Equinox Gold Corp. Common Shares

Thank you for standing by. This is the conference operator. Welcome to the Equinox Gold second 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 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then 0. I would now like to turn the conference over to Ryan King, Executive Vice President, Capital Markets for Equinox Gold. Please go ahead.

Thank you, Operator. Well, good morning, everyone, and thank you for taking the time to join the call this morning. Before we commence, I'd like to direct everyone to the forward-looking statement on slide two. Our remarks and answers to your questions today may contain forward-looking information about the company's future performance, Although management believes that our forward-looking statements are based on fair and reasonable assumptions, actual results may turn out to be different from these forward-looking statements. For a complete discussion of the risks, uncertainties, and factors which may lead to actual operating and financial results being different from the estimates contained in our forward-looking statements, please refer to our second quarter and year-to-date MD&A and consolidated financial statements available on our website as well as on CDAR+. And finally, all figures are in U.S. dollars unless otherwise stated. Present today with me on the call are Darren Hall, Chief Executive Officer, Peter Harvey, Chief Financial Officer, and David Schumer, Chief Operating Officer. We will be providing comments on our second quarter 2025 production and cost results and an update on the Greenstone and the Valentine gold mines, after which we'll take questions. The slide deck we will be referencing is available on our website at EquinoxGold.com under the Shareholder Events section. You can also click on the webcast to join the live presentation. And with that, I will turn the call over to Darren.

Turning to slide three, and thanks, Ryan. Good morning, everyone, and I appreciate you taking the time to join us on the call today. Firstly, I would like to acknowledge the efforts of our employees and business partners for their continued focus during the quarter to responsibly deliver over 219,000 ounces during what can be a distracting time as you integrate two businesses together. So well done and thanks to everyone. With the completion of the merger, we've created a significant Americas-focused gold producer anchored by two cornerstone Canadian mines, Greenstone and Valentine. It is definitely exciting times as we build one Equinox with the leadership team and the entire organisation focused on delivering on its commitments, operational excellence, advancing high quality organic growth, rationalising the portfolio and importantly disciplined capital allocation. The benefits of bringing the teams together are already paying dividends, one example of which is reflected in improvements at Greenstone which we'll talk to later. The company has entered into a pivotal phase with production, cash flow and earnings expected to grow meaningfully in the coming quarters. Turning to slide four, Q2 financial results predominantly reflect Equinox's pre-merger assets. On a tributal basis, the company sold just over 148,000 ounces at an average realised price of $3,200 an ounce. Interestingly, had the calibre transaction been effective January 1, the pro forma consolidated revenue for H1 would have been approximately $1.33 billion from 401,000 ounces. which clearly underscores the enhanced scale and earnings power of the new company. Looking forward, Q3 and Q4 will see increasing production as we benefit from a full quarter of contribution from the calibre assets, continued improved performance at Greenstone and first gold from Ballantyne. Turning to slide five, Greenstone is a key focus. The ramp-up is progressing and we are seeing tangible improvements. Q2 delivered solid results where mining rates increased 23% and processing rates improved 20% over Q1. Building on that momentum, Q3 is off to a strong start, with Q2 mining rates 10% higher than Q2, with month-to-date August mining rates averaging 200,000 tonnes per day. Over the 30 days ending August 10th, We processed an average of 24,500 tonnes per day, with more than one third of the days above the nameplate capacity of 27,000 tonnes per day. There is still work to do as we focus on minimising dilution and mining losses around historical workings concurrently with targeted programs to improve fleet productivity and operating discipline. I'm pleased to introduce Dave Schumer as Equinox's Chief Operating Officer. who brings over 35 years of mining experience to the business. Dave and I worked together at Umont, and most recently Calibre, and he has been working closely with the Greenstone team since mid-May to accelerate the ramp-up, improve efficiencies, to safely deliver reliable performance. With that, I'll ask Dave to discuss a little more, Calibre, on some of the team's recent progress at Greenstone.

Thanks, Darren. We've moved quickly to put more horsepower behind Greenstone's ramp up. This includes bringing in seasoned advisors with decades of load and haul experience, improving shovel loading cycle times through operator training, the addition of auxiliary equipment to maintain pit floors and shovel dig faces, and the introduction of double-sided loading to essentially eliminate haul truck spotting time. We've also recently taken steps to bring in technical specialists to optimize and monitor our blast designs and performance, targeting improved fragmentation, reduced dilution, and improved ore presentation to the mill. On the haulage side of things, improved road designs and construction, tighter dump exchanges, and recently added support equipment are all helping us move material much more efficiently through increased average speed across the haulage fleet. These enhancements, along with a concerted effort to reduce operating delays, specifically through the implementation of an efficient hot change between shifts, are already contributing significantly to stronger daily performance. As Darren mentioned, month-to-day August mining rates have been around 200,000 tons per day, with best demonstrated performance today of 227,000 tons per day. And the focus remains on driving dilution down and fine-tuning the process plant to steadily improve operating time, throughput, and recovery. Turning to slide six, and back to you, Darren.

Thanks, Dave. Valentine is a conventional crush-grind CIL plant, and will be our second Canadian cornerstone mine and a significant contributor to cash flow. Before providing the Valentine update, it's important to note there are currently active wildfires in Newfoundland and Labrador with a number of communities on evacuation alert. Our thoughts and best wishes go out to those impacted and our operations have not been impacted but remain vigilant and supporting those that have been. In Q2 2024 we assembled an operating team with significant commissioning experience led by Jason Sear who's been working symbiotically with Kyle Kuntz and Pierre Lagarde who are leading the construction front over the last year. This investment in talent is paying off as evidenced by our current state of operational readiness which includes The process plant is fully energised, key circuits have been tested and commissioning crews are working through performance verification. Maintenance systems are live, operating procedures have been developed and crews have trained. We have invested over $25 million in critical spares to support a smooth ramp up. First order to the plant is scheduled to commence before the end of August, with first gold anticipated approximately a month later, followed by a steady ramp up to nameplate capacity in Q1 2026. Turning to slide 7. With Greenstone ramping towards nameplate capacity and Valentine on track to deliver first gold, we are entering a period where production and cash flow will materially increase. These two cornerstone Canadian assets, combined with our diversified portfolio, give us the scale, stability and leverage to gold price required to drive a step change in margins, earnings and therein shareholder value. Our strategy is clear. Quality over quantity. Focus on production that moves the needle in terms of free cash flow and valuation. Advance high return organic growth. Invest where we create the most value per dollar spent. Rationalise and streamline. Continuously assess the portfolio to focus our human and financial capital on our best opportunities, a recent example of which is the sale of our Nevada assets for $115 million. Deliver tangible returns. Share price appreciation through margin expansion, discipline cost control and production growth while positioning the company to return capital directly to shareholders through dividends and or share buybacks once our delivery objectives are achieved. We're focused on executing with discipline, and I'm confident in our ability to realize our vision to be a top quartile valued gold producer. With that, we're happy to take questions. And back to you, operator.

Once again, to join the question queue, you may press star then 1 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. Our first question comes from Ovaeus Habib with Scotiabank. Please go ahead.

Thanks, Operator. Hi, Darren and Equinox team. Congrats on a 2-2 beat and really great to see Greenstone Mill hitting the, you know, overnight capacity. Darren, a couple of questions from me just starting off with Greenstone. The grade at Greenstone came in at around 0.92, down from around 1.06 in Q1. When should we start seeing grades improve going into the second half, you know, and what measures are you taking to manage and improve grade solution? Eventually, what I'm asking is, are you expecting grade to improve in quarter over quarter, kind of going into Q3, or is this more of a Q4 situation?

Yeah, no, thanks, Vice. Appreciate your support and questions. You know, grade, we are seeing improvements in grade. You know, month-to-date August grades are right around a gram a tonne, so improving over what was Q2. We will continue to see improved grades because of face position, and face position driven by, you know, kind of where we sit in the pit. But obviously, the more material we move, it means the more face positions we make, which means the deeper we get, the more material we have. The more material we move, it allows us to be able to operate more effectively along that rate tonnage curve. But importantly, in everything we're doing right now, it's about ensuring we get the quality as well as the quantity. So, you know, Simon and Dave and the team are absolutely focused on moving as many tons as we can, but importantly, minimizing dilution. So to be able to segregate out the waste from the ore and then secondly is also to minimise the ore losses in around the historical working. So it is a work in progress and as we go forward I anticipate that we'll see quarter on quarter improvements in grade. But I would anticipate that Q3 grades probably won't be too dissimilar to Q2. Maybe marginally better but we are also ensuring that we make face positions so that additional capacity that we've got is ensuring that we end up with nice areas to work in that provide really, really effective mining areas that will positively impact the unit mining costs as well, which will then flow through to, you know, margin escalation as well.

Got it. And thanks for the colour on that. And just in terms of the fleet that you have in place, you know, in terms of improving the mining rates as well. Do you have all the equipment and money in place or do you think you need to be cut up?

No, I think for what we've socialized vis-a-vis the feasibility study or more recently is that all the equipment that we require is in place. It's really about maximizing the value of our committed capital and what we've delivered into and that's working with our business partners and our vendors as well. to ensure that they have skin in the game and are focused on our performance as well. And we have seen over the last quarter a significantly higher level of engagement from both Komatsu, Caterpillar and SMS as well. So that's great to see. So the short answer is that we have the equipment. The board have afforded us some additional support equipment, which is positively impacting things as well as Dave indicated by increased haul speeds for the truck fleet. So no, we have what we need and it's really about ensuring that we maximize the value out of that invested capital.

Got it. Thanks for that, Darren. And just moving on to Los Felos, obviously you've kind of had the agreements in place now with the two communities. Are you, now I'm forgetting the name of the third community, I apologize, but in terms of, are you in discussion with that third community as well right now, or are you dealing with just the two communities that basically have signed on to move forward with Los Rios?

Well, in every jurisdiction that we operate in, we maintain regular and engaged communication and coordination with all of our stakeholders, and that's whether it be in Mexico, Nicaragua or Ontario. So we maintain open dialogue with everyone. The third community that we're having discussions with is Caracolillo, but what we have done is that we do have fully executed agreements in place with two of the three communities and we're currently working with those communities to recommence exploration activities and look at a two community plan to be able to exploit loss for your loss as well. But no, we are hopeful that we will work towards a solution but as we do everywhere, for those that want to work with us, we will work constructively and responsibly with every stakeholder.

Got it. And that's my last question over here, Darren. You know, I mean, great to see, you know, you've started, you know, selling off non-core assets. And we saw that with BAN. Are we going to see more of that going into the second half or early 2026? Any follow there would be appreciated.

We love all of our children, but again, if we find that some of our assets can create you and our other shareholders and us more value in the hands of someone else, then we will actively explore those opportunities. Are we running processes? No. But have we seen a level of engagement and inbounds as a consequence over the last quarter or two? Yeah, absolutely. And as we demonstrated with the Nevada assets, you know, we will move agilely to be able to surface those values as they present. But they will all be focused on ensuring that they positively impact share price. And that's where our focus is.

Perfect. Thanks for taking my questions, Aaron. And again, congrats on a C2 beat.

Thank you, Avesh. The next question is from Anita Soni with CIBC World Markets. Please go ahead.

Hi. Good morning, Darren. And firstly, congratulations, David, on your appointment. I think we crossed paths when you were at New Gold in 2014-2016. My first question, just to follow up on the grades at Greenstone, you did indicate that the grades increased quarter over quarter of what was mined. Can you give us an idea of what those actual numbers were in terms of what the grades that you mined out of the pit this quarter and last quarter? And then secondly, what would the block model have predicted just so that we can get a benchmark of the kinds of ore losses that you're experiencing right now?

Yeah, Anita, and thanks for the questions. And I don't have the mined information in front of me right now. And I guess there's two parts I think we want to focus in on here is that we will see an improving grade quarter on quarter as we get deeper in the pit and as we improve our practices in around mining dilution or minimizing mining dilution and oil losses. And secondly is that the volumes of material will also impact the grade that we see presented to the process plant. If we step back and look at the veracity of the feasibility study over the longer term. From memory I think it was around 300,000 ounces a year or thereabouts and that what we see is that from a high level we see the reconciliation of total metal being pretty consistent with that. We are seeing more tonnes at a lower grade and that's where our focus on dilution and And as we work through the balance of the year, I think we'll be in a better position to be able to talk about what those shorter-term grades look like. But I'm comfortable with the ability for the asset in the long term to deliver into the feasibility, which is not specifically answering your question. I just want to provide a little bit more colour in around what the long term looks like, because I don't have the actual mind-on-mind grades. Because as of end of month July, we had right around 6 million tonnes on stockpile. So, you know, there's a large stockpile of material as well and how that figures into the as mined versus the as milled. Yeah, I can appreciate that.

So I can appreciate that, but I think that grades were supposed to be in the order of about 1.3 this year. So that's where we're, you know, the 0.92 is where I'm trying to understand. And then secondly, you also, you mined 50% more than you milled. Did you... just direct ore feed what you mined? Or was there, like, I'm trying to understand, like, the movement between what's happening at the mine. Is there any stockpiling happening? And then, you know, like, and then you also, you guys also talked about the grades being, you know, the lower available, like, lower grade availability within the stockpile that you pulled going to the mill. So I'm trying to get an understanding of the material movement and what's happening there.

Yeah, and again, it's probably worthwhile just sitting down and walking through what that looks like. But absolutely, right, there's a stockpile and there's a surge capacity in front of the plant. I mean, I don't have the number at hand. Maybe Dave does. But I would anticipate that probably less than one-fifth of the material that is wrecked, dumped into the primary crusher. I think the majority of the material is actually re-handled from the stockpile. to be able to ensure that we get a consistent feed from not only grey but also arsenic and sulphur and we get a nice blend of product to get a nice stable feed into the plant that will have a positive impact on recovery. So the stockpile is a critical part of the process here because we don't go direct mine to mill.

And it's Peter here. Anita, we did see an increase of the stockpile from the NFQ1 to the NFQ2, but we can address some of those items perhaps in more detail offline.

Okay. Second question in the series of questions, and I'll leave it at three. But the second question, just in terms of the disclosures that you provided on both the tax and the legal front in the MD&A, one on taxation in Nicaragua and a dispute on the tax – rebate, and secondly, the Arizona legal matter. Can you give me some color on, you know, firstly on the tax, on the tax issue there? I mean, do you expect a resolution in the near term, or is that something that we should be concerned about? And secondly, on Arizona, a similar question, and, you know, would that impact your ability to execute on asset sales if you were thinking about asset sales in Brazil.

Yes, Peter here. On Nicaragua, without getting into too much of the detail because it is an ongoing discussion with the tax authority, tax law changed. We are quite confident that the Nicaragua operations are grandfathered under the pre-existing regime and we're actually reasonably confident we'll come to a beneficial resolution there. As to timeline on when that might be settled, I don't know. But we did not record a provision with regards to it, which indicates our expectation of likelihood of a successful resolution. And then with respect to Arizona, The legal wheels in Brazil turn very slowly, so we don't expect that to be resolved in the near term. We do not expect that to – there is no process on Arizona. I just want to reiterate that, or on any of the Brazil assets or any of the other assets for that matter. But we wouldn't expect that kind of thing to interfere. If there was one, we wouldn't expect it to interfere with the process.

As it didn't, we've given this recent review between Caliber and Equinox. Exactly, yeah.

Okay. And then last question, I guess I'll move to Los Felos. So Los Felos, you know, in the last two years, Peter, as you, you know, you guys had indicated previously, has been a bit undercapitalized. You know, you were preserving capital to get their ramp up at Greenstone up and running. So if Los Felos comes back outside of the CIL, what kind of, you know, capex should we be expecting in terms of a recapitalization of that money?

Yeah, Anita, I mean, we're working through what a potential restart may look like at Los Hilos, and as we have visibility into that, we'll be absolutely transparent with what those requirements are. But our focus right now is working with the two communities on developing a two-community plan which would involve the construction of a CIL. And that's starting with recommencing exploration activities here in the next... call it weeks and then continuing the studies in the background to be able to look at refreshing some of those longer term economics. So it's really about the longer term capital requirements and what that asset looks like as a world class gold asset. And if we're faced with the first world problem of being able to restart then we'll start to provide that information because those numbers change on a pretty regular basis. And depending on the commitments we make and the agreements we have in place with the communities, that will also impact what that capital start looks like. But we're comfortable that, you know, the provisions that we've made and the progress that we've made is preserving our ability to recommence when we do have those agreements in place.

All right. Thank you. That's it for my question. Sorry. Go ahead.

I was just going to say, Anita, it's Peter again. And given the longer history, perhaps, with Los Feliz than others in the room, no one will actually be happier than me to have to come forward with that information. So looking forward to the day when we do.

All right. Thank you. That's it for my questions.

The next question is from Mohamed Soudaib with National Bank Financial. Please go ahead.

Hi, Darren and Tima. Thanks for taking my questions. Just maybe on the cost front in the quarter, I just wanted to maybe dive in a little bit deeper into the Brazilian operations cost. It seems to have been doing better than guidance and better than what I was expecting there. Should we expect those similar unit costs to continue into the back half of the year, or how should we be thinking about cost out of the Brazilian operations? Thank you.

Well, maybe I'll start with a kind of a 30,000-foot view and then see if Pete's got anything to add to it. But, you know, I'm on June 13th I think or thereabouts. We re-established guidance for the full year and we're very comfortable with our consolidated and PEATS guidance for all of our assets going into it and I think with that we will see variation on a quarter by quarter and a month by month basis as we see different levels of spend and different reaction too. But again, holistically for the year we're very comfortable with the guidance. Pete, anything you'd like to add on that?

Just that, you know, Brazil, as those who are familiar with the company would know, is very seasonality-driven, and we tend to generate most of the production cash flow in the second half of the year, which has obviously an impact on the unit cost overall. But as Darren said, very solidly in range for delivering on our updated guidance.

Yeah, and I think that just a layer in is that, you know, Well, Anita maybe had raised it, but in terms of the capital constraints that we had seen over the last few years in terms of where we deploy capital, as our organisation changes and as we generate that capital, it's allowing us to look at that capital deployment throughout the assets. And I think that we'll see assets like Brazil be able to better perform as we can deploy more capital that will positively impact their ability to be able to see what's in front of them and then be able to more reliably produce as well. And whether that be results of exploration through the drill bit or whether it be investing in capital for equipment to be able to lower unit costs, all those things will positively impact their portfolio. So I think that with this pivotal change we're seeing with Greenstone coming on board, or sorry, ramping up and then you know, we're imminent with respect to Valentine, that very much changes the paradigm, which is Equinox will allow us to then be able to reinvest back into some of these assets that arguably probably haven't seen the love over the last couple of years. So, you know, again, very exciting times for our entire portfolio of assets.

Great. Thanks for that, Carl. And then if I could shift maybe to Greenstone, maybe just to follow up on a great question there, but maybe as it relates to the stockpile, You noted an increase in the stockpile that you have at the asset there for a quarter. Would it be possible to know which the 6 million tons, what grades the 6 million tons are at for the stockpile?

Thank you. Sorry, you broke up there right at the end. Do you mind just repeating that question?

Would you be able to tell us what are the grades for the stockpile, the 6 million tons of stockpile that you have at Greenstone?

In terms of splits, there's different grade splits. And from memory, Mohammed, I think we're looking at about 6 million tonnes at just over half a gram as a total. And I believe there's about a million and a half tonnes at about a 0.7x, right, in terms of the higher grade portion. So we'll call it the bin two. So, but we can get offline and provide more color than you would like. But, you know, again, we've got a significant stockpile that's very similar to what we have processed year to date and then a larger stockpile of lower grade materials. So we talk about a million and a half ton, you know, basically the average grade process year to date.

Right. And as your final question on Valentine, so in the MD&E you noted that you have about $54 million Canadian left stock. on your total capex there, how should we think about the capital spend of the asset as you wrap up, you know, specifically as it relates to development capex or initial capex or non-sustaining capex for that asset in the second half of the year? Thank you.

So the spend on the project itself that's in the MD&A takes us through to first gold part. And so when you're thinking of – and that's a fairly – you know, it's the tail end of the project. And that spend, you know, it becomes less lumpy than earlier in the project. So I suppose if you're trying to understand it, the easiest way to look at it is just a smooth spend through first gold. And then subsequently, it's your very typical working capital buildup and wrap-up and the costs that are typically associated with that. We haven't guided on Valentine costs as of yet, and we won't do that in all likelihood until commercial production. But, you know, you can make, I suppose, typical assumptions on up to a half million ton for your plant and mining operation.

Yeah, and I think that, you know, again, if I was sitting in your shoes, Mohamed, I mean, I'd be taking average mining costs and average processing costs and using them as the basis for. There is no surprise in terms of we deferred $100 million worth of spend and now it's going to come out in Q4 as opposed to capital. There's none of those shenanigans that have been played out. I mean, we've played a pretty straight bat at this at providing updates as we've gone through and the EAC estimates that we've foreshadowed, we're tight on, we're comfortable with. And as Pete mentioned, it's really going to be the operating ramp up, which are tied into basically capital demands from an operating cost perspective as opposed to capital injection per se from a monthly pay.

And I just add to that funded, fully funded.

Absolutely funded out of cash and cash flow from. And part of the reason that we didn't provide all in sustaining and cash cost guidance for the tail end of the year when we provided guidance just recently, is that the production I think we're pretty comfortable with an estimate of, but you get some really wide swings there in terms of unit costs and then it becomes distracted to the discussion. But we see nothing that's concerning there from a delivery in the back half of the year or being able to fund it. Our focus is on getting to close to name plate, by hopefully the end of Q1, but definitely in Q2. And again, we've afforded, the Board has afforded us significant investment there in terms of capital spares as we've talked about, the redundancy, the additional time that we've had through the build has allowed the operating team to come in and do that redundancy checks and we've got $25 million worth of additional spend, or a spend, associated with pumps and redundancies to ensure that when things do go bump in the middle of the night as we ramp up, we can just switch between and minimize those impacts.

Great.

Thanks a lot for answering my question. We're all factored into the project capital.

Amazing. Yeah. Thanks for answering my questions and congrats on the quarter. Appreciate it. Thank you very much for your support.

The next question is from Jeremy Hoy with Canaccord Genuity. Please go ahead.

Thanks for taking the question. Mainly on the topic of Valentine, did you let us know what the key metrics we should be watching are during the ramp-up process?

Yeah, it'll be tons more, Jeremy. And, you know, as soon as we commence production there, we'll provide, you know, regular updates on throughput. And I think that that's going to be the measure. This is a long life. asset and there'll be dips and weaves along the road with respect to grade. I mean we're comfortable with respect to grade as we've demonstrated through the releases we've provided and through recent production results. But no, I'm comfortable with it's really going to be about showing that steady state or that ramp up in throughput. That's going to be the key measure. Everything else is kind of a Inconsequential related to that. Mining rates are going to be fine. We've had good mining performance. We've got all the assets ready to turn on. We've actually had some delays in providing that as we've seen the project being delayed in terms of the bill. So we're very comfortable from a mining perspective. It's really going to be about mill throughput.

Thanks, Aaron. I appreciate it. One last one, and just thinking about the future, there's a lot of exploration potential at some of these assets, and I appreciate that there's focus on ramp-ups and operations at the moment, but are you able to give some sort of loose priority or ranking in terms of where you see the greatest exploration potential?

Yeah, no, thanks, Jeremy. And again, and even though there's a few things happening in the business, We haven't lost sight on the fact that our roots are very heavy in exploration. We continue to explore in Nicaragua. We've provided a bit of a summary there. We spent about $70 to $90 million this year. We provided, sorry, consolidated. We did provide a release here on July 25th in terms of some very encouraging results out of Nicaragua, which are arguably some of the best results ever returned from the property. We have had good success in around Valentine as well. We would anticipate maybe later this quarter providing an update on some recent exploration results out of Valentine. But I think as we chatted a little bit earlier, as we generate cash and we're coming out of the back of two significant builds and capital draws, it allows us to be able to refund reinitiate some work in some of the areas that have been maybe a little bit under loved from an exploration perspective. Los Felos is a good example with the two community plan going forward. Obviously maintaining focus in Nicaragua will be key. Valentine because the potential in both of those assets is significant. And then Mesquite as well. I mean Mesquite has been an enduring asset with a long life. And again, it's been pretty low on the food chain from a capital deployment perspective over the last few years. So we'd like to see, and we will see, exploration programs recommence there here within the next few months. So I like to think of this as an exploration company backed by three to four billion dollars of revenue. And, you know, again, as you know us as Pedigree, you know, I would anticipate that if I was modeling, sitting on your side and modeling this, I would anticipate that, you know, roughly $100 an ounce of exploration spend as kind of a, as an operating cost going forward as well. I mean, we see great talk across all of our assets to exploration success.

Great. Thanks, Darren. Appreciate the call. I'm looking forward to developments there. I'll step back and look in the queue.

Appreciate it. Thanks very much. Thanks for your support. And 10 o'clock.

The next question is from John Tumazes with John Tumazes Independent Research. Please go ahead.

Thank you for the good job that's going on. Looking to next year, assuming Los Filos idle as it is at the moment, what is a reasonable target for cash cost? 14 company-wide, $1,400, $1,300, $1,200, $1,100. How much better do you think things will get?

I know I'm sitting back here a little bit. I mean, I'll maybe pass it to Pete to start with, and then I'll pick up the other, and then I'll close out as I kind of collect my thoughts. Thanks for the question, though, John. He's sitting there thinking.

Well, you know, it's certainly become blessed with an embarrassment of riches. And, John, obviously for everyone on the call, anything we say today is not guidance for next year. So if you're just thinking about ballparking, an example is for Q2, if we're looking at things on a combined basis, we're at about a little under $1,400 per ounce cash cost. And that's with Greenstone not fully ramped up and Valentine not contributing. And so if you're trying to model it through, John, you know, you could probably knock $100 an ounce off of that, $150 an ounce. But I do want to emphasize, we'll have that guidance in the new year, as we normally do. But, you know, we're just starting to see the benefit of our larger, lower-cost producers coming online and I know that's where your question is getting to. And so we're looking forward to being able to provide that information more confidently next year. But if you're trying to look at it now, that's how I'd approach it.

Yeah, and I think that I kind of put Pete on the spot there, so sorry, Pete. But as you sit back and you look at the guidance we've provided this year, we've provided $1,400 to $1,500 an ounce. If you look at the profile as we move into 2026, as Pete foreshadowed, we're going to have valentine and greenstone being larger contributors on which will lower our production cost per ounce. So in the current gold take that we see, the ability for cash flow generation is going to be significant. When we're talking about $1,000 to $1,500 an ounce margin, we're going to be blessed in a very great situation to be able to one, deliver the balance sheet primarily first and then look at by this time next year we'll be having I'm sure lots of animated discussions in around how additionally to be able to return value to shareholders through dividend or share buybacks as well. But yeah, I think that we need to work through the balance of the year so we can create expectations that we can deliver into in 2026. But taking the guidance that existed for this year and even rolling that forward, that puts us in a very, very favourable position, John.

Thank you. If I could ask you to stick your necks out a little further, looking to 2027, is it a reasonable goal to be in, assuming the Castle Mountain capital doesn't start, Los Feliz mill doesn't start, is it a reasonable target to be in a net cash position at current gold prices by the end of 2027?

Yeah, I think that's reasonable.

Super. Thank you very much.

Thanks, John. Appreciate your support and continued support over the journey. It is much valued. Thank you. Thanks, John.

This concludes the question and answer session. I would like to turn the conference back over to Darren Hall for any closing remarks.

Yeah, no, I'd just like to thank everyone for joining the call today and taking the time. It is appreciated. Continued support is acknowledged, valued, and respected. And again, As always, myself and the entire team are available to field any questions after the call and any time during the quarter. So look forward to continued engagement, and if anyone has any questions, reach out. But other than that, have a wonderful day, and back to you, operator. This brings to a close today's conference call.

You may disconnect your lines. Thank you for participating.