Q1 2025 Equinox Gold Corp Earnings Call
Thank you for standing by.
Thank you for standing by this is the conference operator, welcome to the Equinox Gold first quarter 2025 results and corporate update as a reminder, all participants are in listen only mode and the conference is being recorded.
Operator: This is the conference operator. Welcome to the Equinox Gold First Quarter 2025 Results and Corporate Update. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star, then zero.
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Operator: If you are participating through the webcast, you can submit a question in writing by using the text box in the lower left corner of the webcast frame.
Rhylin Bailie: I would now like to turn the conference over to Rhylin Bailie, Vice President, Investor Relations for Equinox Gold. Please go ahead.
Speaker Change: I would now like to turn the conference over to Roland Bailie, Vice President Investor Relations for Equinox Gold. Please go ahead.
Rhylin Bailie: Thank you, Operator. Thank you, everybody, for joining us this morning.
Speaker Change: Thank you operator, thank you everybody for joining us. This morning, we will of course see making a number forward looking statements. Today. So please do visit our website SEDAR and Edgar to learn more about our continuous disclosure documents I will now turn the call over to our president and CEO Greg Smith.
Rhylin Bailie: We will, of course, be making a number of forward-looking statements today, but please do visit our website, Cedar and Edgar, to learn more about our continuous disclosure documents.
Greg Smith: I will now turn the call over to our President and CEO, Greg Smith. Thanks, Rhylin. Good morning, everyone. And thanks for joining the call today. On the line with me is our COO, Doug Reddy, our CFO, Peter Hardy, our EVP of Exploration, Scott Heffernan and our VP of Investor Relations, Rhylin Bailie. Again, today we're discussing Equinox Gold 2025 first quarter financial and operating results. For those of you who are new to the company, Equinox Gold is a fast-growing, Americas-focused gold producer with mines across Canada, United States, Mexico, and Brazil.
Speaker Change: Thanks, <unk> good morning, everyone and thanks for joining the call today.
Speaker Change: On the line with me is our C O O Doug ready, our CFO, Peter Hardie, our EVP of exploration, Scott Heffernan, and our VP of Investor Relations.
Speaker Change: Bailey.
Speaker Change: Our agenda today, we're discussing equinox, Gold's 2025 first quarter financial and operating results.
Speaker Change: For those of you who are new to the company Equinox Gold is a fast growing Americas focused gold producer with mines across Canada, United States, Mexico and Brazil.
Greg Smith: I'm going to start with a broad overview of the first quarter and then I'll turn the call over to Pete and Doug for more detail. So starting with safety, our safety performance this quarter was good. Our 12-month rolling total recordable injury frequency rate across the entire company improved from last quarter to 1.95 per million hours worked. For the quarter, our total recordable injury frequency rate was 1.07 with two lost time injuries across all our operations. We also had no significant environmental incidents in Q1, maintaining our excellent significant environmental incident frequency rate of zero for the rolling 12 month period.
Speaker Change: I'm going to start with a broad overview of the first quarter and then I'll turn the call over to Pete and Doug for more details.
Speaker Change: So starting with safety our safety performance. This quarter was good our 12 month Rolling total recordable injury frequency rate across the entire company improved from last quarter to $1 95 per million hours worked.
Speaker Change: For the quarter, our total recordable injury frequency rate was 1.07 with two lost time injuries across all our operations.
Speaker Change: We also had no significant environmental incidents in Q1, maintaining our excellent significant environmental incident frequency rate of zero for the rolling 12 months period.
Greg Smith: During the first quarter, we produced just over 145,000 ounces of gold and sold approximately 148,000 ounces. These results represent the highest first quarter production in the company's history. And as in prior years, we expect quarterly production to increase over the course of the year. Including production and costs from Los Filos, cash costs was $17.69 per ounce, and all sustaining costs was $2,065 per ounce.
Speaker Change: During the first quarter, we produced just over 145000 ounces of gold and sold approximately 148000 ounces. These results represent the highest first quarter production in the company's history.
Speaker Change: And as in prior years, we expect quarterly production to increase over the course of the year.
Speaker Change: Including production.
Speaker Change: Production and costs from a few of those cash costs was $17 69 per ounce at all in sustaining cost was 2065 per ounce.
Greg Smith: Those results include Los Feliz, we did not include any production from the Los Feliz mine in our guidance for 2025 due to the need to establish new long term agreements with local communities to continue operation. So excluding production and costs from Los Feliz, cash costs per ounce was $16.37 per ounce, and all sustaining costs was $19.79 per ounce sold. As we press-released on April 1st, we were unable to conclude a new and necessary long-term agreement with one of the three communities at Los Filos, and so we have suspended operations at the mine.
Speaker Change: Those results include those of U S. We did not include any production from those fields mind and our guidance for 2025 due to the need to establish new long term agreements with local communities to continue operations. So excluding production and costs for la <unk> cash cost per ounce was 16 37 per ounce at all sustaining costs was 19 seven.
Speaker Change: Nine per ounce sold.
Speaker Change: As we press released on April 1st we were unable to conclude a new and necessary long term agreement with one of the three communities Atlas and.
Speaker Change: And so we have suspended operations at the mine.
Greg Smith: During the quarter, we also announced a proposed business combination with Caliber Mining. Last week, both Equinox shareholders and Caliber security holders voted in favor of the merger. And this week, Caliber received court approval for the transaction.
Speaker Change: During the quarter.
Speaker Change: We also announced a proposed business combination with caliber mining.
Speaker Change: Last week, both equinox shareholders and caliber security holders voted in favor of the merger and this week caliber received court approval for the transaction.
Greg Smith: We continue to expect this transaction to close sometime in the second quarter. I'm just going to make a few comments about this transaction now. This merger is really about two strong companies coming together to create a major new gold producer with our Greenstone mine in Ontario and Calibre's Valentine mine in Newfoundland as the foundation for the company. These are both brand new long life Canadian mines and together they'll make us the second largest producer of gold from Canada once they're both fully ramped up. The Canadian operations will be complemented by a diversified portfolio of other mines across the Americas with combined production of 950,000 ounces in 2025.
We continue to expect this transaction to close sometime in the second quarter.
Speaker Change: I'm just going to make a few comments about the transaction now.
Speaker Change: This merger is really about two strong companies coming together to create a major new gold producer with our greenstone mine in Ontario, and Calibers Valentine mine in Newfoundland as the foundation for the company.
Speaker Change: They're both brand new long life Canadian mines, and together it will make us the second largest producer of gold from Canada. Once they are both fully ramped up.
Speaker Change: Our Canadian operations will be complemented by a diversified portfolio of other mines across the Americas with combined production of 950000 ounces. In 2025. This is at the midpoint of the company's combined guidance.
Greg Smith: This is at the midpoint of the company's combined guidance. Once both Greenstone and Valentine are running at full capacity, we're on a path to produce over 1.2 million ounces per year. This substantial production profile immediately takes advantage of these record high gold prices, which will generate meaningful cash flow and accelerate our plans to deleverage the balance sheet and ultimately implement programs to return capital to our shareholders.
Speaker Change: Once both greenstone and Ballantyne and running at full capacity, we're on a path to produce over one 2 million ounces per year.
Speaker Change: This substantial production profile immediately takes advantage of these record high gold prices.
Speaker Change: Which will generate meaningful cash flow and accelerate our plans to deleverage the balance sheet and ultimately implement programs to return capital to our shareholders.
Peter Hardy: And with that, I'm going to turn this over to Pete to discuss our financial results. Thanks, Greg. We're now on slide six of the presentation. In addition to this being Equinox's best production for a key one, it's also our third straight quarter with more than $400 million in revenue. With respect to the operations, Greenstone unit costs were higher in the quarter compared to Q4. We had planned for Q1 to be our lowest production quarter. During Q1, we added four haul trucks to the fleet and incurred the related costs with operating them. There are no further haul truck additions planned for the year.
Speaker Change: And with that I'm going to turn this over to Pete to discuss our financial results.
Pete: Thanks, Greg we're now on slide six of the presentation. In addition to this being Equinix is the best production for Q1, it's also our third straight quarter with more than $400 million in revenue with.
Speaker Change: With respect to the operations greenstone unit costs were higher in the quarter compared to Q4, we had planned for Q1 to be our lowest production quarter. During Q1, we added four haul trucks to the fleet and incurred related costs with operating them. There are no further haul truck additions planned for the year. In addition, we performed plant maintenance during Q1.
Peter Hardy: In addition, we performed plant maintenance during Q1 to remediate items that we had noted were impeding the ramp-up. We've seen the benefits of that maintenance by way of increasing throughput through March and April. We expect Greenstone's unit cost to decline throughout the year with increasing gold production. Included in the quarter's results are $65 million of non-recurring charges. We had an accounting adjustment for depreciation of $25 million at RDM in St. Louis that is non-recurring. In addition, for Los Feliz, we had a $29 million inventory net realizable value adjustment resulting from moving leach pad inventory from current to long term and using long term instead of short term gold prices to value that inventory.
Speaker Change: To remediate remediate items that we had no debris impeding the ramp up.
Speaker Change: We've seen the benefits of that maintenance by way of increasing throughput through March and April.
Speaker Change: We expect Green stones unit cost to decline throughout the year with increasing gold production.
Speaker Change: Included in the quarter's results are $65 million of nonrecurring charges, we had an accounting adjustment for depreciation of $25 million at RDM in Santa lose that as nonrecurring. In addition for those few of those we had a $29 million inventory net realizable value adjustment, resulting from moving leach pad inventory from current to long term and using long.
Speaker Change: Term instead of short term gold prices the value of that inventory.
Peter Hardy: and that's as a result of the suspension of the operation. In addition, there are 10 million of Los Filo Mine Suspension Charters recorded as care and maintenance. Further, for Q2, At Los Feliz, we expect approximately $35 million in mine suspension and care and maintenance charges for the second half of 2025. We expect carrying costs at Los Feliz to be about $2.5 to $3 million per month, and we'll look to reduce those monthly carrying charges as we work our way through the year. With commercial production achieved at Greenstone in Q4, interest costs that were being capitalized to the project are now entirely expensed through the income statement.
Speaker Change: And that's as a result of the suspension of the operations in.
Speaker Change: In addition, there are 10 million of loss of yellow mine suspension charges recorded just care maintenance.
Speaker Change: Further for Q2.
Speaker Change: Atlas via those we expect approximately $35 million in mind suspension and care and maintenance charges for the second half of 2025, we expect carrying costs unless via those to be about two and a half to $3 million per month, and we will look to reduce those monthly carrying charges as we work our way through the year.
Speaker Change: With commercial production achieved at greenstone in Q4 interest costs that were being capitalized to the projects are now entirely expensed through the income statement.
Peter Hardy: All interest costs will be expensed going forward. In addition, there was an expense of $15 million for the increase in a gold price-linked payment that Equinox assumed as part of the consolidation of Greenstone ownership. While we drew on the revolving credit facility after the quarter end, with the increasing production profile through the remainder of the year, we expected to be our last draw and our focus now switches to paying down debt, and I'll speak more to that in a moment. We're now on slide 7 of the presentation. Equinox Gold had $173 million in unrestricted cash at the end of Q1.
Speaker Change: All interest costs will be expense going forward. In addition, there was an expense of $15 million for the increase in our gold price linked payments that equinox assumed as part of the consolidation of greenstone ownership.
Speaker Change: While we drew on our revolving credit facility after the quarter end with the increasing production profile through the remainder of the year, we expect it to be our last draw and our focus now switches to paying down debt and I'll speak to more more to that in a moment. We're now on slide seven of the presentation.
Speaker Change: Equinox gold at 173 million in unrestricted cash at the end of Q1 during the quarter, we drew $40 million on our revolving credit facility and invested $40 million in caliber mining convertible notes the caliber convertible debenture provides them a liquidity contingency buffer as they complete Valentine construction should close of the merger be unexpectedly prolonged not that we.
Peter Hardy: During the quarter, we drew $40 million on the Revolving Credit Facility and invested $40 million in Caliber Mining Convertible Notes. The Caliber Convertible DeVenture provides them a liquidity contingency buffer as they complete Valentine construction should close of the merger be unexpectedly prolonged. Not that we expect that. We will cancel the $40 million of Caliber Convertible Notes on close of the merger. We're now on slide eight of the presentation. Note that the 2025 and 2026 data on this slide is analyst consensus. With Greenstone Rampant progressing at current gold prices, the company should generate strong cash flow in the second half of the year and beyond that can be devoted to reducing debt and unwinding the balance sheet.
Speaker Change: I expect that we will cancel the $40 million of caliber convertible notes on close of the merger.
Speaker Change: We're now on slide eight of the presentation note that the 2025 and 2026 data on this slide is the analysts' consensus.
Speaker Change: With greenstone rapid progressing at current gold prices the company should generate strong cash flow in the second half the year and beyond that can be devoted to reducing debt and unwinding the balance sheet to start in March we made the first of the 3900 ounces per month gold deliveries that runs through September 2020 six to begin reducing the deferred revenue balance on a.
Peter Hardy: To start in March, we made the first of the 3,900 ounces per month gold deliveries that run through September 2026 to begin reducing the deferred revenue balance on 87,000 prepay ounces. For 2025, we expect to reduce the obligation by 39,000 ounces and $74 million. As of March 31, 2025, the company had head collar head collar arrangements on 90,000 ounces of gold that were put in place for the $500 million term loan used to help fund the Greenstone ownership consolidation in May last year. Hedges on 50,000 of those ounces mature in a straight line through Q2 2025.
Speaker Change: 7000 prepaid ounces for 2025, we expect to reduce the obligation by 39000 ounces and $74 million.
Speaker Change: As at March 31st 2025, the company ahead coloring trend head color arrangements on 90000 ounces of gold that were put in place for the $500 million term loan used to help fund the greenstone ownership consolidation in May last year.
Speaker Change: Hedges on 50000 of those ounces mature in a straight line for Q2 2025. The average ceiling on those ounces is 2900 per ounce. The remaining of the 40000 hedges mature at about 10000 ounces per quarter from Q3 through the end of Q2 next year and have a ceiling of about 3500 per ounce.
Peter Hardy: The average ceiling on those ounces is 2,900 per ounce. The remaining of the 40,000 hedges mature at about 10,000 ounces per quarter from Q3 through the end of Q2 next year and have a ceiling of about 3,500 per ounce. We look forward to predominantly unwinding the hedges by the end of Q2. With respect to reducing debt, there's a $140 million convertible note that matures in September with a conversion price of U.S. $6.50 per share that we intend to retire when it matures. This note has been largely in the money since the beginning of February. If the note converts to shares on maturity, then the $140 million that would have been used to repay it will instead be used to pay down the revolving credit facility or term loan.
Speaker Change: We look forward to predominantly on wining the hedges by the end of Q2.
Speaker Change: With respect to reducing debt, there's a $140 million convertible note that matures in September with a conversion price of U S. $6 50 per share that we intend to retire when it matures. This note has been largely in the money since the beginning of February if the note converts to shares a maturity than the $140 million that would've been used to repay it will instead be used to pay down the revolving credit.
Speaker Change: Our term loan.
Peter Hardy: Following retirement of the convertible note, free cash flow will be devoted to paying down the company's credit facility.
Speaker Change: Following retirement of the convertible note free cash flow will be devoted to paying down the company's credit facilities and with that I'll turn the presentation over to Doug to discuss our Q1 operating results.
Doug Reddy: And with that, I'll turn the presentation over to Doug to discuss our Q1 operating results. We're now on slide nine of the presentation. At Greenstone, in Q1, the mine and mill performed well through the first full winter producing 44,449 ounces. Ramp up continued with an average of 137,000 tons a day moved in the quarter, and that continued to increase in April and averaged 165,000 tons per day coming into May. Some loading unit challenges impacted availability, but the disruptions were generally short term. And the fleet was expanded with the addition of the four CAT 793s, bringing it to a total of 29 trucks.
Doug: Pete we're now on slide nine of the presentation.
Speaker Change: At greenstone in Q1, the mine and mill performed well through the first full winter producing 44449 ounces ramp.
Speaker Change: The ramp up continued with an average of 137000 tons a day moved in the quarter.
Speaker Change: And that continued to increase in April and averaged 165000.
Speaker Change: Turns per day coming in to me.
Speaker Change: Some loading unit challenges impacted availability, but the disruptions were generally short term.
Speaker Change: And the fleet was expanded with the addition of the four.
Speaker Change: At 793 is bringing us to a total of 29 trucks as noted in the last quarterly call. We are adding an additional PC 5500 shovel double arrive in June and be operational by July 1st.
Doug Reddy: As noted in the last quarterly call, we are adding an additional PC-5500 shovel that will arrive in June and be operational by July 1st. The mining team is also focused on additional RC grade control drilling, blast movement optimization, doing larger blasts, which are now hitting over a million tons per blast, and doing fletched mining, which helps with selectivity. Our mining flexibility has improved with the pit enlargement now that we removed the central area that was impeded while we moved some contaminated soil. So we're getting the whole pit to one level, which is good for for flexibility in mining.
Speaker Change: The mining team is also focused on additional RC grade control drilling.
Speaker Change: Moving to optimization.
Speaker Change: Larger blocks, which are now hitting over a million tons per blast and doing pledged binding which helps with selectivity.
Speaker Change: Our mining flexibility has improved with the pit enlargement.
Speaker Change: Move the central area, there was impeded while we moved some contaminated soil. So we're getting the whole pit to what level, which is good for her flexibility in mining.
Doug Reddy: On the process plant side, we averaged over 18,600 tons per day on the crushing and over 18,400 tons per day on the milling in the quarter and continued ramping up into April. Milling is now over 23,400 tons a day or 87% of design capacity. Downtime was reduced and CIP tank modifications were completed through numerous changes in the mill, which we had said in advance that we were going to do in Q1. And overall, we've seen the mill stability improve, and the maintenance intervals continue to lengthen, which further boosts our overall efficiency.
Speaker Change: The process plant side, we averaged over 18600 tonnes per day on the crushing.
Speaker Change: And over 18400 tons per day on the milling in the quarter and continued ramping up into April milling is now over 23400 tons, a day or 87% of design capacity down.
Speaker Change: Downtime was reduced in CIP tank modifications were completed.
Speaker Change: Through numerous changes in the mill, which we have said in advance that we were going to do in Q1 and overall, we've seen the mill stability improve and the maintenance intervals continued to lengthen, which further boosts our overall efficiency.
Doug Reddy: At the Mesquite Mine, gold production was 12,271 ounces. That was principally from side slope leaching and was above plan for the quarter. Mining in the Quarter was predominantly waste stripping of the ginger pit. We did have early access to ore in ginger, and were able to stack more ounces than planned at the end of March, and that ore started to report to the ADR plant in April and May. About 93% of ore mined in 2025 will be from the ginger pit. We've also started waste stripping in the Brownie 4 pit and that will provide ore production late in 2025 and into 2026.
Speaker Change: At the Mesquite mine gold production was 12271 ounces that was principally from sites leaching and was above plan for the quarter.
Speaker Change: Mining in the quarter was predominantly waste stripping of the Ginger pit. We did have early access to ore in ginger and we're able to stack more ounces than planned at the end of March.
Speaker Change: That or started to report to the ADR plant in April and May.
Speaker Change: About 93% of ore mined in 2025 will be from the Ginger pit. We've also started waste stripping in the brownie four pit and that will provide more production late in 2025 and into 2026.
Doug Reddy: I also want to note that during the quarter, Mesquite passed six million hours with no lost time incidents. And that's a testament to the attention to safety that's being paid by personnel in all areas and all levels at that moment.
Speaker Change: I also want to note that during the quarter mesquite past six months.
Speaker Change: Alright.
Speaker Change: <unk> past 6 million hours with no lost time incidents.
Speaker Change: It's a testament to the attention to safety, that's being paid by personnel in all areas and all levels at that mine.
Doug Reddy: Excuse me. At Los Feliz, minor amounts of open pit and underground mining continued into January. Production was 31,518 ounces. That was mostly from leaching of the ore that was stacked in Q4 and January, and the rest was coming from residual As mentioned earlier, operations have been suspended indefinitely and no further leaching is occurring at Los Feliz.
Speaker Change: Excuse me.
Speaker Change: That loss pillows minor amounts of open pit and underground mining continued into January production was 31518 ounces that was mostly from leaching of the ore that was stacked in Q4 in January and the rest was coming from residual leaching.
Speaker Change: As mentioned earlier operations have been suspended indefinitely and no further leaching is occurring at lost pillows.
Doug Reddy: On the next page. In Brazil, at the Arizona mine, the rainy season was in full swing in Q1, but mining did well, and the rain is now beginning to taper off. Mining was principally in the Piaba and Tatajuba pits, and we are ahead of plan on ore tons moved, although a bit behind on waste moved. We had higher grades from the Piava Pit at around 1.2 grams per ton, and Tata Juva tends to be lower average grade at just under 1 gram per ton. Stockpiles are used to supplement plant feed as necessary during the rainy season.
Speaker Change: On the next page.
Speaker Change: In Brazil, yes.
Speaker Change: Arizona mind, the rainy season was in full swing in Q1, but mining did well and the rain is now beginning to taper off.
Speaker Change: Mining was principally in the Piazza and Pat to Juba pits and we are ahead of plan on ore tonnes moved although a bit behind on waste movement.
Speaker Change: We had higher grades from the pit at around one two grams per tonne and touches you've it tends to be lower average grade of just under one gram per tonne stock.
Speaker Change: Stockpiles are used to supplement plant feed as necessary during the rainy season, and gold production was 15555 ounces and on track with our expectations for the quarter.
Doug Reddy: And gold production was 15,555 ounces and on track with our expectations for the quarter. Remediation work on the Piava Open Pit area is complete, and the 14 dewatering holes that were drilled prior to and during the rainy season have performed very well during the heavy rain. Later in the year, we are planning to mine the western extension of the Tadizhuba open pit and we also plan to start work on the underground portal and ramp in late 2025 once the rainy season is over. At the Bahia Complex, production was 27,565 ounces, and at Fazenda, open pit mining focused on the larger CLX open pit, which encompasses several smaller pits and areas that were mined previously and from the underground mining that was done in the earlier years of Fazenda's 40-year mine life.
Megan: Megan <unk>.
Megan: Remediation work on the peer of the open pit area is complete and the 14 dewatering holes that were drilled prior to and during the rainy season has performed very well during the heavy rains.
Megan: Later in the year, we are planning to mine the western extension of the <unk> open pit and we also plan to start work on the underground portal and ramp in late 2025 once the rainy season is over.
Megan: At the Bahia complex production was 27565 ounces agenda open pit mining focused on the largest see Alexa open pit, which encompasses several smaller pits in areas that were mined previously and from the underground mining that was done in the earlier years of present those 40 years.
Megan: Mine life.
Doug Reddy: Open pit mine tons and grade were low at the start of the year and approved through the quarter. Underground mining at Fazenda was strong with 1,900 tons per day of ore being moved and over 3,000 tons per day of ore and waste being moved. And in the underground, we are transitioning to a long hole retreat mining method. feed grade to the CIL plant was low for the quarter at 1.26 grams per ton that will improve in this quarter and recovery was 89%. At Santa Luz, mine grade was up at 1.6 grams per ton from the C1 pit and 0.6 grams per ton as we started mining the A2 pit.
Megan: Open pit mine tonnes and grade were low at the start of the year and improved through the quarter.
Megan: Underground mining at presenter was strong with 1900 tonnes per day being of or being moved in over 3000 tonnes per day of ore and waste being moved in in the underground we are transitioning to a long haul retreat mining method.
Megan: Feed grade to the CIL plant was low for the quarter at 1.26 grams per tonne that will improve.
Megan: In this quarter and recovery was 89%.
Megan: Sad to lose mine grade was up at one six grams per tonne from the C. One pit at <unk> six grams per ton as we started finding the a two pit.
Doug Reddy: Feed grade to the resident leach plant was 1.3 grams per ton. Recovery dipped in the quarter to 60% as we dealt with some sulfide and arsenopyrite bearing ore in addition to the high TOC, total organic carbon that was going into the resident leach plant. And we stabilized at 64% in April for recovery. A sixth leach tank is in construction and planned to come online in July. That will allow for servicing of the other tanks and increase our overall residence time, which will benefit recovery in the long term.
Megan: B grade to the resident Leach plant was one three grams per tonne.
Megan: Recovery dipped in the quarter to 60% as we dealt with some sulphide and arsenopyrite bearing or the in addition to the five T.
Megan: T O C total organic carbon that was going into the or the resident Leach plant and.
Megan: And we stable at 64% stabilized at 64% in April for a recovery.
Megan: Our six Leach tank is in construction or planned to come online in July.
Megan: It will allow for servicing of the other tanks and increase our overall residence time, which will benefit recovery and the long term.
Doug Reddy: At RDM, gold production was 10,710 ounces for the quarter, ore mining was low while pushback seven was advancing on the hanging wall of the pit. And a footwall pushback was being completed to recover ore that had been left behind years ago in the upper portion of the pit wall. Average feed grade to the plant was 0.55 grams per ton and reflects the use of low grade ore while pushbacks are underway to give access to the higher grade ore. The new dry stack tailings facility has worked out well and we've started construction of the expansion to that facility for this storage area.
Megan: At <unk> gold production was 10710 ounces for the quarter or mining was low while pushback seven was advancing on the hanging wall of the pit.
Megan: The footwall pushback was being completed to recover awards that have been left behind years ago with the upper portion of the pit wall.
Megan: Average feed grade to the plant was 0.55 grams per ton and reflects the use of low grade ore while the push backs are underway to give access to the higher grade ore.
Megan: The new dry stack tailings facility has worked out well when we started construction of the expansion to that facility for the storage area.
Doug Reddy: We've also started, we've also switched to an owner fleet for haulage of the dry tails and that should help lower our overall costs at party.
Megan: We've also started was also switched to an owner fleet for haulage of the dry tails and that should help lower our overall costs are pretty good.
Greg Smith: with that I'll hand it back to Greg. Thanks, Doug. We'll move on to Q&A in just a second here.
Megan: With that I'll hand, it back to Greg. Thanks.
Greg Smith: Thanks, Doug.
Greg Smith: We'll move on to Q&A in just a second here I'll just conclude by saying we're very pleased to have received the support of our shareholders for our transaction with caliber mining and we look forward to getting the deal done. This close this given the deal closed this quarter.
Greg Smith: I'll just conclude by saying we're very pleased to have received the support of our shareholders for our transaction with Caliber Mining and we look forward to getting the deal done this close this or getting the deal closed this quarter.
Greg Smith: On our next call we'll be reporting as a combined company and as Greenstone continues to ramp up and Valentine commences production later this year we'll start to see the substantial benefit of having these two low-cost long-life mines in one company.
Greg Smith: On our next call will be reporting as a combined company and his greenstone continues to ramp up and Valentine commences production. Later this year, we'll start to see the substantial benefit of having these two low cost long life mines in one company.
Rhylin Bailie: I think now, Rhylin, let's move to Q&A. Sure. Operator, can you please remind people how to ask a question? Certainly. Once again, to join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then 2. If you are participating through the webcast, you can submit a question in writing by using the text box in the lower left corner of the webcast frame. We will pause for a moment as callers join the queue.
Greg Smith: I think now ruined let's move to Q&A.
Speaker Change: Peter can you please remind people how to ask the question.
Peter: Certainly once again to join the question queue. You May Press Star then one on your telephone keypad, you'll hear atone acknowledging your request if youre using a speakerphone. Please pick up your handset before pressing any keys to withdraw your question. Please press Star then two.
Peter: If you are participating through the webcast you can submit a question in writing by using the text box in the lower left corner of the webcast frame, we will pause for a moment as callers join the queue.
Rhylin Bailie: Thank you.
Rhylin Bailie: While we're waiting, we'll take some of the questions that we've got online.
Peter: Thank you.
Peter: I'll take some of the questions that we've got online. So we do have a few questions about greenstone I'll try to combine <unk>. When do you expect greenstone to be operating at capacity and will that bring your cost down closer to your target.
Rhylin Bailie: So we do have a few questions about Greenstone. I'll try to combine them into one. When do you expect Greenstone to be operating at capacity, and will that bring your costs down closer to your target?
Greg Smith: Sure, I can take that, Rhylin. Yeah, Greenstone is continuing to ramp up over the course of the year. Design capacity of the plant is 27,000 tons per day, and we expect to be in and around that range as we move into the second half of the year here. In April, the mine, or sorry, the plant was producing at 87% of design capacity. Some of the work we did in Q1 on the plant is actually really starting to pay dividends here as we move into April and into May, so very happy with the way the plant is progressing at Greenstone.
Berlin: Sure I can take that Berlin.
Berlin: Yeah greenstone is continuing to ramp up over the course of the year.
Berlin: Design capacity of the plant has 27000 tonnes per day.
Berlin: We expect to be in and around that range as we move into the second half of the year here in April the mine or sorry, the plan was producing at 87% of design capacity.
Berlin: The work we did in Q1.
Berlin: On the plant is actually really starting to pay dividends here as we move into April into May So very happy with the way. The plant is progressing at greenstone on the mining side, that's probably an area, where we've had more challenges in Q1, we did increase the size of the fleet by four haul trucks, which was great, but we did have.
Greg Smith: On the mining side, that's probably an area where we've had more challenges in Q1. We did increase the size of the fleet by four haul trucks, which was great, but we did have some issues with availability of our PC5500 chromatic loaders, and that was probably the biggest single issue in terms of moving tons in the first quarter. As Doug mentioned, we do have an additional incremental shovel arriving in June. It'll be operating in July, and that combined with the increase in the fleet should result in an ability to move a lot more tons, and we're already seeing availabilities improve on our existing fleet, and mining rates have increased a fair bit in April, 160 on average.
Berlin: Some issues with availability of our P. C 5500 dramatic voters and that was probably the biggest single issue in terms of moving tons in the first quarter as Doug mentioned, we do have an additional.
Berlin: Incremental shovel arriving in in.
Berlin: In June it'll be operating in July and that combined with the increase in the fleet should result in an ability to move a lot more time and we're already seeing.
Berlin: Availabilities improve on our existing fleet and mining rates have increased a fair bit.
Berlin: In April 160, <unk> on average and that is what the 565. So we're continuing to see increase in mining rates as well and I think that will only continue to improve as we get into the warmer weather and in particular, when we get the additional shovel on site.
Greg Smith: 165. 165, so we're continuing to see increase in mining rates as well, and I think that'll only continue to improve as we get into the warmer weather, and in particular when we get the additional shovel on site.
Greg Smith: One other question that came in. How many downtime did you see during the quarter? You mentioned that those are improving. Yeah, we had a total of 10 down days on in the plant. But we were able to, because we have a crushed ore dome and an emergency stockpile, we were able to limit the number of days that affected the milling circuit.
Berlin: One other question.
Speaker Change: How many downtime did you see during the quarter you mentioned that those are improving yeah. We had a total of 10 down days on the plant.
Berlin: We were able to.
Berlin: Because we have crushed ore or don't an emergency stockpile were able to limit the number of days that affected the milling circuit. So of 10 in total, but we were doing things that we said we were gonna do fixing.
Greg Smith: So about 10 in total, but we were doing things that we said we were going to be fixing downcomers that were causing some short circuiting in our tanks, and modifying valves that allowed for some leakage as well as changing slurry pumps, screen decks, and some springs on the screens that were requiring frequent change out. So all of those have been rectified. We're getting much longer periods between having to do shutdowns. So we're pleased with the progress.
Berlin: Downcomer as that were causing some short circuiting in our tanks.
Berlin: And modifying valves that allowed for some leakage as well as changing slurry pumps.
Berlin: Screen decks.
Berlin: Some springs on the screens that were requiring frequent change out. So all of those have been rectified, we're getting much longer periods between having to do shutdowns. So.
Berlin: We're pleased with the progress.
Berlin: Obviously.
Berlin: Obviously impacted the quarter, but we've seen we're seeing the benefits coming into April and May.
Operator: It, you know, Operator, can we take some questions from the phone, please? Certainly.
Speaker Change: Perfect. Thank you operator can we take some questions from the phone please.
Wayne Lam: The first question comes from Wayne Lam with TD Securities. Please go ahead. Hey, morning, guys.
Operator: Certainly the first question comes from Wayne Lam with TD Securities. Please go ahead.
Wayne Lam: Hey morning, guys.
Wayne Lam: I guess first question, maybe just wondering on the balance sheet with the revolver nearly drawn down now, just wondering how you're thinking about flexibility in the event of a more drawn out ramp up at Greenstone? And would you be looking to refinance shortly, maybe after the close of the transaction? And then just curious on the capacity to fund two new mine ramp ups here, and how you're thinking about any contingency plans? Yeah, so with respect to our liquidity, available liquidity, we do have a planned refinancing of our revolving credit facility. And I want to emphasize that was planned for this quarter.
Wayne Lam: I guess first question, maybe just wondering if the balance sheet with the revolver nearly drawn down now just wondering how you're thinking about flexibility in the event of a more drawn out ramp up that greenstone and would you be looking to refinance shortly maybe after the close of the transaction and then just curious on the capacity to fund two new mines.
Wayne Lam: Ups here and how you're thinking about any contingency plans.
Wayne Lam: Yeah, so with respect to our liquidity available liquidity.
Wayne Lam: We do have a planned refinancing of our revolving credit facility and I want to emphasize that was planned for this quarter.
Peter Hardy: But that said, Wayne, if we're, you know, we've seen great improvement in April with performance at Greenstone. And assuming that continues, and we hit our targets throughout the year, we don't believe any further draws are required. And we're actually very much looking forward to starting to pay down debt in the second half of the year.
Speaker Change: But that said Wayne if if we're we've seen great improvement in April with performance at greenstone and assuming that continues and we hit our targets throughout the year.
We don't believe any further draws are required and we're actually very much looking forward to starting to pay down debt in the second half of the year.
Greg Smith: I guess I just add Wayne that Caliber also released their results and confirmed they're fully funded to get Valentine into production here. And so you know, between the two companies, I don't see a liquidity issue coming up here in particular in the second half of the year, production increases, costs come down, Valentine comes online, Greenstone's ramped up. Okay, understood.
Speaker Change: I guess I'd just add Wayne that caliber also released their results and confirm therefore, we funded to get Valentine into production here and.
Speaker Change: So between the two companies I don't see a liquidity issue coming up here in particular in the second half of the year production increases cost come down Valentine comes online it sounds wrapped up.
Speaker Change: Yeah.
Speaker Change: Okay understood.
Greg Smith: And then maybe, just to follow up to the prior question on on the Greenstone ramp up, maybe if you could give us a bit more detail on some of the changes at the mill and what you might need for improved availability to get closer to the nameplate capacity. And then just curious on maybe on the cost side, if you're seeing any pressures on things like labour and if you're still confident in getting to the full year cost guidance given the challenges in the quarter. So in the mill, we had said at the end of last year that in Q1, we were going to be making changes on slurry pumps and also modifications in our tanks, specifically in valves and downcomers.
Speaker Change: And then maybe just a follow up to that prior question on on the Greenfield ramp up.
Speaker Change: But if you could give us a bit more detail on some of the changes at the mill.
Speaker Change: And what you might need for improved availability to get closer to the nameplate capacity and then just curious on maybe on the cost side, if you're seeing any pressures on things like labor and if you're still confident in getting to the.
Speaker Change: Full year cost guidance, given the challenges in the quarter.
Speaker Change: So in the mill, we had said in the end of last year, and Q1, where are we going to be making changes on the slurry pumps and.
Speaker Change: Also modifications in our tanks, specifically in valves and don't covers all of that's been done at the same time, we've made a lot more modifications and other areas.
Greg Smith: All that's been done. At the same time, we made a lot more modifications in other areas when we had the downtime happening. And it's all been driven towards, well, obviously, stopping short-circuiting the tanks, which will improve our recovery long-term, but also to be able to extend the periods between downtime. So just, for example, changing the springs out and related to our screen decks has enabled us to be able to push out the periods between downtime. The reduced downtime that we see in April to May is testament to one of the aspects of being able to bring the tons per day up to 87% of capacity.
Speaker Change: When we had the downtime happening in.
Speaker Change: It's all been driven towards while obviously stopping short circuiting, the tanks, which will improve our recovery long term, but also.
Speaker Change: To be able to extend the periods between downtime. So just for example, changing the springs out in there related to our screen decks has enabled us to be able to push over the periods between downtime the reduced downtime that we see in April and May is a testament to one of the aspects of being able to bring.
Speaker Change: The the tons per day up to 87% of capacity.
Peter Hardy: And then on the cost side, it's Peter. And As I was saying in my comments Greenstone has been scaled up from a cost structure perspective to what's required to achieve its goals for the year. And it being a low production quarter in Q1, as was part of the plan, understandably the cost per unit there are higher than prior quarter or in Q3 while it was still in commissioning prior to commercial production. We do believe, again, if we're on track with respect to continuing progress that we're seeing, that we're on track overall for our guidance for the year.
Speaker Change: And then on the cost side.
Speaker Change: It's here.
Speaker Change: And.
Speaker Change: As I was saying in my comments.
Speaker Change: Greenstone has been scaled up from a cost structure perspective to what's required to achieve its goals for the year.
Speaker Change: And it being a a low production quarter in Q1 as it was part of the plan are understandably the cost per unit, there are higher than prior quarter or or or in Q3, while it was still in a commissioning private commercial production.
Speaker Change: We do believe again, if we're if we're on track with respect to continuing progress that we're seeing that are on track overall for our guidance for the year.
Wayne Lam: Okay, great.
Speaker Change: Okay, Great and then maybe just last one let's fellows are there still ongoing negotiations or discussions being had there that that leave you constructive on getting a deal done or things that more of an impasse with the third community and then maybe if you.
Wayne Lam: And then maybe just last one at Los Feliz, are there still ongoing negotiations or discussions being had there that that leave you constructive on getting a deal done? Or things that more of an impasse with the third community?
Wayne Lam: And then maybe if you could provide a bit more clarity on approximate care maintenance costs there?
Speaker Change: Could provide a bit more clarity on approximate care maintenance cost there.
Greg Smith: Sure, Wayne, it's Greg speaking, I'll start. The, I think the best way to describe it is the way you just did, impasse. You know, we spent a year, more than a year negotiating with all three communities, the government was involved, a number of stakeholders were involved. We came to terms with all three communities, signed a call it a heads of agreement document on that basis. executed the two agreements with well executed long term new agreements with two of the communities, the third community elected not to sign a new long term agreement, the existing agreement expired.
Greg Smith: Youre weighing is Greg speaking I'll start.
Speaker Change: I think the best way to describe it is the way you just did impasse.
Speaker Change: We spent a year more than a year of negotiating with all three communities. The government was involved a number of stakeholders were involved we came to terms with all three communities signed a call. It a heads of agreement.
Speaker Change: Document on that basis.
Speaker Change: Executed the two agreements with well executed long term new agreements with two of the communities. The third community elected not to sign a new long term agreement the existing agreement.
Greg Smith: And so we suspended operations. And the reality is that the terms we negotiated with the three agreements are really the best we can do. You know, we need to maintain the economic integrity and the investability of that asset of Los Filos. You know, it has the potential to be a great mine, but it does require a substantial amount of investment. And it's critical that you have agreements in place to support that investment. And so at this stage, not a lot happening on that basis. And of course, we're always open to dialogue. But at this point, I would not expect anything to move on that basis at Los Filos in the near term.
Speaker Change: Aspired and so we suspended operations and the reality is that the <unk>.
Speaker Change: Terms, we negotiated with the three agreements.
Speaker Change: Are really the best we can do you know we need to maintain the economic integrity in the invest ability of that asset as most of you most.
Speaker Change: The potential to be a great mine, but it does require a substantial amount of investment and it's critical that you have agreements in place to support that investment.
Speaker Change: And so at this stage.
Speaker Change: Not a lot happening on that basis and of course, we're always open to dialogue.
Speaker Change: But at this point I would not expect anything to move on that basis. It wants to be able to in the near term.
Greg Smith: You know, I think it's fair to say, don't expect any production from Los Filos for the rest of this year. Okay, so and sorry, just one follow up. But in terms of your your comment on the economics, they're like that stance wouldn't change with the gold price move that we've seen. Well, I guess it's, I guess one way to put it is Our stance evolved over the course of a negotiating period. So, you know, gold prices go up, gold prices go down, but you have inflation to take into account as well, costs, etc. And so again, there's only so much you can do when you're planning for the long term.
Speaker Change: <unk>.
Speaker Change: I think it's fair to say you don't expect any production from those fields for the rest of this year.
Speaker Change: Okay, and sorry, just one follow up but.
Speaker Change: In terms of your your comment on the economics, there like that stance wouldn't change with the gold price moves that we've seen.
Speaker Change: Well I guess, it's I guess, one way to put it is.
Speaker Change: Our stance has evolved over the course of the negotiating period. So gold prices go up gold prices go down, but you have inflation to take into account as well costs et cetera, and so again theres only so much you can do when you're planning for the long term and.
Greg Smith: And, you know, obviously, gold prices are helpful to the economics of any mind. But Again, you know, without getting into the into the details of how these negotiations played out at this stage, no, it doesn't have an effect on our position.
Speaker Change: Obviously gold prices are helpful to the economics of any mine, but.
Speaker Change: Again without getting into the into the details of how these negotiations played out at this stage no. It doesn't have an effect on our position.
Wayne Lam: Okay, great. Thanks for taking my questions and best of luck in the months ahead.
Speaker Change: Okay, great. Thanks for taking my questions on the best of luck in the months ahead.
Mike: Thanks, Mike.
Anita Soni: And your next question comes from Anita Soni with CIBC World Markets. Please go ahead. Good morning, Greg, Doug, and Peter. Thanks for taking my question.
Speaker Change: And your next question comes from Anita Soni with CIBC World markets. Please go ahead.
Speaker Change: Good morning, Greg and Peter Thanks.
Anita Soni: I just wanted to drill a little bit down into sort of the way grades and tonnages, the way you see them evolving at Greenstone over the next three or four quarters. So I think you said the lower grades were a result of mine sequencing, but it sounds like you also had some challenges with the equipment in the pit. How long do you think you would be in, when will you be accessing higher grade areas in the pit? And then, you know, How do you think the plant's going to, how do you think the mine's going to keep up with the plant over the course of the year?
Speaker Change: Thanks for taking my question I, just wanted to drill a little bit down into sort of the way grades and tonnage. So when you see them evolving it and try it.
Speaker Change: Installing over the next three or four quarters. So I think you said the lower grades or.
Speaker Change: As a result of mine sequencing, but it sounds like you also had some challenges with the equipment and the pet how long do you think you would be in and when will you be accessing higher grade.
Speaker Change: Yeah, it's in the pitch and then.
Speaker Change: Like how would you how do you think the plant's going to how do you think the mine can keep up with the plant over the course of the year.
Greg Smith: We'll refer to what we said in the last call as well was, we were expecting to be at this grade for Q1. We see it ramping up during the course of the year and getting to 1.5, 1.6 in the latter part of the year. So grade wise, it's evolving the way we expected. We are a bit slower on the mining, yes. We wear that and that pushes things out a little bit. So at the back end of the year, we may end up with not as much, not getting the higher grade as quickly as we anticipated in the original plan for the year.
Speaker Change: Okay cool refer to.
Speaker Change: What we said in the last call as well as.
Speaker Change: And to be at this grade for for.
Speaker Change: For Q1, we see ramping up during the course of the year and getting to 1516 by the AR and the latter part of the year. So it is great wise, it's evolving the way we expected we are a bit slower on the mining yes.
Speaker Change: Where that and that pushes things out a little bit so at the back end of the year, we may end up with not as much not getting the higher grade as quickly as we anticipated in the in the original plan for the year, but overall it should evolve that way.
Doug Reddy: But overall, it should evolve that way. And that goes to the tons per day being moved. I mean, in Q1, the average is 137,000 tons a day, but we had peaks at over 193,000 tons a day. As we came into April and May, the 165,000 tons a day is average. And so that's good. We're getting peaks where we're doing over 200,000 tons a day. So it's definitely picked up the pace as we came through the winter months, through the challenges that we had with loading units, a little bit of absenteeism, but we're good now and the team's doing really well.
Speaker Change: And that goes to the tons per day being moved in.
Speaker Change: In Q1, the average of 137000 tons a day, but we had peaks at 100 and over 193000 tons a day.
Speaker Change: As we came into April and May and over 165000 tons a day is.
Speaker Change: As average and so that's that's good.
Speaker Change: We're getting peaks, where we're doing over 200000 tons a day so.
Speaker Change: It's definitely picked up the pace as we came through the winter months through the challenges that we had with loading units a little bit of absenteeism, but we're good now and the team's doing really well.
Speaker Change: Yeah, I mean, I think I'd just add it Oh go ahead, sorry, but what's the what's the direction, but what's the actual grade that's been minds right now and they're directly feed grade.
Doug Reddy: What's the actual grade that's being mined right now, the direct or feed grade, rather than what was processed? Well, we get a lot of material that goes to the stockpile, so average grade being mined ranges from 0.6 to 1.2, anywhere in there. I'd say we're typically just under one gram, so we're using a bit of the stockpile and getting it to 1.1 on the feed. Sorry, Greg, you were going to say something. I was just going to say that kind of as mentioned earlier, the challenge we really had was around availability of the large shovels.
Speaker Change: That's correct.
Speaker Change: Our wealth, we get a lot of material that goes to the stockpile, So average grade being mined ranges from.
Speaker Change: Six to 1.2 anywhere in there I'd say, we're typically just under one gram. So we're using a bit of the stockpile and getting into one one on the feet.
Speaker Change: Hum.
Greg Smith: So Greg you were going to say something.
Speaker Change: I was just going to say that.
Speaker Change: Kind of as a as a mentioned earlier the challenge we really had was around availability of of the the large shovels and.
Greg Smith: And that really did cause us some issues in January and February. As that availability increases, we were able to see the tonnage increase substantially. But as Doug said, we are behind on the mining and the key for us is to start working on catching that up. This additional shovel will help with that. We were bang on pretty much our feed grade for Q1, our expected feed grade. And so, good from that perspective, but definitely need to catch up on the mining through the year. And we're seeing that start to happen now and keen to get that additional shovel into the fleet.
Speaker Change: That really did causes some issues in January and February as that availability increases we were able to see the tonnage increase substantially but as Doug said, we are behind on the mining and the key for US is to start working on catching that up this additional shovel will help with that we were bang on pretty much our feed grade for Q1.
Speaker Change: Expected feed grade and so you know.
Speaker Change: Good from that perspective by definitely need to catch up on the mining through the year and we're seeing that starting to happen now and keen to get that additional shovel into the fleet.
Doug Reddy: And I'm sorry, just could you tell me how many? Sorry, how many? I'm gonna try and say the word trucks, trucks. How many trucks did you have in the first quarter? Sorry, tired. Went from 25. We brought four more online. And this was always planned. And we got we're now at 29 trucks. Okay, so we went from 21 to 25 during the quarter. No, we have from 25 to 29 in the quarter. Okay. All right. Thank you.
Speaker Change: And sorry, just could you tell me how many alright, how many I'm not trying to take the word tracks how many trucks do you.
Speaker Change: First quarter Alright.
Speaker Change: Tired.
Speaker Change: Went from 25, we brought four more online and this was always planned and we got another 29 trucks.
Speaker Change: So we went from 21 to 25 during the quarter.
Speaker Change: No well from $25 29 in the quarter.
Speaker Change: Okay Alright. Thank you and then last question a little bit more bigger picture in that.
Anita Soni: And the last question a little bit more bigger picture and related to the deal. Can you just go through, Greg, can you go through what you view as core assets and non-core assets? There's been a lot of talk about asset sales post the merger and then, you know, focusing management time and resources on some of the bigger assets, but, you know, which, where would you see shedding assets if you were, if you were to do that?
Speaker Change: Related to the deal.
Speaker Change: Can you just go through Greg can you go through what you view as it sounds.
Speaker Change: Core assets and noncore assets and Theres been a lot of talk about that.
Speaker Change: Health.
Speaker Change: Post the merger and then you know focusing management time and resources on some of the bigger <unk>.
Speaker Change: But you know, which where would you see shedding assets. If you were if you were to do that.
Greg Smith: Sure. I think the easy comment to make is that, you know, Greenstone and Valentine form, you know, the foundation of the company. And, you know, both in Canada, both long life, both with a lot of exploration potential. So, you know, obviously, those are core. We have the development project down in California, Castle Mountain. We are making substantial progress under the new administration in terms of permitting. And so that is becoming much more, I think, relevant to the future growth plans of the company in the near term here. So Castle Mountain, that's another 200,000 ounces per year long life mine in the Americas, in the United States, clearly a core asset for us.
Speaker Change: Sure I think the easy <unk>.
Speaker Change: Comment to make is that greenstone and Valentine form.
Speaker Change: A foundation of the company.
Speaker Change: And both.
Speaker Change: Both in Canada, both long life.
Speaker Change: With a lot of exploration potential so.
Speaker Change: Obviously those are core we have the development project down in California Castle Mountain.
Speaker Change: We are making.
Speaker Change: Substantial progress under the new administration in terms of permitting.
Speaker Change: So that is becoming.
Speaker Change: Much more I think relevant to the future growth plans of the company in the near term here. So Castle mountain. That's another 200000 ounces per year long life mine in the Americas in the United States.
Speaker Change: Clearly a core asset for us.
Greg Smith: And then we've got a fairly large portfolio of other assets. We've got obviously operating scale in Brazil, we've got some operating scale in Nicaragua, and then, you know, Phelos, the Nevada assets, and Mesquite.
Speaker Change: And then we've got a fairly large portfolio of of of other assets. We've got obviously operating.
Speaker Change: Our scale in Brazil, we've got some operating scale in Nicaragua.
Speaker Change: And then <unk>.
Speaker Change: The Nevada assets.
Greg Smith: So, you know, Anita, I never want to isolate individual assets as being core or non-core at this stage. We're going to close this transaction. The management team will, you know, do a full review. It's a pretty good market for thinking about divestments of assets or some M&A around gold assets. So, it's definitely top of mind for us. It is something that we're going to focus on.
Speaker Change: Mesquite.
Speaker Change: You don't need I never want to isolate individual.
Speaker Change: Assets as being core noncore at this stage, we're going to close this transaction and the management team will.
Speaker Change: Do a full review.
Speaker Change: It's a pretty good market for thinking about.
Speaker Change: Divestments of assets or some M&A around gold asset so it's definitely top of mind for us.
Speaker Change: It is something that we're going to we're going to focus on but big picture easy comment is Valentine Castle and Green So of course as as the major core of the company and then and then focusing on the the other assets here over the next year and then determining what we're going to do it.
Greg Smith: But, you know, big picture, easy comment is Valentine, Castle, and Greenstone, of course, as the, you know, the major core of the assets here over the next year, and then determining what we're going to do. It's obviously there are some, you know, just the scale of the company, there are some that are going to be non-core. And we've had a fairly robust amount of interest in in various assets in the portfolio. And again, we'll kind of consolidate All of that and as we close the transaction and then go from there.
Speaker Change: Obviously, there are some just the scale of the company. There are some that are going to be noncore and we've had a fairly robust amount of interest in.
Speaker Change: And various assets in the portfolio and again, we'll kind of consolidate.
Speaker Change: All of that and as we close the transaction and then go from there.
Anita Soni: Thank you. I'll leave it there. Thank you very much. Thank you.
Speaker Change: Okay. Thank you I'll leave it there thank you very much.
Speaker Change: Great.
Jeremy Hoy: And your next question comes from Jeremy Hoy with Canaccord Genuity. Please go ahead. Hi everyone, thanks for taking my questions. I'm picking up some of the details here and going back to Greenstone. Recovery was relatively in line with where it was a Q4. You've seen spikes up to 90% range at a high level.
Speaker Change: And your next question comes from Jeremy <unk> with Canaccord Genuity. Please go ahead.
Jeremy: Hi, everyone. Thanks for taking my questions.
Jeremy: Picking up some of the details here and going back to greenstone.
Jeremy: Great Great recovery was relatively in line with where it was at Q4.
Jeremy: Spikes up to 90% range at a high level can you just walk us through the ins and outs of what it takes to get grades up to design.
Greg Smith: Can you just walk us through the ins and outs of what it takes to get grade up to design? recovery on Tuesday. Yeah, sorry. Yeah, go ahead. Yeah, I mean, higher grade, higher recovery. So, you know, with the lower grade coming in this quarter, we didn't know it would be lower, we knew we'd be doing plant modifications to rectify some short circuiting and solutions. So the solutions are, that's prike solutions. So we're losing solutions to tails in a couple areas due to a short circuiting the tanks and a valve design that was not working properly.
Jeremy: Yeah.
Speaker Change: Recovery of chartering, yes, sorry.
Speaker Change: Correct, Yeah, I mean, a higher grade higher recoveries. So we over the lower grade coming in this quarter. We didn't know it would be lower we knew we'd be doing plant modifications to rectify some.
Speaker Change: Some short circuiting our solution so the solutions are.
Speaker Change: <unk> solutions, so we're losing.
Speaker Change: Solution to <unk>.
Speaker Change: And a couple of areas to a.
Speaker Change: Short circuiting the tanks and they are a valve design that was all working properly. So we've made those modifications. So we anticipate as we go forward.
Greg Smith: So we've made those modifications. So we anticipate as we go forward, that we will see an improvement in grades overall. Unknown Speaker Recoveries overall. Okay, sorry. Got that. Recovery. All right, that must be my influence.
Speaker Change: We will see an improvement in grades overall.
Speaker Change: Recoveries overall, okay, alright got that.
Speaker Change: You did [laughter] recovery.
Steve: Steve My influence.
Jeremy Hoy: Okay, just one more for me on Los Filos. In the disclosure, you mentioned that you started layoffs.
Speaker Change: Okay, just one more from me on most of the loss in the disclosure you mentioned you started layoffs.
Greg Smith: If the community were to come back and sign an agreement today, how long would it take to restart that operation? Well, I think the question would be whether whether it makes sense to start the operation right away. I mean, the path to to you know, prosperity at most fields really is through the construction of a new CIL plant 10,000 ton per day CIL plant. And, you know, to do that, we need to continue with some engineering, we need to get some permitting done on site, and obviously advanced toward construction decision, then build it to go back into production on heap leach only basis immediately after having Interviewview with Jonathan Cain Interview with Jonathan Cain Yeah, that's really helpful.
Speaker Change: The community were to come back and signing agreements today, how long would it take to restart that operation.
Speaker Change: Well I think the question would be whether whether it makes sense to start the operation right away I mean, the path to two.
Speaker Change: Prosperity Atmos fuels really is through the construction of a new CIL plant 10000 ton per day CIL plant.
Speaker Change: And to do that we need to.
Speaker Change: Hi.
Speaker Change: Continue with some engineering, we need to get some permitting done on site and obviously advanced toward a construction decision then build it to go back into production.
Speaker Change: On heap Leach only basis immediately after having.
Speaker Change: You know, while the operation down.
Speaker Change: Economically might not make the most sense now.
Speaker Change: We're saying never we'd have to assess in the context of those.
Speaker Change: Those discussions and determine what the best path is but I think at this stage again, we're not in a position where we see.
Speaker Change: A resolution in the near term and so our current our current expectation is that fuels would remain suspended for.
Speaker Change: The remainder of this year certainly.
Speaker Change: And you know, we'll assess it as we go.
Speaker Change: Okay. That's really helpful. Greg. Thank you I'll step back in the queue.
Jeremy Hoy: Great. Thank you.
Unknown Executive: I'll step back in the queue. Lots of questions online. I'm trying to combine them. Lots of questions about costs at the mines.
Speaker Change: Thanks.
Speaker Change: Lots of questions online and trying to combine them.
Speaker Change: Last question is about cost at the mines. How did these Q1 results compare to what you had that you gave for the year.
Peter Hardy: How did these Q1 results compare to what you had budgeted for the year and what's your target ASIC for the year end? So other than Greenstone, our costs on a per annum basis, they are a little higher than budget. But overall, you know, as we've been saying, we believe we're still very much on plan for the year. For the rest of the mines actually performed within what what we expect. Q1 is very typically for the company, the lightest production quarter every year. And as Greg mentioned, this is a it's a record for us for Q1.
Speaker Change: <unk> year end.
Speaker Change: So other than greenstone were cost on a per ounce basis. They are a little higher than budget, but overall you know as we've been saying.
Speaker Change: We believe we are still very much on plan for the year.
Speaker Change: For the rest of the mine has actually performed within what we expected Q1 is very typically for the company.
Speaker Change: The lightest production quarter every year and as Greg mentioned this is a it's a record for us for Q1.
Peter Hardy: So so we're happy with overall with where we're headed. And, you know, as as a company as a whole, believe we're on track with our overall cost. I mean, all. I guess part of the challenge we have at Equinox is typically Q1 is our lowest production quarter and we have increasing production quarter over quarter. As you increase your production, the denominator goes up and your average cost per ounce goes down and that results in your average for the year. So we typically have a higher cost quarter in Q1 and then see those costs per ounce come down over the course of the year as production increases.
Speaker Change: So so we're happy with overall with where we're headed and you know as a company as a whole.
Speaker Change: We believe we are on track with our overall cost guidance.
Speaker Change: Yeah.
Speaker Change: I guess part of the challenge we have in Equinox is typically Q1 is our lowest production quarter and we have increasing production quarter over quarter. As you increase your production. The denominator goes up and your average cost per ounce goes down and that results in your average for the year. So we typically have a higher cost quarter in Q1, and then see those costs.
Speaker Change: Per ounce come down over the course of the year as production increases. This is this is this happens at equinox pretty much every year, it's based on seasonality.
Peter Hardy: This happens at Equinox pretty much every year. It's based on seasonality typically and it's the same this year.
Speaker Change: Typically and it's the same this year.
Speaker Change: Thank you.
Peter Hardy: We've had some questions about the finance costs and other non-recurring costs that occurred during the quarter, and how we have record production and record gold prices, but still booked in that loss. So can you explain that from an accounting perspective? Yeah, so I'll refer to it. So there's two major contributors there, or three. There's the low fee, low suspension, which creates noise in the income statement, as there's a lot of non-normal costs associated with suspending operations, principally severance for employees that are being laid off. We did have the accounting adjustments that I mentioned, non-cash, and those won't recur.
Speaker Change: We have some questions about the finance costs and other nonrecurring costs that occurred during the quarter.
Speaker Change: And however, we have record production record gold prices they fell back to a net loss. So can you explain that from an accounting perspective, yeah. So I'll refer to it. So theres two major contributors. There are three there are the lowest philo suspension, which creates noise in the income statement.
Speaker Change: As Theres a lot of non normal costs associated with sustaining operations principally severance for employees that are being laid off.
Speaker Change: We did have the accounting adjustments that I mentioned.
Speaker Change: Noncash.
Speaker Change: And those won't recur.
Peter Hardy: And finally, with the very fortunate completion of Greenstone commercial production last quarter, We had the opportunity, I suppose you could describe it, to capitalize costs related to Greenstone construction and pre-commercial production, but with completion of that, those charges, even when they were being incurred on a cash basis, they weren't going through our earnings statement, but now do. So those are the three primary components of the loss for the year. And then reflecting Greg's comments just now, as we see our production increase throughout the year, we'll see the earnings increasing throughout the year. And then again, as we de-lever and reduce the obligation side of the balance sheet, of course the finance charges with respect to those charges decrease and you wind up with this virtual cycle of having more cash available to deploy to pay down obligations while also reducing the cost of those obligations overall on your earnings.
Speaker Change: And finally with the.
Speaker Change: We're very fortunate.
Speaker Change: Completion of greenstone commercial production last quarter.
Speaker Change: We had the opportunity I suppose you could describe it to capitalized costs related to greenstone construction and pre commercial production, but with completion of that those charges, even when they were being incurred on a cash basis, they werent going through our earnings statement.
Speaker Change: But now do so those are the three primary components of the loss for the year.
Speaker Change: And then reflecting greg's comments, just now as we see.
Speaker Change: Our production increased throughout the year, we will see the earnings increasing throughout the year and then again as we de lever and reduce the obligation of the size of the balance sheet of course, the finance charges with respect to those charges decreasing you wind up with this virtual cycle of of having more.
Speaker Change: Cash available to deploy to pay down obligations, while also reducing the cost of those obligations overall on your earnings.
Peter Hardy: Okay, perfect.
Speaker Change: Okay, perfect and it looks like Jeremy did not come back into the queue and we did have a lot of questions coming online I think in most of them were interest during the college or in the Q&A. If I missed your questions. My apologies I will get back to you by email today or you're welcome to give me a call.
Rhylin Bailie: It looks like Jeremy did not come back into the queue. We did have a lot of questions come in online. I think most of them were addressed during the call or during the q&a.
Rhylin Bailie: If I missed your questions, my apologies. I'll get back to you by email today or you're welcome to give me a call.
Greg Smith: Greg, did you have any wrap up statements? I know I just again appreciate everyone for joining the call today appreciate your support and You know where to find us, all of our contact information is on the website, you can reach out to Rhylin or me anytime.
Speaker Change: Do you have any wrap that statement.
Speaker Change: No I just again appreciate everyone for joining the call today appreciate your support and.
Speaker Change: You know where to find us all of our contact information is on the website you can reach out to <unk> or me anytime. Thank you operator, you can now conclude the call.
Operator: Perfect. Thank you.
Operator: Operator, you can now conclude the call. This brings to a close today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.
This brings to a close today's conference call. You may disconnect. Your lines. Thank you for participating and have a pleasant day.
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Speaker Change: Yeah.
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Speaker Change: Yeah.
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