the second contractor started development work in the quarter. Our dialogue with our community partners continues. We continue to work towards establishing new agreements so that we can ensure long-term economic viability and stability for the mine. We move on to the next page. Excuse me.
Unknown Executive: During the quarter, the crusher was brought back online and all the material for crushing that it accumulated while the relocation of the conveyor was underway was then crushed and is now under leach.
Unknown Executive: The productivity program that's been in place at Los Feliz for the last two years continues to show improvement, and we saw an increase in Los Feliz underground mine production continue in Q2.
Unknown Executive: Mining in the new Diego's underground area has also been picking up once the second contractor started development work in the quarter. In Brazil, at the Arizona mine, production was 6,309 ounces with a very high all-in sustaining cost of over $3,000 per ounce. We accelerated the startup of TataJubo from Pitt, and after two months with no ore processing, we restarted the process plant at the beginning of July. At the Fazenda mine, regrettably, we had a fatality in the underground portion of the mine, as discussed earlier in the call. Production at Fazenda was 14,178 ounces, and the all-in sustaining cost was $1,876 per ounce for the quarter.
Unknown Executive: Mining in the new Diego's underground area has also been picking up once the second contractor started development work in the quarter.
Unknown Executive: Our dialogue with our community partners continues. We continue to work towards establishing new agreements so that we can ensure long-term economic viability and stability for the mine.
Doug Reddy: In Brazil, at the Arizona mine, production was 6,309 ounces with a very high all-in-sustaining cost of over $3,000 per ounce. This reflects the standby costs that were being incurred while the plant was idle and the low ounces produced in the quarter, which resulted in a high cash cost and all-in sustaining cost. As previously announced and mentioned earlier in this call, we suspended mining in the Piava Open Pit in April after geotechnical instability led to the displacement of material in two locations in the south wall of the Piava Pit.
Speaker Change: We move on to the next page, excuse me
Speaker Change: in brazil at the orizona mine production was six thousand and three hundred nine nounces with a very high own sustaining cost over three thousand dollars browns
Unknown Executive: This reflects the standby costs that were being incurred while the plant was idle and the low ounces produced in the quarter, which resulted in a high cash cost and all-in sustaining cost.
Speaker Change: As previously announced and mentioned earlier in this call, we suspended mining in the Piava Open Pit in April after geotechnical instability led to the displacement of material in two locations in the south wall of the Piava Pit.
Doug Reddy: We accelerated the startup of the Tata Juba Open Pit, and after two months with no ore processing, we restarted the process plant at the beginning of July. We continue working on remediation planning and activities in the Puyallupan Pit, with safety being the priority. Work at the moment on Piava includes a re-contouring of the pit wall that will happen in two areas. We are drilling a series of dewatering holes, and we've been installing additional monitoring equipment and completing external reviews of geotechnical and hydrogeological information.
Unknown Executive: We accelerated the startup of Tata Juba Open Pit, and after two months with no ore processing, we restarted the process plant at the beginning of July .
Speaker Change: we continue to work on remediation planning and activities in the pvo compeit with safety being the priority
Unknown Executive: Work at the moment on Piava includes a re-contouring of the pit wall that will happen in two areas.
Unknown Executive: we are drilling series of dewatering holes and we've been install installing additional monitoring equipment and completing external reviews of geotechnical and hydrogeological information
Doug Reddy: At the Fazenda mine, regrettably, we had a fatality in the underground portion of the mine, as discussed earlier in the call. Production at Fazenda was 14,178 ounces, and the all-in sustaining cost was $1,876 per ounce for the quarter.
Unknown Executive: yeah
Speaker Change: At the Fazenda mine, regrettably, we had a fatality in the underground portion of the mine as discussed earlier in the call.
Unknown Executive: Production at Fazenda was 14,178 ounces and the all-in sustaining cost was $1,876 per ounce for the quarter.
Doug Reddy: Plant feed is currently 35% from open pit, 65% from underground, and recovery is at 91%. Currently, mining is approximately 50-50 open pit and underground. The Open Pit Contractor is now fully mobilized at Fazenda and is catching up on the mine plan through the rest of the year. In the underground mine, we are mobilizing additional equipment to facilitate a catch-up on development so that we can access additional stoves in Q3 and Q4.
Unknown Executive: Plant feed is currently 35% from open pit, 65% from underground, and recovery is at 91%.
Unknown Executive: Currently, mining is approximately 50-50 open pit and underground. The open pit contractor is now fully mobilized at Pazenda and is catching up on the mine plan for the rest of the year. In the underground mine, we are mobilizing additional equipment to facilitate a catch-up on development so that we can access additional stopes in Q3 and Q4. At Santa Luz, production was up compared to Q1 at 13,627 ounces, and the all-in sustaining cost was $2,399 per ounce.
Unknown Executive: currently mining is approximately fifty fifty open fit and undergound
Unknown Executive: The open pit contractor is now fully mobilized at Fazenda and is catching up on the mine plan through the rest of the year.
Unknown Executive: In the underground mine, we are mobilizing additional equipment to facilitate a catch-up on development so that we can access additional stopes in Q3 and Q4.
Doug Reddy: At RDM, gold production was 10,675 ounces, and the all-in sustaining cost was $1,774 per ounce. We changed the rental mining fleet and are catching up on the mining in H2. Construction of the dry stack tailings area is complete and is now fully operational with cyclone tailings being dried and placed in the storage area. At Santa Luz, production was up compared to Q1 at 13,627 ounces, and an all-in sustaining cost was $2,399 per ounce.
Unknown Executive: At RDM, gold production was 10,675 ounces, and the all-in-sustaining cost was $1,774 per ounce.
Unknown Executive: We changed the rental mining fleet and are catching up on the mining in H2.
Unknown Executive: Construction of the dry stack tailings area is complete and is now fully in operation with cyclone tailings being dried and placed in the storage area.
Unknown Executive: Recovery was below plan at 60% for Q2, but elution efficiency and electrowinning modifications were completed in the quarter. SAG mill liners and a new trunnion were installed. The new trunnion has enabled throughput to be increased by about 10%, and a new de-sliming circuit was added. The de-sliming circuit is intended to remove a portion of the total organic carbon and improve overall recovery by about
Doug Reddy: Recovery was below plan at 60% for Q2, but elution efficiency and electrowinning modifications were completed in the quarter. SAG mill liners and a new trunnion were installed. The new trunnion has enabled throughput to be increased by about 10%, and a new de-sliming circuit was added. The de-sliming circuit is intended to remove a portion of the total organic carbon and improve overall recovery by about
Speaker Change: at santal los production was up compared to q one to thirteen thousand six hundred and twenty seven ounances and an all in sustaining cost of was two thousand and three hundred ninety nine dollars prounts recovery was below plan at sixty percent four q two
Unknown Executive: Illusion efficiency and electrowinning modifications were completed in the quarter. SAG mill liners and a new trunnion were installed. The new trunnion has enabled throughput to be increased by about 10%.
Unknown Executive: and a new de-sliming circuit was added. The de-sliming circuit is intended to remove a portion of the total organic carbon and improve overall recovery by about 6%. The circuit was brought online and is in commissioning through Q3.
Unknown Executive: The circuit was brought online and is in commissioning through Q3. Moving on to page 13, at Greenstone, the first ore was introduced to the high pressure grinding rolls and grinding circuits on April 6, and milling throughput achieved a rolling 30 day average of 59% of the nameplate of 27,000 tons per day as of July 22. And as we came to the end of the month, we had our planned shutdown, a major shutdown, and we were up and running back on schedule after that shutdown was completed.
Doug Reddy: The circuit was brought online and is in commissioning through Q3. The objective is to achieve recoveries around 73% or higher for the second half of the year. Moving on to page 13, at Greenstone, the first ore was introduced to the high-pressure grinding rolls and grinding circuits on April 6. The first gold pour was on May 22nd, and the mine poured, produced 16,247 ounces in Q2. Milling throughput achieved a rolling 30 day average of 59% of the nameplate of 27,000 tons per day as of July 22.
Unknown Executive: The objective is to achieve recoveries around 73% or higher for the second half of the year.
Unknown Executive: Moving on to page 13.
Unknown Executive: At Greenstone, first ore was introduced to the high-pressure grinding rolls and grinding circuits on April 6.
Unknown Executive: The first gold pour was on May 22nd and the mine poured, produced 16,247 ounces in Q2.
Unknown Executive: Milling throughput achieved a rolling 30-day average of 59% of the nameplate of 27,000 tons per day as of July 22.
Doug Reddy: And as we came to the end of the month, we had our planned shutdown, a major shutdown, and we were up and running back on schedule after that shutdown was completed. Overall, the ramp-up is going very well. We mined over 7 million tons in the quarter, with over 1.2 million tons of that being ore. The stockpile was 2 million tons at the end of the quarter. The fleet now has 25 haul trucks and four shovels, and we look forward to commercial production during Q3.
Unknown Executive: And then as we came to the end of the month, we had our planned shutdown, major shutdown, and we were up and running back on schedule after that shutdown was completed.
Unknown Executive: Overall, the ramp-up is going very well. We mined over 7 million tons in the quarter, with over 1.2 million tons of that being ore. The stockpile was 2 million tons at the end of the quarter. The fleet now has 25 haul trucks and four shovels.
Unknown Executive: Overall the ramp-up is going very well. We mined over 7 million tons in the quarter with over 1.2 million tons of that being ore. Stockpile was 2 million tons at the end of the quarter.
Unknown Executive: The fleet now has 25 haul trucks and 4 shovels.
Greg Smith: So with that, I'm going to hand it back to Greg.
Unknown Executive: And we look forward to commercial production during Q3.
Greg Smith: Thanks, Doug. Yeah, it's been a mixed, mixed quarter for us. We've had to work through some challenges that were on a few of our minds, and particularly at Arizona, and we've had to make some revisions to our guidance as a result, but also a very positive quarter for the company in that we were able to complete the acquisition of the rest of Greenstone, achieve the first gold pour, and then start the ramp up toward commercial production. And really, we're at an inflection point now.
Speaker Change: So with that, I'm going to hand it back to Greg.
Unknown Executive: Yeah, it's been a mixed, mixed quarter for us. We've had to work through some challenges that are on our minds, and particularly at Arizona, but also a very positive quarter for the company in that we were able to complete the acquisition of the rest of Greenstone, achieve the first gold pour, and then start the ramp up toward commercial production. And really, we're at an inflection point now; we expect a stronger second half from a number of our mines.
Unknown Executive: It's been a mixed quarter for us. We've had to work through some challenges in a few of our mines, particularly at Arizona, and we've had to make some revisions to our guidance as a result.
Unknown Executive: but also a very positive quarter for the company in that we were able to complete the acquisition of the rest of Greenstone, achieve first gold pour, and then start the ramp up toward commercial production.
Unknown Executive: But more importantly, Greenstone is ramping up to commercial production over the next few months, and we already produced more gold at Greenstone in July than we did in all of Q2. So the big picture here is we are significantly increasing our production at lower costs during a period of historically strong gold prices and what we think is a continuing bullish macro outlook for gold. And I think I'll wrap it up there and turn it over to Rhylin to start the Q&A.
Greg Smith: We expect a stronger second half from a number of our mines. But more importantly, Greenstone is ramping up to commercial production over the next few months. And we already produced more gold at Greenstone in July than we did in all of Q2. So the big picture here is we are significantly increasing our production at lower cost during a period of historically strong gold prices and what we think is a continuing bullish macro outlook for gold. I think I'll wrap it up there and turn it over to Rhylin to start the Q&A.
Speaker Change: And really, we're at an inflection point now. We expect a stronger second half from a number of our mines, but more importantly, Greenstone is ramping up to commercial production over the next few months, and we already produced more gold at Greenstone in July than we did in all of Q2.
Unknown Executive: So the big picture here is we are significantly increasing our production at lower cost during a period of historically strong gold prices and what we think is a continuing bullish macro outlook for gold. And I think I'll wrap it up there and turn it over to Rhylin to start the Q&A.
Rhylin Bailie: Thanks, Greg and Doug. Gaylene, can you please ask or remind our participants how to ask a question?
Rhylin Bailie: Thanks, Greg and Doug. Gaylene, can you please ask or remind our participants how to ask a question?
Rhylin Bailie: Thanks Greg and Doug. Gaylene, can you please remind our participants how to ask a question?
Operator: Once again, to join the question queue, you may press star and then one on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. If you're 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, or pause for a moment as callers join the queue.
Gaylene: Certainly. Once again, to join the question queue, you may press star then 1 on your telephone keypad. You'll hear a tone acknowledging your request.
Gaylene: If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then 2. If you're 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.
Unknown Executive: The operator pauses for a moment as callers join the queue.
Rhylin Bailie: Okay, so I do have a few questions from online. So one that came in first, we'll ask first: how are you going to catch up in the second half of the year to achieve your guidance?
Speaker Change: We'll pause for a moment as callers join the queue.
Rhylin Bailie: Okay, so I do have a few questions from online. So one that came in first, we'll ask first. How are you going to catch up in the second half of the year to achieve your guidance?
Greg Smith: Sure, I can take that. I mean, the main plan here, Rhylin, as you can see from the guidance is that most of our sites will have a stronger second half of the year, particularly Los Feliz and, of course, Greenstone, as we ramp up to commercial production. You know, Greenstone is a very large mine, and production of Greenstone definitely moves the needle for us. So yeah, in the second half of the year, we'll produce a lot more gold than we did in the first half. Okay, Mike Perkin.
Unknown Executive: Sure, I can take that. The main plan here, Rhylin, as you can see from the guidance, is that most of our sites will have a stronger second half of the year, particularly Los Feliz, and of course, Greenstone, as we ramp up to commercial production. You know, Greenstone is a very large mine, and production of Greenstone definitely moves the needle for us. So yeah, in the second half of the year, we'll produce a lot more gold than we did in the first half.
Unknown Executive: Sure, I can take that.
Unknown Executive: I mean, the main plan here, Rhylin, as you can see from the guidance, is that most of our sites will have a stronger second half of the year, in particularly Los Feliz and of course Greenstone as we ramp up to commercial production.
Unknown Executive: You know, Greenstone is a very large mine and production of Greenstone definitely moves the needle for us. So, yeah, the second half of the year we'll produce a lot more gold than we did in the first half.
Unknown Executive: Okay, Mike Perkin sent me a question. He's our analyst from National Bank sent me a question by email. This is for Peter.
Rhylin Bailie: Okay, Mike Perkin sent me a question. He's our analyst from National Bank sent me a question by email. This is for Peter.
Unknown Executive: Okay, Mike Perkin sent me a question. He's our analyst from National Bank sent me a question by email. This is for Peter. What will Castle Mountain Care maintenance costs be on an annual basis? Will there be any severance payments? And if so, how much and when will those throw flow through the financials?
Peter Hardie: What will Castle Mountain Care's maintenance costs be on an annual basis? Will there be any severance payments? And if so, how much and when will those flow through the financials?
Unknown Executive: What will Castle Mountain Care's maintenance costs be on an annual basis? Will there be any severance payments? And if so, how much and when will those flow through the financials?
Mike Perkin: Thanks Mike. I'll start with the later part. Yes, there will be severance payments. We will, we haven't...
Peter Hardie: We will, we haven't, updated the market guidance on what care maintenance will look like heading into next year and beyond, and we'll do so when we update guidance or perhaps earlier than that.
Unknown Executive: updated the market provided guidance on what care maintenance will look like heading into next year and beyond, and we'll do so when we when we update guidance or perhaps earlier than that with respect to the remainder of the year will be residual leaching, so the guidance that we provided for Castle Mountain effectively takes us through the point at which we go onto residual leach, which will be sometime during Q3. We expect to continue to pull ounces from the pad for several months after, and we'll provide a more comprehensive update on those costs as we move forward. It will depend in part on when the residual leach tapers off and when it no longer is beneficial to continue to residual leach.
Unknown Executive: updated the market provided
Unknown Executive: guidance on what care means will look like heading into next year and beyond.
Unknown Executive: and we'll do so when we when we update guidance or perhaps earlier than that.
Peter Hardie: With respect to the remainder of the year, we'll be residual leaching. So the guidance that we provided for Castle Mountain effectively takes us through the point at which we go on to residual leach, which will be sometime during Q3. We expect to continue to pull ounces from the pad for several months after, and we'll provide a more comprehensive update on those costs as we move forward. It will depend in part on when the residual leach tapers off and when it no longer is beneficial to continue to residual leach based on the ounces being pulled and the cost to do it. Thank you.
Unknown Executive: With respect to the remainder of the year, we'll be residual leaching. So the guidance that we provided for Castle Mountain effectively takes us through the point at which we go on to residual leach.
Unknown Executive: We
Unknown Executive: which will be sometime during Q3. We expect to continue to pull ounces from the past.
Unknown Executive: you know, for several months after.
Unknown Executive: And we'll provide a more comprehensive update on those costs as we move forward. It will depend in part on when the residual leach tapers off and when it no longer is beneficial to continue to residual leach based on the ounces being pulled and the cost to do it.
Peter Hardie: Thank you, Peter.
Doug Reddy: I'll just add to that, at Castle Mountain, our mining and our crushing are contractors, so those contract terminations have been provided to the contractors, and we have a very small team overall who will continue to work on the residual leaching. So it is quite a compact and small operation, and it remains a small team as we move into residual leaching.
Speaker Change: Okay. Thank you, Peter.
Speaker Change: I'll just add to that, that at Castle Mountain, our mining and our crushing is contractors.
Unknown Executive: Contract terminations have been provided to the contractors and we have a very small team overall who will continue to work on the residual leaching so it is it is quite a compact and small operation or remains a small team as we move into residual leach.
Doug Reddy: Yeah, thanks, Doug. Thank you.
Rhylin Bailie: A question from our Kerry Smith, our analyst at Haywood Securities, who is currently on an airplane. When do you expect to be able to get back into mining at Paiaba? And how many tons of ore or ounces of production do you have at Tatajuba?
Speaker Change: Thanks Doug. Thank you. A question from our Kerry Smith, our analyst at Haywood Securities, who is currently on an airplane. When do you expect to be able to get back into mining at Paiaba and how many tons of ore or ounces of production do you have at Tata Juba?
Unknown Executive: So, to return to mining in Piava, we're doing work in Piava now, but it's in the upper areas of the pit. We will, during the course of this year, be going in and mining certain areas, especially on the west end of Piava's open pit. The overall plan is based on doing all the dewatering program and all the geotechnical and recontouring activities. We would like to be doing some additional mining in Piava Pit by the end of this year, but the real focus is going to be doing a large program in 2025.
Doug Reddy: So, to return to mining in Piava, we're doing work in Piava now, but it's in the upper areas of the pit. We will, during the course of this year, be going in and mining certain areas, especially on the west end of Piava's open pit. The overall plan is based on doing all the dewatering program and all the geotechnical and recontouring activities. We would like to be doing some additional mining in Piava Pit by the end of this year, but the real focus is going to be doing a large program in 2025.
Unknown Executive: So, for return to mining in Piava, we're doing work in Piava now, but it's at the upper areas of the pit.
Unknown Executive: We will, during the course of this year, be going in and mining certain areas, especially on the west end of Puyallup and Pitt. Overall plan is based on doing all the dewatering program and all the geotechnical and re-contouring activities.
Speaker Change: Thank you.
Unknown Executive: We would like to be doing some additional mining in Piava Pit by the end of this year.
Unknown Executive: But the real focus is going to be doing a large program in 2025. But again, it all is dependent on working through all of our...
Unknown Executive: But again, it all depends on working through all of our activities that we're doing to remediate and make the pit totally safe, keep the regulators totally informed, and being able to move in and be able to mine, especially on the east end of the pit.
Doug Reddy: But again, it all depends on working through all of our activities that we're doing to remediate and make the pit totally safe, keep the regulators totally informed, and being able to move in and be able to mine, especially on the east end of the pit.
Unknown Executive: activities that we're doing to remediate and make the pit totally safe, keep the regulators totally informed, and being able to move in and be able to mine, especially on the east end of the pit.
Operator: Thank you, Doug. Operator, can we please take some questions from the phone?
Unknown Executive: Thank you, Doug. Operator, can we please take some questions from the phone?
Operator: Certainly. The first question from the phone line is from Anita Soni with CIBC World Markets. Please go ahead. Hi, good morning.
Operator: Certainly. The first question from the phone line is from Anita Soni with CIBC World Markets. Please go ahead. Hi, good morning.
Speaker Change: Thank you, Doug. Operator, can we please take some questions from the phone?
Speaker Change: Certainly. The first question from the phone lines is from Anita Soni with CIBC World Markets. Please go ahead.
Anita Soni: Hi, good morning, everyone. For the first question, I think I'm going to focus on Greenstone.
Anita Soni: Hi, good morning, everyone. First question, I think I'm going to focus on Greenstone. When we look at the throughput rates that you delivered this quarter, can you just give us a little idea of how that ramped up over the course of the year, or sorry, over the course of the quarter, and what the exit rates are right now in throughput?
Anita Soni: Hi, good morning, everyone. First question, I think I'm going to focus on Greenstone.
Anita Soni: When we look at the throughput rates that you delivered this quarter, can you just give us a little idea of how that ramped up over the course of the year, I'm sorry, over the course of the quarter and what the exit rates are right now in throughput?
Unknown Executive: So, April, May, we were 40, 50% of rated throughput, and came up to just under 60% as we came into July. Then we had a major shutdown, so we've taken care of a lot of the items that we've noticed during the ramp-up, and we'll continue, we've restarted, and continue with the ramp-up in August. I'm sure, but I'm not sure exactly what other details they were looking for.
Doug Reddy: So, April, May, we were 40, 50% of rated throughput, and came up to just under 60% as we came into July. Then we had a major shutdown, so we've taken care of a lot of the items that we've noticed during the ramp-up, and we'll continue, we've restarted, and continue with the ramp-up in August. I'm sure, but I'm not sure exactly what other details they were looking for.
Unknown Executive: So
Unknown Executive: April , May we were 40, 50 percent of rated throughput, came up to just under 60 percent as we came
Unknown Executive: into July . Then we had a major shut, so we've taken care of a lot of the items that we've noticed during the ramp-up.
Unknown Executive: And we'll continue, we've restarted and continue with the ramp up in August . I'm sure, I'm not sure exactly what the other details they were looking for.
Unknown Executive: No, that's good. Another question in terms of the definition of commercial production. I noticed it said within 10% of the design grade. You guys are substantially over the design grades. And I have a second question related to that in a second. But does that mean that when you're looking for commercial production, you're looking for it to come down to the sort of 1.5 that you were expecting over the next, I guess, three, four years rather than the 2.5 that you delivered this quarter?
Greg Smith: No, that's good. Another question in terms of the definition of commercial production. I noticed it said within 10% of the design grade. You guys are substantially over the design grades. And I have a second question related to that in a second. But does that mean that when you're looking for commercial production, you're looking for it to come down to the sort of 1.5 that you were expecting over the next, I guess, three, four years rather than the 2.5 that you delivered this quarter?
Unknown Executive: No, that's good. Another question in terms of the definition of commercial production. I noticed it said within 10% of the design grade.
Unknown Executive: You guys are substantially over the design grades, and I have a second question related to that in a second. But does that mean that when you're looking for commercial production, you're looking for it to come down to the sort of 1.5 that you were expecting over the next year?
Greg Smith: Yeah, it won't continue at the 2.5. I mean, that was essentially, as you'll be aware, putting a lot of ounces that go into the circuit, you know, and that was done while we had the ability to feed some high-grade material and be able to add that to the mill. And going forward, it will be tempered down to more of the targeted production, and overall production rate. So it won't continue at 2.5. That would be glorious, but we can't do that forever.
Unknown Executive: I guess, three, four years.
Speaker Change: rather than the 2.5 that you delivered this quarter? Yeah, it won't continue at the 2.5. I mean, that was essentially, as you'll be aware, putting a lot of ounces that go into the circuit, you know, and that was done where we had the ability to feed some high-grade material and be able to add that into the mill.
Speaker Change: And going forward, we'll get tempered down to more of the targeted production, overall production rate. So it won't continue at 2.5. That would be glorious, but we can't do that forever.
Greg Smith: It was a good surprise; I didn't hold my breath that it was going to be sustained.
Speaker Change: It was it was a good surprise. I was uh, but you know, I didn't hold my breath that it was going to be Was going to be sustained Yeah, I anticipated that somebody would do the do the calc and say how come you your ounces produced and you have 88% Recovery, but if you look at the number of ounces that go into circuit then it all makes sense and by putting in the higher grade we took care of
Greg Smith: Yeah, I anticipated that somebody would do the calc and say, "How come you have your ounces produced, and you have 88% recovery?" But if you look at the number of ounces that go into the circuit, then it all makes sense. And by putting in a higher grade, we took care of building up the ounces.
Unknown Executive: Yeah, I anticipated that somebody would do the calc and say, "How come you have your ounces produced and you have 88% recovery?" But if you look at the number of ounces that go into the circuit, then it all makes sense. And by putting in the higher grade, we took care of building up the ounces and circuit very quickly.
Doug Reddy: Okay, and then as we get to the, so doing some calculations on the mining and the ore stockpile rates, I think, can you just talk about the truck availability? I think you're getting around 2 million tons per. Trucks. I did the math right on that per annum, if you annualize it. And our design rates on those trucks are more like, like, could you just tell me what the design rates on the trucks are? I thought they were somewhere around three, three and a half.
Speaker Change: Douglas Goldstein, CFP®, is the director of Profile Investment Services and the host
Unknown Executive: the mining and the ore stockpile rates. I think, can you just talk about the truck availability? I think you're getting around 2 million tons per. Associates, Lisa Ann Montauk, Laura McShane, Jenna Antelope, Russian Axso,
Unknown Executive: and the ore stockpile rates. I think, can you just talk about the truck availability? I think you're getting around 2 million tons per truck.
Speaker Change: I did the math right on that, per annum, if you annualize it. And are design rates on those trucks more like, could you just tell me what the design rates on the trucks are? I thought they were somewhere around three to three and a half. But of course, that depends on your haul distances. So can you just talk about the availability on the trucks? Yeah.
Doug Reddy: But of course, that depends on your haul distances. So can you just talk about the trucks? Yeah. All distances are affected at this very start for a couple of reasons.
Doug Reddy: One thing that while we've been pioneering essentially the pit, we've been moving a lot of the soil material, some of which needs to be treated. So that means we have to take it down to an area where it can be dealt with. That consumes some of the cycle time. We've also been doing a lot of work with taking clean waste down to our tailings facility. Again, a longer cycle time for those trucks. So you can't really, you'd have to separate them out between mine and those other activities. But essentially, with a fleet of 25 trucks and four shovels on site, we'll be continuing the ramp up towards a pit capacity of 180,000 tons a day by the end of the year.
Speaker Change: All distances are affected at this very start for a couple reasons one that
Speaker Change: While we've been pioneering essentially the pit, we've been moving a lot of the soil material.
Speaker Change: Some of which needs to be treated.
Unknown Executive: So that means we have to take it down to an area where it can be dealt with. That consumes some of the cycle time. We've also been doing a lot of work with taking clean waste down to our tailings facility. Again, longer cycle time for those trucks.
Unknown Executive: So, you can't really, you'd have to separate them out between mine and those other activities. But essentially, with a fleet of 25 trucks, four shovels on site, we'll be continuing the ramp up towards a...
Greg Smith: Anita, it's great here. I might just add, I don't know if there's a recent picture on our website, but if there's not, I can send one to you. The first, this first year of mining at Greenstone is a little bit complex for a couple of reasons. You'll remember when we were there; there are the old McLeod tailings that are there from previous mining. Part of our permit requires that we excavate those tailings and move them to our facility, and we do have some trucks dedicated to doing that.
Speaker Change: Capacity of 180,000 tons a day by the end of the year.
Unknown Executive: Anita, it's great to hear. I might just add.
Speaker Change: I don't know if there's a recent picture on our website, but if there's not, I can send one to you.
Unknown Executive: This first year of mining at Greenstone is a little bit complex for a couple of reasons. And you'll remember when we were there, there's the old McLeod tailings that are there from previous mining. Part of our permit requires that we excavate those tailings and move them to our facility, and we do have some trucks dedicated to doing that.
Doug Reddy: We also have this, we call it type D soil, which is contaminated soil in the main open pit. It's a delicate job to move that material, and we're in the process of doing that. And as we do that, it, you know, it opens up additional areas of that open pit for us to mine. So if you look at a recent picture, what you'll see there is sort of a couple of awkward islands in the middle of our pit where we're still excavating type D soil, and it does provide some complexity in mining efficiency in the first half of this year.
Unknown Executive: We also have this, we call it type D soil, which is contaminated soil in the main open pit, which is a delicate job to move that material.
Unknown Executive: And we're in the process of doing that. And as we do that, it, you know, it opens up additional areas of that open pit for us to mine. So if you looked at a recent picture, what you'll see there is sort of a couple of awkward islands in the middle of our pit where we're still excavating.
Speaker Change: Arbutipe tea soil.
Speaker Change: And it does provide some complexity in mining efficiency in these sort of the first half of this year. We're working through that quickly. And I think over the next quarter or so, largely through the type D soil, we open up the pit, the cloud tailings are well advanced, and we start to really see those efficiencies as we go into Q4 here. So just for the first year, as Doug said, pioneering this pit with some of the historic issues does make it a little more complex.
Doug Reddy: We're working through that quickly, and I think over the next quarter or so, largely through type D soil, we open up the pit, the McLeod tailings are well advanced, and we start to really see those efficiencies as we go into Q4. So it's just for the first year, as Doug said, pioneering this pit with some of the historic issues does make it a little more complex, but again, we've been able to build a large stockpile, feed the mill, and, you know, we're on track to be able to meet our targets.
Unknown Executive: But again, we've been able to build a large stockpile, feed the mill, and are on track to be able to meet our targets.
Doug Reddy: Okay, and then just a last question on that, on the mining rates. I think they meant you guys mentioned that some of it was dedicated while looking back at the last couple of quarters, but basically, they were talking about how the mining rates, some of that was dedicated to providing waste rock for the tailings dam. Are you through with that? Or is it now? Are you basically just using the fleet to do ore and waste in the pit? Or are you still looking to help at the tailings facility?
Speaker Change: okay and then just a last question on that on the mining rates i think they me you guysmentioned that some of it would dedicate while looking the last couple of quarters but basically we're talking about how the mining rates
Speaker Change: Some of that was dedicated to providing waste rock for the tailings dam. Are you through that? Are you basically just using the fleet to do ore and waste in the pit, or are you still looking at helping out the tailings facility?
Wayne Lam: Now we're still free; we're still hauling clean waste down to the team.
Unknown Executive: Now we're still free; we're still hauling clean waste down to the TMF. Okay, and how much on the next it's on the next, it's the next stage.
Unknown Executive: No, we're still hauling clean waste down to the TMF.
Doug Reddy: Okay, and how much... It's on the next, it's on the next, it's a next stage. Right, so how much material, like in terms of millions of tons, do you have to deliver to the waste rock, to the tailings facilities this year?
Unknown Executive: Okay, and how much... It's on a next, it's on a next, it's a next stage.
Speaker Change: Right, so how much material, like in terms of millions of tons, do you have to deliver to the waste rock, to the tailings facilities this year?
Doug Reddy: I'll get back to you shortly. I don't have that number on the top of my tongue, but I'll get back to you shortly. You don't have a memorized book?
Unknown Executive: I'll get back to you shortly. I don't have that number on the top of my tongue, but I'll get back to you shortly. You don't have a memorized book?
Unknown Executive: I'll get back to you shortly. Don't have that number on the top of my tongue, but I'll get back to you shortly. You don't have a memorized deck? OK, that's it for my questions. I'll get back in the queue.
Unknown Executive: You don't have a memorized deck? Okay, that's it for my questions. I'll get back in the queue.
Doug Reddy: You don't have a memorized deck? Okay, that's it for my questions. I'll get back in the queue.
Operator: The next question is from Wayne Lam with RBC Capital Markets. Please go ahead.
Unknown Executive: Thanks. Thanks.
Unknown Executive: The next question is from Wayne Lam with RBC Capital Markets. Please go ahead.
Wayne Lam: Yeah, thanks guys. I guess maybe just circling back to Greenstone, you know, really nice to see you guys hit the 2 million ton or stockpile as planned. Could you give us an idea of the grade of that stockpile? And then, maybe just as a follow-up on the 2.5 gram ton, typically, we see much lower grade feed put through the early stages and ramping up on the mill. But I was just wondering if you guys are seeing any positive reconciliation versus plan and, you know, with some of the higher grade material put through the mill to accelerate some upfront cash flow.
Speaker Change: yeah thanks guys
Speaker Change: I guess maybe just circling back to Greenstone, you know, really nice to see you guys hit the two million ton ore stockpile as planned.
Speaker Change: Could you give us an idea of the grade of that stockpile? And then maybe just as a follow-up on the two and a half gram a ton. Yeah, typically we see much lower grade feed put through the early stages in Red Pickle and Mill, but just wondering if you guys are seeing...
Speaker Change: Any positive reconciliation versus plan and you know with some of the higher grade material put through the mill to accelerate some upfront cash flow.
Greg Smith: Wayne, it's great here. I'll start with the high grade into the plant, and then Doug can respond to some of your other questions here. As we were ramping up basically in the first couple of benches or the first mining we did, we did have a fair bit of high-grade ore. And as we started to ramp up the mill, we started to have very good recoveries right off the bat. So we're seeing, you know, plus 90% recoveries pretty much right away.
Unknown Executive: Wayne, it's great to be here. I'll start with the high grade into the plant, and then Doug can respond to some of your other questions here. As we were ramping up, basically in the first couple of benches of or the first mining we did, we did have a fair bit of high-grade ore. And as we started to ramp up the mill, we started to have very good recoveries right off the bat.
Unknown Executive: Wayne, it's great here. I'll start with the high grade into the plant and then Doug can respond to some of your other questions here. As we were ramping up...
Unknown Executive: Basically in the first couple of benches of
Unknown Executive: For the first mining we did we did have a fair bit of high-grade ore
Doug: And as we started to ramp up the mill, we started to have very good recoveries right off the bat. So we're seeing, you know, plus 90% recoveries pretty much right away. In part that's because of the increased residence time in the tanks when you're not up to full capacity.
Unknown Executive: So we're seeing, you know, plus 90% recoveries pretty much right away. In part, that's because of the increased residence time in the tanks when you're not up to full capacity. But, you know, when you start one of these plants up, you've got to build up that inventory in the tanks, and then you have this sort of rolling gold inventory in your tanks. Because we had access to such high-grade material, and we were getting very high recoveries right out of the gate, we took that opportunity to feed in some high-grade ore and ramp up that inventory quickly, which got us into producing gold more quickly than we otherwise would have.
Greg Smith: In part, that's because of the increased residence time in the tanks when you're not up to full capacity. But, you know, when you start one of these plants up, you've got to build up that inventory in the tanks, and then you have this sort of rolling gold inventory in your tanks. Because we had access to such high-grade material, and we were getting very high recoveries right out of the gate, we took that opportunity to feed in some high-grade ore and ramp up that inventory quickly, which got us into producing gold more quickly than we otherwise would have.
Unknown Executive: But you know when you start one of these these plants up
Unknown Executive: You've got to build up that that inventory in the tanks and then you have this sort of rolling
Unknown Executive: build inventory in near tanks because we had access to such high-grade material and we were getting the very high recoveries right out of a date
Unknown Executive: We took that opportunity to feed in some high-grade ore and ramp up that inventory quickly, which got us into producing gold more quickly than we otherwise would have. It wasn't a cash flow decision. It was more of a commissioning decision.
Greg Smith: It wasn't a cash flow decision; it was more of a commissioning decision. And frankly, it was – we had some very high grades that were coming out. Our stock – Doug will get into it, but we've got different bins for the stockpile. And we had a couple days there where we were feeding, I think, five grams per ton and material like that. So we were able to do that as part of our commissioning, and, you know, it reflected in the grade over the second quarter. As Doug said to Anita, that's not something that's going to last, but it was helpful as we were ramping up the plant.
Unknown Executive: It wasn't it wasn't a cash flow decision, it was more of a commissioning decision. And frankly, we had some very high grades that were coming out. Our stock, Doug will get into it, but we've got different bins for the stockpile. And we had a couple days there where we were feeding, I think, five grams per ton and stuff like that. So we were able to do that. And as part of our commissioning, and you know, it reflects in the grade over the second quarter, as Doug said to Anita, that's not something that's going to persist, but it was helpful as we were ramping up the plant.
Unknown Executive: Okay, great. Thanks.
Speaker Change: And frankly, it was it was we had some very high grades that were coming out. Our stock doesn't get into it. But we've got different bins for stockpile. And we had a couple days there where we were feeding
Unknown Executive: I think five grams per ton and material like that. So we were able to do that and as part of our commissioning and, you know, it reflects in the grade over the second quarter. As Doug said to Anita, that's not something that's going to going to persist. But it was helpful as we were ramping up the plant.
Doug Reddy: Yeah, so I think the other question was just about the stockpile where we're partly feeding from the stockpile, but we're also doing some direct feed to the crusher as well. So it's not all first in, first out by any means, and reconciliation overall has been quite good.
Doug: Yeah, so the I think the other question was just about the stockpile where Part we're partly feeding from stockpile, but we're also doing some some direct feed
Speaker Change: to the Crusher as well, so it's not all first in, first out by any means.
Doug Reddy: So average grade, I'd have to look it up because we have been focused on certain bins. So again, I'll come back to that later during the call. I'm going to just take a moment and answer Anita's question about total rock fill for the TMF. It's 7.8 million tons in 2024. So I'll come back with a grade on that stockpile.
Doug: Reconciliation overall has been quite good.
Doug: So, average grade, I'd have to look it up because we have been focused on certain bins. So, again, I'll come back to that later during the call. I'm going to just take a moment and answer Anita's question about total rock fill for the TMF.
Speaker Change: 7.8 million tons in 2024. So I'll come back with a grade on that stockpile.
Unknown Executive: And then maybe, just given the higher cost of CASL, I mean, I think it makes sense to suspend operations. But just looking across the portfolio, you guys have a couple other operations kind of running up towards those cost levels at Phelos and Santa Luz. And so, just wondering at Phelos if there's a more definitive cutoff point in the negotiations where you kind of decide you can't subsidize it anymore. And then at Santa Luz, you guys are now several years through an eight-year mine life for an asset that's had challenges dating back a decade under So, just wondering if there's a point at which you decide that that asset consumes too much capital and attention to continue to operate?
Wayne Lam: Okay, great. Thanks.
Unknown Executive: Okay, great, thanks. And then maybe just given the higher costs of CASL, I mean, I think it makes sense to suspend operations.
Unknown Executive: But just looking across the portfolio, you guys have a couple other operations kind of running up towards.
Greg Smith: And then maybe just given the higher costs of CASEL, I mean, I think it makes sense to suspend operations. But just looking across the portfolio, you guys have a couple other operations kind of running up towards those cost levels at Phelos and Santa Luz. And so just wondering at Phelos if there's a more definitive cutoff point on the negotiations where you kind of decide you can't subsidize it anymore. And then at Santa Luz, you guys are now several years through an eight-year mine life for an asset that's had challenges dating back a decade ago under Yamada. So I was wondering if there's a point at which you decide that that asset consumes too much capital and attention to continue to operate.
Unknown Executive: those cost levels at Phelos and Santa Luz. And so just wondering at Phelos if there's a more definitive cutoff point on the negotiations where you kind of decide you can't subsidize it anymore, and then at Santa Luz
Unknown Executive: You guys are now several years through an eight-year mine life for an asset that's had challenges dating back a decade ago under Yemina. So just wondering if there's a point at which you decide that that asset consumes too much capital and attention to continue to operate.
Doug Reddy: Okay, so with Los Feliz, we knew the first half of the year would be weaker than the second half, and you can already see that now that we've done the relocation of the conveyor, and we have all the material under leach, our ounces are significantly up in Q2. And they'll continue to go up in the second half of the year.
Speaker Change: Okay, so with Los Feliz, we knew the first half of the year would be weaker than the second half and you can already see
Speaker Change: Now that we've done the relocation of the conveyor and we have all the material under leach, our ounces are significantly up in Q2. They'll continue to go up in the second half of the year.
Doug Reddy: Um, um, sustaining cost is, you know, in that case being driven by the ounces that we're producing. So we should see that improve in Los Feliz in the second half of the year as well. Um, um, um, The bigger question at Los Feliz has been the establishment of new agreements. That's the key element for Feliz, being able to get a path forward and build a CIL. So it's a large mine with a great opportunity.
Unknown Executive: The sustaining cost is, you know, in that case being driven by the ounces that we're producing. So we should see that improve in Los Feliz in the second half of the year as well. The bigger question at Los Feliz has been the establishment of new agreements. That's the key element for Feliz, being able to get a path forward and build a CIL. So it's a large mine with a great opportunity.
Unknown Executive: All in sustaining cost is, you know, in that case being driven by the ounces that we're producing. So we should see that improve in Los Feliz in the second half of the year as well.
Unknown Executive: um
Unknown Executive: The bigger question at Los Feliz has been the establishment of new agreements. That's the key element for Feliz, being able to get a path forward and to build a CIL. So it's a large mine with a great opportunity. We're giving it our best shot to be able to work out everything with the communities.
Unknown Executive: We're giving it our best shot to be able to work out everything with the communities, and we're in dialogue, and we hope that we can determine the new path for Feliz overall. With Santa Luz, yes, we've, well, let's speak, let's, first of all, we're significantly better than the previous recoveries at Santa Luz. We invested in the new technology, and we've been working on getting it to refine it. Obviously, scaling up from the pilot plant to the industrial scale has had challenges, but we see it as a very promising district.
Doug Reddy: We're giving it our best shot to be able to work out everything with the communities, and we're in dialogue, and we hope that we can determine the new path for Feliz overall. Um, um, With Santa Luz, yes, we've, well, let's speak, let's, first of all, we're significantly better than the previous recoveries at Santa Luz. We invested in the new technology, and we've been working on getting it to refine it. Obviously, scaling up from the pilot plant to the industrial scale has had challenges, but we see it as a very promising district.
Unknown Executive: And we're in dialogue and we hope that we can determine the new path for Phelos overall.
Unknown Executive: um
Unknown Executive: with Santa Luz.
Unknown Executive: Yes, we've, we've...
Unknown Executive: Well, first of all, we're significantly better than the previous recoveries at Santa Luz. We invested in the new technology and we've been working on getting it to
Unknown Executive: refine it. Obviously scaling up from pilot plant to the industrial scale has had challenges and
Unknown Executive: If I turned it over to Scott, he'd be able to talk at length about the opportunities that we have in the immediate area around Santa Luz. So we're there because we believe in the long-term side of it, albeit we're in commissioning on the de-sliming circuit and we have a target that we want to achieve this year, and we will continue to look at this from the big picture. So as opposed to doing a strategic view on Santa Luz at this point in time, we have these two larger projects in the plant that we wanted to get through and see them perform, and that's the trunnion and the de-sliming.
Doug Reddy: If I turned it over to Scott, he'd be able to talk at length about the opportunities that we have in the immediate area around Santa Luz. So we're there because we believe in the long-term side of it, albeit we're in commissioning on the de-sliming circuit and we have a target that we want to achieve this year, and we will continue to look at this from the big picture. So as opposed to doing a strategic view on Santa Luz at this point in time, we have these two larger projects in the plant that we wanted to get through and see them perform, and that's the trunnion and the de-sliming.
Speaker Change: We see it as a very prospective district.
Unknown Executive: If I turned it over to Scott, he'd be able to talk at length about the opportunities we have in the immediate area around St. Louis.
Unknown Executive: So, we're there because we believe in the long-term side of it.
Unknown Executive: All be it, we're in commissioning on the de-sliming circuit, and we have a target that we want to achieve this year, and we will continue to look at this from the big picture. So as opposed to doing a strategic view on...
Unknown Executive: At this point in time, we have these two larger projects in the plant that we wanted to get through and see them perform, and that's the trunnion and the desliming.
Unknown Executive: I mean, Wayne, as a general comment, you know, we're in the business of producing gold. But obviously, we want to produce gold profitably. We have no interest in being a charity here.
Greg Smith: I mean, Wayne, as a general comment, you know, we're in the business of producing gold. But obviously, we want to produce gold profitably; we have no interest in being a charity here.
Unknown Executive: I mean, Wayne, as a general comment, you know, we're in the business of producing gold, but obviously,
Unknown Executive: So of course, if a mine is proving not to be economically viable, we don't see the long-term economic benefit of running a mine, then we're going to assess options for that mine. You know, Castle's a bit of a different story because it was a very small, you know, contract, almost pilot plant type of operation while we worked toward the large expansion. And we ended up running it longer than we had anticipated, just because of the permit timelines.
Unknown Executive: We want to produce gold profitably. We have no interest in being a charity here. So, of course, if a mine is proving not to be economic, we don't see the long-term economic benefit of running a mine, then we're going to assess options for that mine.
Greg Smith: So, of course, if a mine is proving not to be economically viable, we don't see the long-term economic benefit of running a mine, then we're going to assess options for that mine. You know, Castle's a bit of a different story because it was a very small, you know, contract, almost pilot plant type of operation while we work towards a large expansion. And we ended up running it longer than we had anticipated just because of the permit timelines.
Unknown Executive: capital is a bit of a different story because it was a very small contract on highilot plant type of operation while we worked towards large expansion and we ended up running it longer than we had anticipated just because of the permit timelines
Greg Smith: So in that case, to your point, it made sense for us to do that and really focus on the permitting for phase two. But, you know, as Doug said, Los Feliz is a large ore body and an attractive deposit. Obviously, the long-term plan there is to build a CIL plant that massively increases recoveries and really changes the flavor of that mine. To do that, we've got to have new agreements with the community.
Unknown Executive: So in that case, to your point, it made sense for us to do that and really focus on the permitting for phase two. But you know, as Doug said, Los Feliz is a large ore body, an attractive deposit, obviously, the long-term plan there is to build a CIL plant, and that massively increases recoveries and really changes the flavor of that mine. To do that, we've got to have new agreements with the community.
Unknown Executive: So, in that case, to your point, it made sense for us to do that and really focus on the permitting for Phase 2.
Unknown Executive: But, you know, as Doug said, Los Feliz is a large ore body, attractive deposit, obviously the long-term plan there is to build a CIL plant and that massively increases recoveries and really changes the flavor of that mine. To do that, we've got to have new agreements with the community, so that's the focus right now.
Greg Smith: So that's the focus right now. In Santa Luz, yeah, no question, it's been a challenge for us. It's new technology and, you know, not around the world, but it is a novel use of that technology in Santa Luz. And the team has been, you know, it's a little bit like whack-a-mole. We get some great results, and then something happens, and we kind of take a couple steps back. But I was just there, and I spent a lot of time with the team. They've done a lot of good work, and we're expecting a much better second half of the year here at Santa Luz.
Unknown Executive: So that's the focus right now. In Santa Luz, yeah, no question, it's been a challenge for us. It's new technology and, you know, not around the world, but it is a novel use of that technology in Santa Luz. And the team has been, you know, it's a little bit like whack-a-mole. We get some great results, and then something happens, and we kind of take a couple steps back. I was just there, spent a lot of time with the team, they did a lot of good work, and we're expecting a much better second half of the year here at Santa Luz.
Unknown Executive: In Santa Luz, yeah, no question, it's been a challenge for us. It's new technology and, you know, not around the world, but it is a novel use of that technology in Santa Luz.
Unknown Executive: And the team has been, you know, it's a little bit like whack-a-mole. We get some great results and then something happens and we kind of...
Unknown Executive: Take a couple steps back, but I was just there spent a lot of time with the team. They've done a lot of good work and we're Expecting a much better second half of the year here at Santa Luz
Unknown Executive: Okay, great. Yeah, hopefully you guys can get up to the 70% plus level in the second half, maybe just the last one for me, looking ahead on the convert coming due in October. Peter had alluded to having the cash on hand and cash from operations to cover that, but it would seem to consume quite a bit of capital in reserve during the ramp up. So, I guess, just in terms of alternative funding options, would you look to refi with another refinance similar to the one done last September, or is there potential to renew the ATM, or are you just curious about the available funding options might be if you have to repay that with cash?
Wayne Lam: Okay, great. Yeah, hopefully you guys can get it up to the 70% plus level in the second half.
Unknown Executive: Okay, great. Yeah, hopefully you guys can get up to the 70% plus level.
Wayne Lam: Maybe just last one for me, looking ahead on the convert coming due in October, Peter had alluded to having the cash on hand and cash from operations to cover that, but it would seem to consume quite a bit of capital and reserve during the ramp up. So I guess just in terms of alternative funding options, would you look to refi with another convert similar to the one done last September? Or is there potential to renew the ATM? Or are you just curious what the available funding options might be if you have to repay the cash?
Unknown Executive: in the second half. Maybe just last one for me. Looking ahead on the convert coming due in October , Peter had alluded to having the cash on hand and cash from operations to cover that, but would seem to consume quite a bit of capital and reserve during the ramp up.
Unknown Executive: I guess just in terms of alternative funding options, would you look to refi with another convert similar to the one done last September , or is there potential to renew the ATM, or just curious what the available funding options might be if you have to repay that with cash?
Unknown Executive: B, do you want to handle that one? Sure.
Peter Hardie: B, do you want to handle that one? Sure.
Peter Hardie: Sure. First of all, Wayne, we do believe we'll be able to manage it through cash with our existing liquidity. If you recall, when we did the convert last year, we were expecting an April maturity on that note. And so we issued that convert at that time, then we took the proceeds of that, and put them on the revolver to reduce interest costs in the meantime. So we have room on the revolver to draw that was put there thanks to that note issuance from last year, as well as existing cash.
Unknown Executive: Sure. First of all, Wayne, we do believe we'll be able to manage it through cash and our existing liquidity. If you recall, when we did the convert last year, we were expecting an April maturity on that note. And so we issued that convert at that time, then we took the proceeds of that, and put them on the revolver to reduce interest costs in the meantime. So we have room on the revolver to draw that was put there thanks to that note issuance from last year, as well as existing cash.
B: B, do you want to handle that one?
Unknown Executive: sure
Unknown Executive: First of all, Wayne, we do believe we'll be able to manage it through cash and our existing liquidity. If you recall, when we did the convert last year, we were expecting an April maturity on that note.
Unknown Executive: And so we issued that convert at that time, then we took the proceeds of that, put it on the revolver to reduce interest costs.
Unknown Executive: in the meantime
Unknown Executive: So we have room on the revolver to draw that was put there thanks to that note issuance from last year as well as existing cash. With respect to Greenstone, we are given the ramp-up rate and trajectory we're currently on with
Peter Hardie: With respect to Greenstone, given the ramp-up rate and trajectory we're currently on, in addition to commercial production expected this quarter, we're currently comfortable that we can repay that note if needs be when it comes mature through existing sources. With respect to prospective sources, of course, everything you mentioned is available, but they're not in our current plan.
Unknown Executive: With respect to Greenstone, given the ramp-up rate and trajectory we're currently on, in addition to commercial production expected this quarter, we're currently comfortable that we can repay that note if needs be when it comes mature through existing sources. With respect to prospective sources, of course, everything you mentioned is available, but they're not in our current plan.
Unknown Executive: In addition, with commercial production expected this quarter.
Unknown Executive: We're currently comfortable that we can that we can repay that note if needs be when it comes mature through existing sources. With respect to prospective sources of course everything you mentioned is available but they're not in our current plan.
Wayne Lam: Okay, great. Thanks for taking my questions and best of luck with the ramp-up and operations on the north side.
Speaker Change: Okay, great. Thanks for taking my questions and best of luck with the ramp up and operations in the months ahead.
Unknown Executive: Thanks, Wayne. So we do have some questions online that I feel have already been answered in the other things that the speakers have addressed. So the archive of the website will be up in probably, sorry, the archive of the webcast will be on the website in a couple of hours. So you're welcome to go back and have another listen.
Rhylin Bailie: Thanks, Wayne. So we do have some questions online that I feel have already been answered in the other things that the speakers have addressed. So the archive of the website will be up in probably, sorry, the archive of the webcast will be on the website in a couple of hours. So you're welcome to go back and have another listen.
Warren: Thanks, Warren.
Unknown Executive: thankank
Speaker Change: so we do have some questions online that i still have already been answered in the other thingthings that the speakers of addressed so the archive of the website will be up on and improbably orry arcup of the webcast will be on the website a couple of hours so you're welcome to go back and have another listen we'll have a transcript of the entire thing probably on saturday if there was other questions i'll get back toyou later this evening i have to get pe on the roads because 's a big cycle ahead of them today but i will get back to everybody else sometimes tonight youhave any closing remarks
Unknown Executive: We'll have a transcript of the entire thing up probably on Saturday. If there are any other questions, I'll get back to you later this evening. I have to get Pete on the road because he's got a big cycle ahead of him today. But I will get back to everybody else sometime tonight. So Greg, do you have any closing remarks?
Rhylin Bailie: We'll have a transcript of the entire thing up probably on Saturday. If there are any other questions, I'll get back to you later this evening. I have to get Pete on the road because he's got a big cycle ahead of him today. But I will get back to everybody else sometime tonight. So Greg, do you have any closing remarks?
Greg Smith: No, just thanks again everyone for attending the call, and you know where to find us if you've got...
Greg: No, just thanks again everyone for attending the call and you know where to find us if you've got any more questions.
Peter Hardie: Perfect. Oh, Peter, I'm just gonna please donate. It's a great cause.
Unknown Executive: Perfect. Oh, Peter, I'm just gonna please donate. It's a great cause. Operator, you can now conclude the call.
Operator: Thank you. This brings to a close today's conference call; you may disconnect your lines. Thank you for participating and have a pleasant day.
Speaker Change: I'm just going to add, please donate. It's a great cause.
Operator: Thanks very much. Operator, you can now conclude the call.
Operator: Thank you. This brings to a close today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.
Speaker Change: ?? ?? ?? ?? ??
Peter Hardie: This is a natural consequence of using debt as a one-leaver funding acquisitions and construction. Leverage peaked in Q1 2020, a few months after construction of Arizona was completed, and again in late 2022 as construction of Greenstone was ongoing, and construction of the Santa Luz Mine was completed. Another trend we see in this chart is that as the mines are commissioned and ramped up, that leverage decreases, as Equinox Gold has the benefit of EBITDA and cash flow generated by the new mines, and we expect the same as Greenstone enters into commercial production, hopefully later this quarter. With that, I turn the presentation over to Doug for a review of the operation.