Equinox Gold Corp. Common Shares

Good morning, everyone, and thanks for attending this presentation today on Equinox Gold. As Ellen mentioned, my name is Greg Smith. I'm the president of the company. And Equinox is a – I keep saying it's a new company. We've been building it for the last three years. In the last year, we've gone from having zero production to having over 200 employees. thousand ounces of production in 2019. So we've come a long way very quickly and we've done that primarily through M&A. I will be making some forward-looking statements. You can find this detail on our website. So As I mentioned a year ago, we had no production. We were developing our Arizona gold mine in Brazil and advancing our Castle Mountain gold project in California. We also had a collection of copper assets and some smaller gold assets. Over the last year, we've refined the portfolio, spun out the copper, sold some of the gold assets, and brought the Arizona mine into production. We've got about 5.5 million ounces in reserves. another 3.3 million ounces in M&I resources, and another 3.4 million ounces in inferred resource. So very meaningful gold endowment. Our number one shareholder and our chairman is Ross Beattie, and our CEO is Christian Malau. So we just finished our third quarter. This is pretty exciting for us. It was the first quarter in the company's history. where we had two of our mines in full commercial production, that being the Arizona gold mine in Brazil and the Mesquite mine in California. Produced over 62,000 ounces of gold, all in sustaining costs of just over $950, $38 million in cash flow from operations, income, and also free cash flow. So again, a long way from no production a year ago to production, cash flow, and income today. Earnings. Earnings, exactly, earnings. So, Arizona, this is a gold mine that we acquired in early 2017. Previous producer that had been shut down, we re-engineered it, did a whole bunch of drilling, put about $160 million into a brand new plant and infrastructure. So it's an 8,000 ton per day open pit mine. Northeast Brazil, you can fly down to Belém in about six hours from Fort Lauderdale, get into a car, drive on a paved road for about seven hours, you'd be at this project. Power to site, good supportive community, most of them work for the mine, great place to be mining, low tax jurisdiction. Again, Q3 was our very first quarter of commercial production. We had originally intended to start producing at Arizona, first gold pour at the end of last year. We were delayed a little bit and started commissioning the mine in April and May. We had first gold pour then, commissioned over June, and then declared commercial production July 1st. Since that time, it's been a very good ramp up at Arizona. We've been exceeding our 8,000 ton per day capacity. The mining's going well, the processing's going well. and we produced almost 30,000 ounces of gold in our first quarter of commercial production. On a regular year, an average year, Arizona would produce about 130,000 to 140,000 ounces of gold. This year, we expect to hit the low end of our guidance of 75,000 ounces. This is a large land package in Arizona, over 1,400 square kilometers. We've got a lot of greenfields targets, brownfields targets in the area. The pink is our main mining license, and that's where the main Piaba open pit is. We've also got targets at Toro and Atlas. All of these targets will be followed up over the next several years. Bottom line is there's district-scale potential at Arizona, very prospective area. And I'm going to zoom in here, because this is the near-term value. We've got the Piaba open pit mine. That's where the million ounce reserve is today. That's where we're mining today. But you can see the Tadajuba target along strike there. Tadajuba is where we intend on doubling the current six and a half, seven year mine life that we have in the Piaba open pit. Very similar structure, higher grades we're seeing in Tadajuba. We have done some initial exploration a few years ago, suspended exploration while we built the mine. and now have redeployed two drills to Tata Juba and started exploring that trend in September. So we should start having results coming out by the end of this year, early next year. We've also spent the last couple years buying the land along that trend, and so eventually we'll be rolling Tata Juba into our resource and reserve statement and bringing that area into the mine plan. To the east of the Piaba Open Pit, you can see on the very far end of the slide there, you eventually hit the ocean, but between the pit and the ocean, there are a number of high-grade surface targets. These would not be the same type of open pit, long continuous structures that we see in Piaba and Tadajuba, but they could add meaningfully to the mine life in terms of having high grade, very soft saprolite mini pits coming out to the east of Piaba. We've had some of our highest grade intercepts right from surface in Makote and in Jenipapo. So again, very perspective, a long trend from Piaba. And then in north of the Piaba open pit, we have the Piaba north trend. That's an area where Artisanal mining has uncovered several kilometers of a gold trend along surface. It's in our mining license. We've never drilled it, but eventually it's another area we'll target for exploration at Arizona. Zooming in further here, We are starting the process of evaluating an underground mine at Arizona as well. So the Piaba open pit, the structure that we're mining, very continuous, steeply dipping structure, very broad zones, and very competent rock. And so basically lends itself very well to bulk underground mining. We have done an internal study on an underground mine at Arizona. It looks like it would be around 3,000 tons per day, around 3 grams per ton. It looks very economic, and what we want to do is advance that to something like a PEA that we could issue next year. So that's another focus that we'll have at Arizona over the next 12 months. Brings me to Mesquite. So Mesquite is a mine that we acquired just about a year ago. So this is our first year of operating Mesquite. This is a large open pit mine in Southern California, previously owned by Newgold. We paid 150 million in cash for Mesquite that we closed at the end of October last year. So our year-to-date results at Mesquite, we've produced 85,000 ounces of gold, all in sustaining costs about $950 per ounce. The plan at Mesquite, when we bought Mesquite, had about a three-year mine life in the reserve. And so what we're focused on now is trying to expand or extend the mine life at Mesquite. And we're doing that in a number of ways. We're permitting for additional leach pad space, and you can see the leach pads at the bottom of the screen there. We have an area to both the left and the right of the existing pads to expand them. We're also doing some in-pit drilling and drilling peripheral to the pit and evaluating the pushback of the brownie into the brownie deposit that you see there on the top of the screen. We've also applied for drill permits on the other side of the highway at the Rainbow Pit, and hopefully we can start drilling in that area next year. Finally, what we've done in the last 12 months is drilled out a whole bunch of the historic dumps that were mined previously when the cutoff grades were much higher and the gold price was lower. A lot of that is economic ore, and we've actually started stacking some of that onto the leach pad. So we're finding more material that we can mine at Mesquite, and hopefully we can roll that into a revised technical report next year. I'm going to move fast here because time is moving fast. So Castle Mountain, this is a mine we acquired at the end of 2017, past producer also in Southern California. This is a large oxide gold deposit, would be an open pit mine. Last year, we issued a pre-feasibility study that outlined a 16-year mine life, 3.6 million ounce reserve at $763 all in sustaining costs. So this is a very attractive large project. ultimately can do over 200,000 ounces of gold production per year. And you can see on the map, it's only about 200 miles north of Mesquite. So we're able to mine or to manage these two mines with the same management team, same back office, accounting, purchasing, payroll, technical. We're also going to be processing loaded carbon from Castle Mountain down at Mesquite initially, and we're able to tax consolidate these two projects as well in California. So Castle Mountain, this is a two-phase project. Phase one will be a 45,000 ounce per year mine. We already have the permits for phase one. Phase two, we're going to be expanding the existing project to 200,000 ounces of gold per year, and that would be the bulk of the 16-year mine life. So phase one for the first three years while we permit the expansion, and then phase two for the remaining. Important to note that we could mine phase one for as many as eight to 10 years, Ideally, we want to get Phase 2 into production as quickly as possible. We recently announced that we've started construction of Phase 1. This is about a $58 million build. About $8 million of that is working capital and contingency. So it's a pretty simple project, run and mine open pit heap leach with contract mining. You can see the leach pad liner there in the top picture. By the end of this month, we'll actually have liner on the ground. We'll have infrastructure going up, and we expect to pour first gold in Q3 next year, hopefully very early in Q3. Now we've got the two mines in production, a third under construction. We're focusing a little more on our ESG reporting. We'll be implementing the SASB, Sustainability Accounting Standards Board, reporting in 2020. Our first sustainability report will come out early next year. This is a focus for Equinox. We're looking at getting a nice ESG rating going forward. In the last year, we've accomplished a number of things corporately, including bringing in Mubadala, which is the sovereign wealth fund of Abu Dhabi, as a cornerstone financial partner. They invested $130 million in convertible notes in April. We've also recently listed on the NYSE American Stock Exchange in the United States. We're working on graduating in Canada from the TSX Venture Exchange to the TSX Main Board. We'd hope to finish that this year as well. And we've also substantially increased our liquidity over the last three years. $300,000 Canadian per day in 2017, now increased to over 3.5 million Canadian per day in 2019. And that is a bit of an opportunity here at Equinox. While all the PNAV multiples for all the producers have moved up, we're still trailing the producers on a PNAV multiple. I think there's a lot of reasons for that. One is we're a little under-owned institutionally. We also... have gone from, again, no production to a fair bit of production very quickly, but also because we're not on a single index fund. And part of that has been market cap, part of that has been liquidity over the last number of years. But as of today, we're going to qualify for a whole bunch of these funds next year. That could generate as much as 10 to 20 million shares of buying between March and September next year. Hopefully, we can start to move up this PNAV value curve as we get added to those index funds and as we bring Castle Mountain Mine into production. So I've listed a number of the things we've accomplished this year coming forward. We hope to see that graduation to the TSX main board. We are going to see the index inclusion starting to happen next year. Exploration results at Tata Juba, and hopefully we can roll that into a resource update. and, of course, updates on the Castle Mountain construction as we bring that mine into production mid-next year. We are always looking for new opportunities to grow Equinox. We do have a vision here of becoming a million-ounce producer by 2023. That is something that is well-supported by our chairman, Ross Beattie, and a lot of our large shareholders, including Mubadala, and so that is also a focus for the company going forward. With that, I've got the note to please wrap up here, so I'll conclude and thank everyone for attending the presentation today.

Thank you very much, Greg. Do we have questions for Greg? OK, I have one. I always have a few. I have to pick the best one. But what makes you think that you will be part of some indices in the short term?

Just the data. So the biggest issue that we've had in being included in the index has been liquidity. And it's something that we focused on through marketing and also just been helped by kind of the uptick in the market over the last number of months. So now that we're hitting the over a million dollars Canadian of turnover every day, that qualifies us, for example, to be on the GDXJ. So I can never guarantee it because you never know, but we do meet all the criteria to be included in those indexes. Okay.

And 12 seconds, back to the convertible note that you have. Are there concerns in the market with that 6% rate?

So the convertible note we have is with Mubadala. They are long-term supportive shareholders. The interest rate is 5%, which was a substantial decrease from what we were paying at the time to another lender. The conversion rate, when we negotiated it, was at a pretty substantial premium. Today, that rate would be $5.25 per share U.S. post-consolidation that we did in August. So, no, there's no concern. I think it's fantastic for the company to have them involved.

Thank you very much. Okay, thank you.