Q4 2024 Equinox Gold Corp Earnings Call
Thank you for standing by this is the conference operator, welcome to the Equinox, Gold's fourth quarter and 'twenty 'twenty four results and corporate update.
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I would now like to turn the conference over to your religion, Bailie, Vice President Investor Relations for Equinox Gold's. Please go ahead.
Bailie: Thank you operator, and thank you everybody for joining US today, we will of course, youre, making a number of forward looking statements. So please do visit our website SEDAR and Edgar to learn more about the company I will now turn the call over to our President and CEO Greg.
Speaker Change: Thanks, Good morning, everyone and thanks for joining the call today on the line with me is our C O O Doug ready, our CFO, Peter Hardie, our EVP of exploration Scott Heffernan at our VP of Investor Relations ruined Bailey.
Bailie: Again today, we are discussing equinox gold.
Bailie: 2020 for fourth quarter, and full year financial and operating results for those of you that are new to the company Equinox Gold is our fast growing Americas focused gold producer, we've got producing mines across Canada, United States, Mexico, and Brazil, as well as several mine expansion development opportunities.
Bailie: Our production is supported by a large golden dalman, including 20 million ounces in reserves and an additional 18 million ounces in measured and indicated resources across our portfolio of gold deposits.
Bailie: So I'm going to start first with a broad overview of the fourth quarter and the year and then I'll turn the call over to Pete and Doug for more details.
Bailie: Well, we once again had a strong finish to the year with fourth quarter production of approximately 214000 ounces and sales of approximately 218000 ounces.
Bailie: That's the highest quarterly gold production in the company's history.
Bailie: Cash cost per ounce sold in the quarter was $14 58 per ounce, our lowest quarterly cash costs. This year with all in sustaining cost per ounce sold of $16 50 to 1652.
Bailie: We also finished 2024 with record annual gold production of approximately 622000 ounces and sales of 623000 ounces at a cash cost of 15 98 per ounce and all in sustaining costs of 18 70 crowds.
Bailie: Our safety performance. This year was good all of our sites had no lost time injuries in 2024 with a total recordable injury frequency rate across the company have to point to one beating our target for the year.
Bailie: Our good results. However, we must also acknowledge that we regrettably had a fatality during the year at our presenter mine.
Bailie: Okay.
Bailie: On the environmental side, we had a substantial improvement to our significant environmental incident frequency rate compared to last year and we also improved our S&P global corporate sustainability assessment score by over 13% compared to the prior year. This puts us right near the top of our peer group on that score.
Bailie: Our major focus for the company during 2024 was commissioning greensville minded, Ontario, and ramping up production.
Bailie: In April we introduced first gold sorry, first ore to the processing plants.
Bailie: We poured first gold in May.
Bailie: We also consolidated ownership of greenstone in May with the acquisition of a 40% and the mine is held by our joint venture partner.
Bailie: And in November we achieved commercial production and Doug will have more details on greenstone later in the Gulf.
Bailie: Yeah.
Bailie: During 2024, we continue to advance our plans to develop an underground mine at the Pea Abbott deposit at Arizona.
Speaker Change: Started mining at our new Tao did you have the open pit.
Speaker Change: We now plan to start development of the underground portal at the ABA later this year.
Speaker Change: We also continue to advance permitting of a planned expansion at our Castle Mountain project, which would increase the production profile of castle mountain to over 200000 ounces of gold per year.
Speaker Change: We received a notice of completion from the Federal Bureau of land management during the year and we now expect to receive a notice of intent in the second quarter of this year depending.
Speaker Change: Depending on final timing of receipt of the notice of intent.
Speaker Change: Permitting for the expansion should finish up in late 2026, our early 2027.
Speaker Change: In the meantime, we're continuing to advance engineering and design so that when the permit is received we'll be well prepared to make a construction decision at castle mountain.
Speaker Change: Okay.
Speaker Change: Across our mines exploration drilling in 2024 successfully replaced our reserves and we completed three technical reports during the year, including for our his soccer project in Red Lake.
Speaker Change: Our greenstone mine and more recently <unk> in Brazil, which demonstrates mine life extension I presented it to 2033.
Speaker Change: Okay.
Speaker Change: Looking forward, we expect an increase in production in 2025 to between 635000 ounces and 750000 ounces with cash cost of between $10 75, and $11 75 per ounce and all in sustaining costs of between $14 55, and $15 50 per ounce.
Speaker Change: The increase in production was driven by greenstone, which we expect to continue to ramp up through the course of the year.
Speaker Change: You should note that we have not included any guidance for the CLO is in Mexico.
Speaker Change: As we've been reporting for some time now we've been working toward new long term agreements with the local communities Atlas V loss.
Speaker Change: These agreements are necessary to help ensure the long term economic viability of the mine, which requires investment in the construction of a new carbon in leach plant to increase recoveries from higher grade open pit and underground ores that are not suitable for stacking on the leach pad.
Speaker Change: We have made substantial progress and in January reach consensus with the three communities on terms for the new agreements.
Two of the communities have already approved and signed new long term agreements with the company. However, one company has not yet approved and signed a new agreement and unless we can complete agreements with all three communities in the near term we will not continue to operate the most fuel side.
Speaker Change: So given the current uncertainty no guidance will be provided for those three wells at this time.
Speaker Change: Finally, you should also note in our guidance that we have combined our presenter in Santa lose mines into a single reporting unit called the by year complex.
Speaker Change: We are in the process of completing a formal combination of the two mines into one operating unit to take advantage of their close proximity and the resulting operating costs and other benefits and efficiencies.
Speaker Change: And with that I'll turn it over to Pete to discuss our financial results.
Pete: Thanks, Greg we're now on slide eight in the presentation, but first a little housekeeping, while we're reporting today on the Q4 and annual 2020 for operating and financial results I'll note that the company's financial results are unaudited and subject to change pending release of the audited financials, which we expect to publish around mid March.
Pete: Now, let's get back to talking about the quarterly results equinox, a great operating and financial quarter that saw improvements in almost all operating and financial metrics compared to Q3. This year in Q4 last year.
218000 ounces of gold we sold we realized.
Pete: The realized price of $26 36 per ounce for revenues of $575 million the increase in revenues over prior quarters is driven by the higher realized price and by an increase in ounces sold with the increase in gold ounces sold attributable primarily to greenstone coming online and achieving commercial production in Q4 and <unk>.
Pete: <unk>, let's Villa and RDM had record quarters and presenter had its second highest quarter for gold sales since equinox requires them in early 2020.
Pete: For the quarter income from mine operations was $170 million, that's an increase of $69 million from Q3's income from mine operations of $101 million and at the 131 million more compared to Q4 2023.
Pete: The increase in income from mine operations compared to previous quarters is driven by the increase in revenue.
Pete: Our cash cost per ounce of 1458 for the quarter decreased compared to Q3 is 1720 crowds, but increased compared to Q4 2020 three's cash cost per ounce of 1330, our all in sustaining cost per ounce for Q4 was 1652 as Greg mentioned a decrease.
Pete: When you compare to Q3.
Pete: Q3 was 1994 per ounce, but it is on par with 2023 1657 per ounce.
Pete: Our EBITDA in Q4, 2024 was $185 million or $200 million $18 million on an adjusted basis, which is a significant improvement over Q3's $114 million or $142 million on an adjusted basis and double last year's Q4 of $85 million or $95 million on an adjusted basis.
Pete: The increase in EBITDA is also mostly attributable to the increase in revenues during this quarter.
Pete: We had net income of 28 million for basic and fully diluted earnings per share of <unk> <unk> on an adjusted basis.
Pete: Net income of $77 million or <unk> 17 per share.
Pete: For the quarter cash flow from operations before changes in noncash working capital was $213 million or <unk> 47 per share basic and $248 million after changes in noncash working capital.
Pete: With respect to our sustaining spend year to date, we spent $152 million, which was $36 million less than our guidance of $187 million.
Pete: Moving on to slide nine we had a busy year in 2020 for two of our main focuses for the year were one to fund the completion commissioning and ramp up of greenstone and second to acquire the remaining 40% interest we didn't already own to consolidate our now 100% ownership of the mine you.
Pete: You can see on this slide the activities around just took the facility to facilitate those two forces. In addition during 2024, we retired $180 million in debt, namely a 140 million convertible note that was converted to shares on maturity and we paid down or paid off a 40 million note related to the acquisition of the greenstone, 40% interest.
Pete: Yeah.
Pete: Now, let greenstone is in commercial production and our focus for the focus area for the company in 2025 is deleveraging the balance sheet.
Pete: If gold prices were in the mid two thousands which they were not that long ago. The company with target to repay about $200 million of debt during 2025, including a $140 million in convertible notes that mature in September.
Pete: Should those notes converted to shares of maturities in the $140 million will go towards reducing the revolving credit facility and we would expect to retire about $340 million in the year, if gold prices remain at or near current spot rates, we expect to retire significantly more than that and exceed our deleveraging goals for 2025.
Pete: Moving to slide 10 in terms of liquidity and capital position. We ended the quarter with 239 9 million of unrestricted cash. In addition to our cash flow from operations, we had $105 million available to draw on the revolving credit facility and had 100 million accordion feature also available.
Pete: A quick mention of the gold hedges the company put in place last year as of January one of this year. The company has hedged color arrangements on 140000 ounces of gold that were put in place with a $500 million term loan used to help fund the greenstone ownership consolidation.
Pete: Hedges on 100000 ounces mature in a straight line through the first half of 2025 and the average ceiling all those ounces as about 2900 per ounce.
Pete: Our hedges on the remaining 40000 ounces mature at 10000 ounces per quarter from Q3. This year through the end of Q2 next year and have a ceiling of about 3500 per ounce per ounce pardon me.
Pete: With that I will turn things over to Doug for a review of the operations. Thanks, Pete We're now on slide 11 of the presentation.
Speaker Change: And we had a great 10 to 2024, 34% of our gold production came in the quarter.
Speaker Change: Greenstone the mine produced 53022 ounces with an all in sustaining cost of $1141 an ounce we.
Speaker Change: We declared commercial production on November six and in December the plant throughput was at 77% of capacity and recoveries for the quarter were <unk>, 82% and contrary to what I've put in the presentation. I am told that we were just under 86% for December so good good progress there.
Speaker Change: It's been resolving issues that were identified in the end of Q3 started Q4 on what screens pumps in converse and our CIP tanks, including valve calibrations and replacement so largely been done on the calibrations in Q4, and we will be doing the Uh huh.
We noted in Q4, we will be doing the <unk>.
Speaker Change: Bell replacements coming into Q1 of 2025.
Speaker Change: B grade was 126 grams, which is in line with our long term average grade.
And the plant had a record for daily crush tons at over 34400 tons and also for milled tonnes a record day of 28800 tonnes.
Speaker Change: On the mining front. The fleet now has 25 cat 793 haul trucks in operation and we'll be adding four more during this quarter to just come online and two more are in assembly.
Speaker Change:
Speaker Change: There are four PC 5500, shovels in operation, we will add one more later this year.
Speaker Change: By the end of 'twenty 'twenty $433 6 million tons had been moved and $3 9 million tonnes of ore was stockpiled.
Speaker Change: The strip ratio was for the quarter was $2 93 was $3 1 million tonnes of ore being moved and $99 2 million tonnes of waste mined.
Speaker Change: Mining costs were $2 66 per tonne mined in the quarter.
Speaker Change: And.
Speaker Change: As we.
Speaker Change: We are now done with mining through an area of contaminated soil. It was in the center of our pit that inhibited our mining efficiency and with this gone it allows us to open up the pit and become more efficient overall in mining.
Speaker Change: The largest blast reported so far was 800000 tons, we're targeting getting to a million tons. So that just happened this last week.
Speaker Change: All positions.
Speaker Change: <unk> have been filled and we're currently still looking for additional people for operators for hot seating on the mobile equipment.
Speaker Change: And we plan to reach nameplate and in late 2025.
Speaker Change: So onto the next page.
Speaker Change: The Mesquite mine gold production was 17129 ounces with an all in sustaining cost of $1392 per ounce for the quarter and.
Speaker Change: Production of <unk>.
Speaker Change: <unk> was 71984 ounces with an all in sustaining cost.
Speaker Change: $1306 groups for the year.
Speaker Change: No ore was mined in the quarter all of the gold production was from previously stacked material.
Speaker Change: Waste stripping continued in the ginger pit during the quarter of the ore from the pit will start going to the leach pad this quarter and it represents 93% of ore mined in 2025.
Speaker Change: Mesquite continues to have very good mining cost at $1 71 per ton in the quarter, an adult or 47 per ton for the year.
Speaker Change: For 2025 production is coming from the Ginger pit.
Speaker Change: And we'll begin waste stripping in the brownie for Rainbow North in Big Chief H P.
Speaker Change: Pitts now provide or for the tail end of 2025 and go into 2026.
Speaker Change: Castle Mountain full year production was 20511 ounces with all in sustaining costs of $1920 per ounce.
Speaker Change: Mining was suspended at castle Mountain in August and residual leaching will continue into 2025 and as we've noted.
Speaker Change: It will carry on and while we're doing care and maintenance during phase II permitting.
Speaker Change: At <unk>, the mine had the highest quarterly and annual production.
Speaker Change: Equinox acquired the mine production increased during Q4 to 60000 and 521 ounces with an all in sustaining cost of $2051 per ounce full year production.
Speaker Change: <unk> was 170369 ounces and all in sustaining cost of $2185 per ounce.
<unk> has a high cost per ounce, we continue to work towards reductions and as discussed earlier in the call. We continue to work towards establishing new agreements.
Speaker Change: Onto the next page in Brazil at the Autozone and mine production was 24277 ounces with an all in sustaining cost of 2000 and $229 per ounce.
Speaker Change: Full year production was 71624 ounces at an all in sustaining costs in 2000 and $233 grows.
Speaker Change: In Q4, the majority of orders coming from <unk>, which is lower grade compared to the EPA. The open pit. If you recall, we did have geotechnical issues and the payout of a pit early in 2024, and we brought <unk> online earlier than originally planned, but it's worked out well for us and we've also gone back into the <unk> pit we've been mining in.
Speaker Change: Eastern or western ends of the pit.
And also we brought the <unk> did some small amount of mining in the boss Ferenza as well.
Speaker Change: Remediation work on the <unk> pit wall, what was taking place in two areas in 2024, we've drilled 14, dewatering holes, which are working out very well.
Speaker Change: We completed our external reviews of geotechnical and hydrological information.
Speaker Change: We are in the midst of the rainy season at the moment. So we continue to monitor these monitors there is in the south wall of the pit and we plan to start work on the underground portal and ramp late in 2025 once the rainy season is over.
Speaker Change: At the present of mine production was 18522 ounces and the all in sustaining cost was $1051 per ounce for the quarter for the full year production was 62382 ounces all in sustaining cost was 1640 <unk>.
Speaker Change: $7 per ounce.
Speaker Change: In 2025, we will be developing a larger open pit that's the seal ex pit that was mentioned in our technical report that was recently filed.
Speaker Change: That pit will encompass several smaller pits and areas that were mined from underground in the earlier years are presented as 40 Youre my lifestyle will be taking a crown pillars in an unmanned mine. There is an additional zones that were not part of the mine plan in the early years of the life.
Speaker Change: And we're also accelerating our underground development to open up areas for sustained long haul retreat mining I'll note that mostly we have been doing remnant mining during 2024. So it will be good to be able to switch over to long haul retreat.
At RDM Gold production was 21320 ounces and all in sustaining cost was $1318 per ounce for the quarter.
And full year was 56400 ounces produced at an all in sustaining cost of $1608 per ounce.
Speaker Change: The new dry stack tailings facility has worked out well at RDM, we use like loans to remove water from the tails than we continue draining them in our T O stuff and after the moisture content has dropped sufficiently we transfer those tails over to a dry stack facility, where we spread them out.
Speaker Change: Use of operation to bring down the moisture content further and then we use stock in compact on the on those dry stock tailings storage facility, we will be changing over to an owner fleet for haulage of those tails and that'll help us to further reduce costs at already have them.
Speaker Change: As sad to lose production was 14793 ounces and the all in sustaining cost was $1868 per ounce and for full year was 56009 or six ounces and all in sustaining cost of 2000 and $224 per ounce recovery was below plan at <unk>.
Speaker Change: Three 5% for Q4.
Speaker Change: I'll note that the new trend in the installed middle of the year has worked out well, it's given us increased throughput, but we didn't need to back off the throughput to maintain residents time, while we were servicing several over tanks in and Q end of Q3 and into Q4.
Speaker Change: We are adding a six leach tank and so that should allow us to be able to ramp back up with her overall throughput.
Speaker Change: We do plan on starting mining and the eight two and eight three pits and each one as well as central is.
Speaker Change: And on that I'll hand, it back to Greg.
Greg: Thanks, Doug.
Speaker Change: I'll just.
Greg: Some are quickly before I move on to Q&A.
Greg: On our last few quarterly calls I've noticed noted that we were at an inflection point at Ecuador with greenstone coming online.
Greg: We only just a commercial production at greenstone in November and we're still ramping up you can see the quarter over quarter impact that greenstone is having.
Greg: We had record gold sales for a third quarter in 2024, and then again in the fourth quarter and with strong gold prices. We also had the all time highest revenue and adjusted EBITDA and adjusted operating cash flow in Q3, and then once again in Q4.
Greg: In short we have excellent leverage to the gold price and at these prices 2025 should be a great year for us as we continued to reduce our debt as well as investing in our portfolio of mines for the long term.
Speaker Change: I'm going to wrap up there and turn it back over to <unk> for Q&A. Thanks, Craig Operator can you. Please remind people how to ask a question.
Speaker Change: Certainly once again to join the question queue. You May Press Star then one on your telephone keypad, you will hear a tone acknowledging your request if youre using a speakerphone. Please pick up your handset before pressing the keys.
Jay: Jay Your question you May Press Star then two.
Jay: For those participating through the webcast you can submit a question in writing by using the text box in the lower left corner of the webcast training.
Jay: We will pause momentarily for callers to join the queue.
Jay: Thank you very much. Okay. Next question is from my mind.
Speaker Change: If this is for Peter if gold prices remain high what are you going to deal with the extra free cash flow.
Jay: Oh, Yeah, great question.
Jay: First we love this gold price environment, you can see the impact that the higher gold price has throughout our financials as I mentioned several times the number of our metrics are the best we've had for a quarter and Thats, primarily primarily driven by the top line, which is revenue obviously in.
Jay: 2025, with our guidance, we're looking to expand production some are gold and selling it into this environment of higher prices will enable more free cash flow.
Jay: You look and the press release, we're showing mine site free cash flow for just Q4 of $184 million and we would look to expand that as we move forward and as I mentioned as well during my comments, our focus and I think we've been saying it for a couple of quarters now our focus going forward not just 2025 is deleveraging.
And so any cash we generate that's excess.
Jay: Outside of what's needed by the business is going to go to strengthen the balance sheet.
Speaker Change: Perfect. Thank you operator can you. Please take a couple of questions from the phone.
Operator: Sure thing. The next question will come from Anita Soni with CIBC World markets. Please go ahead.
Anita Soni: Hi, good morning, Greg and team. So a couple of questions. So firstly on greenstone could you give us some idea about degrade Huntington recoveries that you were looking for them for this year on average.
Anita Soni: I didn't need a sure.
Anita Soni: Our budget mine plan has us.
Anita Soni: Around a gram and first quarter, but we ramp up to about 1617 grams towards the end of the year.
Anita Soni: Okay.
Anita Soni: 1.61 points.
Anita Soni: I'm, assuming that's because the mining rate will pick up and then you'll be able to sort.
Anita Soni: Sort of can be more selective about the mining, but at the beginning you are more sort of hand to mouth on that.
Anita Soni: Well, you know and you've seen the pit and it was all about opening up that pit getting the bigger bigger blocks enabled and getting rid of the contaminated soil from the center area of the pit, which was unfortunate it took so long so finicky deaf to remove that but yeah that.
Anita Soni: That combined with adding the additional four trucks, we stepwise, we will increase our tons per day being moved ex pit during the course of the year.
Anita Soni: Okay and then just another question on the the unit costs and this might be more financially driven so there's two questions that I have the first is the difference between the 58 and the total cash cost guidance I'm coming out to about $255 per ounce between the two guidance ranges, but.
Anita Soni: If I take your sustaining capital and I divide it by the number at the midpoint of the guidance I get to about 350000 ounce.
Anita Soni: Preempts differential so I'm trying to understand.
Anita Soni: The discrepancy there between the aortic and the total cash costs and sustaining capital that gas.
Anita Soni: Yeah.
Anita Soni: You know what I need I will take that question and we'll take it away and we'll get back to you I don't.
Anita Soni: I think we're going to be able to do the math here in real time on the call. That's alright, alright, no. That's fine and then just second question. This one is more along the lines of.
Anita Soni: I guess, you know and like.
Anita Soni: In the fourth quarter, you mind, you know in terms of or your mind sort of double what you actually put through the mill. So those costs are the costs associated with the ore and waste that would have been associated with that.
Are they being inventoried or are they going into working capital and and then going forward in 2025, where does that kind of up here does it appear in the in the Capex or is that somehow embedded in the unit cost I'm just trying to understand the cost guidance.
Anita Soni: Sure and sorry are you referring to greenstone in particular or just generally our policy is yeah.
Anita Soni: Great sounds great.
Anita Soni: Right so.
Anita Soni: The approach we take is a generally speaking in general I'll speak generally and then and then greenstone.
Anita Soni: Generally, we obviously look at our strip ratio well first.
Anita Soni: Opening up a pet we determine how much of it is considered development and then at a certain point obviously it becomes operation also development with call. It a non sustaining and not appear in the met all of the sustaining metric.
Anita Soni: And then with respect to.
Anita Soni: Once we're in operation.
Anita Soni: All of the all of the movement will fall into either Opex, depending on strip ratio our sustaining capital.
Speaker Change: Uh huh.
Speaker Change: Depending on again, depending on strip ratio, but all of that cost if you're just looking at the all in sustaining metric will be captured in the all in sustaining metric.
Speaker Change: It's just that in 2025, I don't see any in your sustaining capital when you say, what's including sustaining capital I don't see any classification for stripping. Some did you call it something else.
Speaker Change: No I think it's probably because we're right around the strip ratio and so it's all going into Opex. It won't show up in sustaining luxury below the fourth quarter was 2.93.
Speaker Change: Well below so so it'll all be in the cash cost anyway.
Speaker Change: Okay, I think we might have to take that one offline and then lastly on on lofty loves them.
Speaker Change: So I appreciate youre, not giving any guidance and this one might also be one that you take offline.
Speaker Change: Given sensitivities, but I was just wondering if you do decide to proceed mccloskey loves what does that sustaining capital look like going forward for the next couple of years I know that you have been.
Speaker Change: I'm not investing in that mine over the last couple of years, given the community challenges and I'm trying to understand if you pick back up what would that look like but at the very least I was hoping that you could tell us what standby costs are as well.
Speaker Change: Attention.
Speaker Change: Yeah, so as to standby. So we're as we get clarity and then like as Greg mentioned in his very near term. So as we get clarity on what the near term and it's very binary.
Speaker Change: Can appreciate and as you mentioned in highly sensitive.
Speaker Change: But as we get clarity near term on which path, where we will be going down. We will provide you know obviously I'm more on on what that given path looks like if you want to approximate for now that's what you were hoping to do.
Speaker Change: When the mine was.
Karyn: And karyn.
Karyn: Care and maintenance during the blockades previously we incurred about $3 million to $4 million in standby charges per month, we would expect to be significantly lower than that on.
Karyn: On an indefinite suspension, we would pare down quite a bit more but we will.
Karyn: Again, we will provide clarity on that as we move forward.
Speaker Change: Okay. That's it for my questions and congratulations on that commercial production at greenstone and delivering good free cash flow in Q4.
Karyn: Thank you thanks Amir.
Wayne Lam: Thank you. The next question is from Wayne Lam with TD Securities. Please go ahead.
Speaker Change: Yeah. Thanks, guys.
Speaker Change: Yeah, just wondering at list fellows.
Speaker Change: I'm just wondering if you might be able to provide a bit of color on the parameters of the agreement in terms of the length of term of that arrangement is that a short term agreement like the three years outlined in the letter or would it be a longer term agreement and then a.
Speaker Change: Kind of similar to and heaters question, but just wondering if you've got a deal immediately is there a catch up in capital that would be required or what would be the quantum of that kind of capital for things like the underground development.
Speaker Change: Yeah, I'll I'll take us on why this is Greg speaking that apologies.
Speaker Change: While we under the weather.
Speaker Change: Uh huh.
Speaker Change: So we're not going to give any any terms of an active.
Speaker Change: Discussion on the call.
Speaker Change: It's fair to say that the agreements that were talking about our long term and when we talk about long term. We're talking about you know encompassing the entire mine life plus so.
Speaker Change: Nothing like three years would work for us when you were talking about an investment in.
Speaker Change: In the construction of a new CIL plant.
Speaker Change: In terms of where we are where we're at with the mine just because of the situation we have slowed down mining, particularly in the open pit and particularly around pre stripping so any kind of.
Speaker Change:
Speaker Change: Back up would require that pre stripping in 2024.
Speaker Change: Again, we're not providing any guidance at this time and that would only come if that's a path that we are able to take.
Speaker Change: Of course, it's a path we'd like to take nobody wants to see the mine shutdown, but.
Speaker Change: As we stated in the press release, if we're not able to get agreements with all three communities that were not going to be able to continue operating the mine.
Speaker Change: Okay, great. Thanks, and then maybe just wondering on the underground development at ore zone that.
Speaker Change: Is there going to be an update on economics before moving ahead with that it just seems like.
Speaker Change: That's been accelerated a bit and I'm just wondering if that's a function of being a bit more constrained on the additional open pit material, even with the pay up of pet reopened.
Speaker Change: And what kind of capital that might entail versus the 'twenty one study.
Speaker Change: Yeah.
Speaker Change: So for us the portal and ramp is similar to doing an exploration program, we need to be able to get this done so we can confirm.
Speaker Change: Mine ability access.
Speaker Change: Get in touch the or drill from underground do all the things necessary that you'd normally do as part of a feasibility study were dimension. It. So we can go right into into production, but we feel that it's prudent to do all of this before we.
Speaker Change: Commit to everything else, but it is all part of a larger plan to be able to roll right onwards, yeah.
Speaker Change: The strikes, we can actually where we're not accelerating it we would've preferred to have started earlier, we pushed it off.
Speaker Change: Cause of the Geo Tech issues, we were dealing with in 2024.
Speaker Change: So.
Speaker Change: You know where were actually quite anxious to get underground if not because of of open pit.
Speaker Change: Constraints, it's because we see a very robust ore body underground that we think is good.
Speaker Change: Dry production in Arizona for many many many years our goal here is to get underground and get our hands.
Speaker Change: On that ore body do some additional work and you know at this point, it's kind of an organic.
Speaker Change: More organic expansion I would say at the mine, but as we proceed and as we get more data and we get underground that of course will come to the market and give more details on our longer term plan there.
Speaker Change: Okay right right now right now in terms of quantum I think we have a $20 million budget that would be spread across.
Speaker Change: Back end of 2025 and into 2026.
Speaker Change: Okay. Thanks for that color.
Speaker Change: And then just wondering if the scheme do you see additional opportunities to extend the mine life, there with the higher gold price or do you become more constrained pretty shortly absent the ability to move.
Speaker Change: The highway.
Speaker Change: Yeah.
Speaker Change: Well for Mosquito, obviously with Ginger it gave us the.
Speaker Change: The life spend to be able to evaluate those other pits that I mentioned.
Speaker Change: Jeremy for Rainbow North in Big Chief eight of the same time, we continue with.
Speaker Change: Evaluating other opportunities and it's probably best for Scott to address that so I'll hand, it over to him.
Scott: Yes, there is.
Scott: We do have a budget for this year. We are focused on these near term opportunities within the defense as we like to refer to it Rainbow North Big G. Eight.
Scott: Did drill and extend ginger last year and Ginger remains open to the northwest this would be our highest priority and highest potential.
Scott: Target and then of course as you mentioned there is still potential for the southeast across the highway that's just.
Scott: A bit more of a permitting challenge to work through and we are operating that now.
Scott: Okay, Great and then maybe just last one just on the renewal of that base shelf does that include an ATM component.
Scott: It gives us the ability to do ATM is but no. We do not include an ATM on the renewal.
Okay. Okay.
Scott: Okay.
Scott: Yeah, and I'd also add to that.
Speaker Change: Greg that we don't currently have plans to renew or put in place an ATM.
Speaker Change: Okay sounds good.
Speaker Change: Alright, Thank you for taking my questions.
Brian: Thanks, Brian.
Speaker Change: Thank you. The next question comes from John Tumazos, with John Tumazos very independent research. Please go ahead.
John Tumazos: Thank you for taking my questions.
Speaker Change:
Speaker Change: Concerning the $200 million minimum debt repayment goal for the year.
Speaker Change: We had 206 fall in net debt in the fourth quarter alone.
Speaker Change: Could you explain the gold price you're using for this.
Speaker Change: Calculation.
Speaker Change: Any other.
Speaker Change: The factors you mentioned the converged you didn't include the $267 million.
Speaker Change: The deferred revenue and derivatives that are current liabilities, presumably that has to be repaid.
Speaker Change: Yeah. So just on the just on the gold prepay.
Speaker Change: Those will be.
Speaker Change: Basically on a straight line basis.
Speaker Change: Be repaid starting March through September of this year through September of 2027, So theyre not.
Speaker Change: 226 pardon me so not not all current.
Speaker Change: But mostly and <unk>.
Speaker Change: And yes, I I didn't mentioned those but those will simply roll off straight line basis, as we deliver the ounces into them.
Speaker Change: And that will go towards strengthening our balance sheet as we as we eliminate those obligations moving forward. So good point.
Speaker Change: With respect to gold price on deleveraging.
Speaker Change: We use the mid two thousands gold price so just a little under 2500.
Speaker Change: In calculating that figure.
Speaker Change: Yeah, that's that's about it's kind of as simple as that job.
Speaker Change: So I don't want a good show and hot water with your attorneys but.
If we take the 200, you forecast 140th to convert converts.
Speaker Change: $2 67 for the other liabilities and then markups of gold price without even having a favorable outcome.
Speaker Change: C of OS.
Speaker Change: It could be almost $600 million of liabilities.
Speaker Change: Addressed this year.
Speaker Change: It is.
Speaker Change: If the current gold price will go.
Speaker Change: Now if you pay down debt.
Speaker Change: Successfully for one or two years at that rate.
Speaker Change: What point do you pivot.
Speaker Change: Two capex and if loews feel those.
Speaker Change: Or castle mountain or.
We're not ready for Capex.
Speaker Change: Would you pivot your cash flow too.
Speaker Change:
Speaker Change: Conceivably you could have almost enough money to finance both of those in one year.
John Tumazos: Hey, John.
Speaker Change: With all the good money.
Speaker Change: Yeah, Yeah, I mean listen we're all loving these gold prices and we do have a number of development projects in our pipeline.
Speaker Change: Both fewer sand castle are subject to.
You know certainly we've talked about the three of US on this call, but castle is also subject to getting a permit and at the time, we have a permit based on the.
Speaker Change: The economic conditions at that time, and the detailed engineering done we'll make a construction decision in that context.
Speaker Change: Yeah, we had a you know a robust discussion of its actually had our board meeting yesterday around the 'twenty 'twenty four results and it's the first time in a long time that we were approaching the idea of share buybacks and dividends and what is the timing, where we could where we could implement a dividend.
Speaker Change: So as we as we reduce leverage and that is the current priority. Some of these other opportunities for capital allocation will start to become.
Speaker Change: More relevant and and those you know in that context, again, where can we get the best return for our shareholders investing in our assets.
Speaker Change: Paying out dividends doing share buybacks I think it's fair to say, we would like to get to a normal course dividend at some point and so that's something that's on our radar and something we'll be working toward here and again.
Speaker Change: The gold prices hold at this level that somebody that could come sooner than later.
Speaker Change: Thank you I'm very happy to be a shareholder.
John Tumazos: Thanks, John I appreciate it.
Speaker Change: Thanks, John I've got lots of questions on line with I'll start with exploration main.
Speaker Change: The main presentation talked about the upside potential at greenstone underground near mine when are you going to start to look at those.
Speaker Change: We are.
Speaker Change: After doing that now.
Speaker Change: Make that down.
Speaker Change: And we do have significant exploration potential within pit there significantly inferred resources within the design.
Speaker Change: That's obviously some low hanging fruit that we will look to.
Speaker Change: Drill off its just a function of drill density will start that a little bit this year and that's really a focus for 2026.
Speaker Change: In my mind at this point.
Speaker Change: <unk>.
Speaker Change: The next phase would be the underground so this year.
Speaker Change: Desktop internally looking at it geologically so the engineering side of things.
Speaker Change: Really understanding and starting to work.
Speaker Change: A.
Speaker Change: Glenn how and when would be optimal to bring the underground into.
Speaker Change: The operations.
Speaker Change: Further a field, there's significant exploration potential the district, but it's.
Speaker Change: It's a substantive district 100 plus kilometers.
The length.
Speaker Change: We've got.
Speaker Change: We're going to we already when we need to do again, it's similar to the underground is our homework.
Speaker Change: Geologically engineering wise looking at Brookbank for example, the <unk>.
Speaker Change: Past producers that are east to west of that Leach sand river in the period more area.
Speaker Change: Looking at that from a geological perspective doing the completion target generation, what's the real potential.
Speaker Change: Engineering side looking at how if and how those would be bolt on or accretive to.
Speaker Change: Greenstone itself or whether they represented another standalone opportunity. These are all things that are going to take some time and then in conjunction with that we also have.
Speaker Change: To work through the process with our partners first nations communities to develop those agreements for long term stability.
Speaker Change: In those areas and it's going to be two plus years I'd imagine kind of in this homework phase before we're seeing any significant exploration regionally.
Speaker Change: Thank you.
Speaker Change: <unk> about that but he had complex. So you talk about the synergies between those two projects does that include the potential of blending or to help with the antibodies recovery.
Doug: Well I'll start and maybe I'll turn it over to Doug here.
Doug: For those that have been there for I guess for those that have not been there. Both of these mines are as a quote as the Crow flies, maybe 50 miles 60 miles from each other to plants, we have all the concessions between them contiguous concessions and we've got a fair amount of prosper activity across that overall portfolio. So when we looked at the two mines we.
Doug: Looked at.
Doug: What we could do you know obviously you can make it more efficient in terms of management administration costs tax et cetera, and really what this is it's a it's a corporate amalgamation down in Brazil.
Doug: And then a a.
Doug: Administrative amalgamation in terms of how we run the two months together, there's a number of benefits supply chain working capital et cetera.
Speaker Change: I'll pass it over to Doug described here more on the ability to triage material between the two plants.
Speaker Change: Suffice to say that we do have a fairly large land package. There. It is very perspective, we are very active on it and so that opportunity certainly exists. It's just a matter again of timing probably putting words in Scottsdale.
Speaker Change: Ill pass it over to him.
Speaker Change: I'll go first.
Speaker Change: Obviously with having to process plants.
Speaker Change: Different in nature, but sample is can process.
Speaker Change: Total organic carbon or low total organic carbon material.
Speaker Change: <unk>.
Speaker Change: Its quite flexible with the resin.
Speaker Change: That means that we would just be adding less kerosene to the process to suppress the activity of the carbon.
Speaker Change: It gives us flexibility to send or in either direction.
Speaker Change: We've got lots of targets, which Scott can talk about in a moment, but that is part of of sad to lose is constantly looking for opportunities to blend down the T. O C levels and I will note that even its the same greenstone belt, there's many similarities in the overall.
Speaker Change: Rock package, even at present, we blend down a small amount of total organic carbon that's been some of the bodies. It's just that we will operate with the with the standard.
Speaker Change: Carbon plant there and we don't have to use resin to be able to get the keep our recoveries in the around the 90% level. If you want to talk about deposits I'll pass it back to Scott Scherr.
Speaker Change: But he.
Scott Scherr: Has been the focus of committed exploration now for three years.
Scott Scherr: In the immediate presenter area, we saw the results of that in the updated technical report with substantive mine life growth those efforts will continue which.
Scott Scherr: Which is which is exciting there because it does give us the opportunity that resource reserve base to contemplate mine expansion opportunities.
Scott Scherr: Opportunities are presented.
Scott Scherr: Itself, but regionally the focus for the last few years has been to maintain or mineral rights.
Scott Scherr: Of trying to take.
Scott Scherr: Round two.
Scott Scherr: A small positive.
Scott Scherr: Small resources to be able to support.
Scott Scherr: Brazilian regulatory reporting requirements to maintain these mineral rates, we've been very successful at that.
Scott Scherr: And now with a whole bunch of regional targets identified.
Scott Scherr: Just don't discern the north and south of Santa loose.
Scott Scherr: Across the whole length of the 75 plus kilometer belt, we will now look to go back and flush of our understanding of that again to really map out the potential.
Scott Scherr: The.
Scott Scherr: Medium term is where it is going to get interesting because thats, where we start to contemplate.
Scott Scherr: Or is a different types of natures that might be blended or more optimal for one or the other and in these sorts of opportunities, but that's kind of a medium term approve.
Scott Scherr: Approach.
Speaker Change: Thank you I've got lots of online questions that I think have already been answered during the presentation. So I will get back to all of you by email if you've got any follow up questions, but we've got a whole bunch of about <unk>. One seamless wrap up question. So can you just provide a bit more clarity on what you mean that you've reached agreement with all three community fell only two have signed.
Scott Scherr: Well, we've had a dialogue with.
Speaker Change: Sure.
Speaker Change: Three communities, we've always agreed with the communities that we would talk to them.
Speaker Change: Altogether.
Speaker Change: We worked through key terms and ultimately.
Speaker Change: The agreement on the <unk> III.
Speaker Change: The key terms, but when it came to signing a final documents that laid out those key terms.
Speaker Change: We got two groups that signed in the third one who has not so.
Speaker Change: Essentially we need the overall final agreement from with all three communities to be able to to be able to move forward.
Speaker Change: That's everything great do you have any wrap up comments.
Speaker Change: Only to say I appreciate everyone joining the call today and of course, if you have any other questions. You can always reach out to relent or me or anyone here at equinox, we're always happy to respond.
Speaker Change: Great. Thank you very much. Thank you everybody for joining US operator, you can now conclude the call.
Speaker Change: Thank you Balan this brings to a close today's conference call. You may now disconnect. Your lines. Thank you for participating and have a pleasant day.
Speaker Change: Okay.
Speaker Change: [music].
Yeah.
Speaker Change: [music].