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Equinox Gold Corp.
8/5/2021
Thank you for standing by. This is the conference operator. Welcome to the Equinox Gold second quarter 2021 financial results and corporate update conference call and webcast. 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 and 0. 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. I would now like to turn the conference over to Relynn Bailey, Vice President, Investor Relations for Equinox Gold. Please go ahead.
Thank you, Operator, and thank you, everybody, for joining us this morning. We will, of course, be making a number of forward-looking statements today, so please do take the time to visit our website, CDAR, and EDGAR to download our continuous disclosure documents. I will now turn the conference call over to Christian Milov, CEO, for opening remarks.
Thanks, Rulin, and welcome everyone to the quarter two results call. You know, we're pleased with the quarter, and as usual, there's been no shortage of news and activity. The company's just been so active in the first half of the year and really pleased to get to this point where, you know, we said this was a year of big investment. As we invested in our minds, we looked to get projects ready to build or continue building them to explore our assets and to keep investing money in to build the future of this company and we have a long-term vision that's in place here and things are basically ended this quarter as expected you know it was a quarter very similar to quarter one we produced about 125,000 ounces of gold and you know we had a good safety record for the quarter I'm pleased with that performance. COVID continues to moderate. Obviously the new Delta variant does seem to peak its head a little bit in various locations, although it's had minimal impact on the operations and really pleased with how the operations have adapted to the new environment with COVID there. We've probably hit that trough which we thought we would do around mid-year this year where we said the first couple of quarters will be a little tougher. We are coming out of the rainy season in northern Brazil as well and investment periods at Mesquite and Castle ramp up. Obviously, we've had a challenge with Los Felos over the last year as we've taken over ownership, but pleased to be coming through a period and getting towards hopefully a period of stability going forward here at Los Felos. We're turning to a very catalyst-rich period of the year in the second half of this year and excited to walk you through this presentation and indicate where we see the future opportunities and that long-term vision. In terms of the actual results, like I said, we sold just under 125,000 ounces for the year. Our all-in-sustaining costs were slightly down from previous quarters, and Pete will walk you through some detail on that in our slightly revised guidance. We did take a $28 per ounce right down on the Los Filos inventory with the shutdown there and the lower production. The cost of the actual ounces going up on the leach pad was fairly high for the quarter, so that does impact the overall all-in-sustaining costs, which we hope not to see much in the future. We turn over to the recent highlights on the next slide, number four. In terms of construction development and exploration, we continue along with St. Louis. Doug will walk you through that, but pleased to see it on budget and on time. We're getting to about half complete now. We're still on track for roughly building a mine per year over the last three years, and this year will be no different, so things tracking well there. We've advanced early works at Greenstone. We're getting ready for construction here in the near term. And the second half of this year, we'd like to be launching into full construction, but we have had a very productive summer. The team has done a great job of getting camps and tree clearing and all that work done. So Doug will walk you through a little more detail and a couple of photos on that. Lots of drilling ongoing, and I'll leave that to Doug to talk about, but really excited with the areas we have decided to invest in from an exploration perspective and expect to see some results from that in the second half of the year as well. In terms of the operations, I mean, the one key point I will stop on for a second here, obviously, the Los Filos blockades that we had last quarter were frustrating for us, I'm sure for shareholders as well. And, you know, we've come through that period. We have got those resolved and obviously a lot shorter period than the original one last year. The union had go back to work and I think there was a real frustration level with not being paid and for a period that they had walked out on in a legal blockade there, and they've gone back to work. There was pressure from communities and certain union leaders to get back to work and start earning a wage again, so pleased to see them back on the job. Really, kudos to Greg and the team. They've got things ramped back up fairly quickly there, and we'll give you a bit more colour on the operation in a few slides here. And also the community blockade from Xochipala, a smaller community quite a distance away from the mine, another unfortunately illegal blockade. That situation has been resolved. We do appreciate the support from the communities and from the government and the district attorney to actually step in and really put some pressure on to get them back to work as well. And again, we've gotten back into the Guadalupe open pit, so pleased to see us operating at full capacity across all the the pits and undergrounds on the site there at Los Filos. And in terms of other corporate actions for the quarter, we completed the acquisition of Premier Gold Mines. It feels like a long time ago, but it actually completed during the second quarter. I think there's some exciting stuff going to be coming from that, and we'll walk you through, obviously, the Greenstone project. Mercedes has been integrated. Ewan's doing a great job on I-80, and we're really excited about that as an investor. We own 30% of it, and we obviously took up our pro-rata interest in their financing during the quarter, so things are going well there. We've also acquired an additional 10% of Greenstone, as I think most are aware, but we love 50% of the project. We love 60% even more, and we've been working well with Orion and the project team to get that ready for launch into construction here in the second half. We sold Pilar. It's a gain on the financial statements, but we sold it for almost $50 million when you add in the royalty and the equity interest that we have. And we published our first ESG report, and again, that's a really important area for us to now start communicating and putting out a lot more public disclosure. So I think you should expect to see a lot more information on a quarterly basis, but also we'll be looking very closely at things like our emissions, managing our key areas where we think we can make a big difference going forward, which areas that have diesel emissions and Obviously, our energy sources in various countries will be looked at for more efficient ways of running the business. I'll pass it over to Peter to walk you through the financial highlights on the next couple of slides.
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