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Equinox Gold Corp.
8/8/2024
Thank you for standing by. This is the conference operator. Welcome to the Equinox Gold second quarter 2024 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. If you're participating through the webcast, you can submit a question in writing by using the text box in the lower left quadrant of the webcast frame. I would now like to turn the conference over to Rulyn Bailey, Vice President Investor Relations for Equinox Gold. Please go ahead.
Thank you, Jaylene, and thank you, everybody, for joining us today for our Q2 call. Peter and I are dialing in from beautiful Princeton, B.C., because we are two days into the ride to Greenstone. So this is a big – not cross Canada, I guess cross half of Canada. We're riding from Vancouver to our new mine in Geraldton, Ontario, to celebrate the mine opening, but also to raise money for the Geraldton District Hospital, which is the hospital that serves the Greenstone mine workforce and also – five indigenous communities, and about almost a 3,000 square kilometer region in northern Ontario. So it's going really well so far. It's super exciting. We've got people from our mine sites in Brazil and the States and in Mexico that have flown up to Canada to join us for the ride. And we're making our way across the country, raising money for the hospital. Like I said, we've raised almost $1.2 million so far, thanks to the generosity of our vendors and some industry sponsors. We're also raising money for four schools and a hospital in Brazil and for the Alzheimer's Association of California. So if you're interested in more information about that, you can go to the Ride to Greenstone website or the Equinox Gold website, and please do follow the progress as our cyclists make their way across the country. After that plug, we'll now turn it over to the conference call. So we will, of course, be making a number of forward-looking statements today. please do visit our website, Cedar and Edgar, to learn more about the company. And I'll turn the call over now to our President and CEO, Greg Smith.
Thanks, Relynn. Good morning, and thanks, everyone, for joining the call today. On the line with me is our COO, Doug Reddy, our CFO, Peter Hardy, and our EBP of Exploration, Scott Heffernan, and, of course, our VP of Investor Relations, who you just heard from, Relynn Bailey. Today we are discussing Equinox Gold 2024 second quarter financial and operating results. I'll start with a broad overview of the quarter and then I'll turn over the call to Pete and Doug for more details. I'm going to start with safety. We did unfortunately have a fatality at our Fazenda mine in Brazil in June. This is a tragedy for all of us at Equinox and we extend our deepest sympathies to our employees and also the family, friends and coworkers. We did have a site-wide suspension of operations at Pezenda in June to facilitate both the investigation and also to refresh our site safety training. On the environment side, we did have no significant environmental incidents during the second quarter. And as previously reported, we published our fiscal 2023 ESG report in May during the quarter, and you can find the report on the Equinox Gold website. Before the quarter, we produced just over 122,000 ounces of gold and sold just over 115,000 ounces at a cash cost per ounce sold of 1747 and an all-in sustaining cost per ounce sold of $2,041 per ounce. For the first six months of the year, we produced approximately 234,000 ounces and sold approximately 232,000 ounces at cash costs of 1653 per ounce and almost the standing cost of $19.93 per ounce. We did have a few developments during the quarter that affected our production and costs in Q2, and also drove an update to our fiscal 2024 guidance. In mid-May, we completed the acquisition of the 40% of our greenstone mine that we didn't already own. We spoke about this on the Q1 call and in a couple of press releases, but as a reminder, this transaction delivers full ownership of the greenstone mine to Equinox Gold, and consolidates ownership of Greenstone, which is one of the largest and highest-grade open-pit gold mines of scale in Canada. This transaction is accretive to our cash flow and our EBITDA. It delivers substantial near-term value, and it increases the company's average mine life, reserves, production, all while lowering our consolidated per-ounce operating costs. Greenstone has been ramping up largely on plan with our first gold pour in late May and just over 16,000 ounces produced through the end of June. Production has continued to ramp up with just under 20,000 ounces produced in July alone at Greenstone. We recently concluded a multi-day shutdown to address various wear and process issues identified through the startup and are now pushing toward achieving commercial production by the end of Q3. With the ramp up progressing well, we've maintained our guidance for Greenstone with an increase to reflect the consolidation of ownership. We previously reported in April that we experienced some geotechnical issues in the south wall of the Piaba open pit at Arizona, and that we had temporarily suspended mining in Piaba. We continued to process stockpiled ore through April, and production in Q2 at Arizona primarily reflects processing of this material. We then idled the mill in May and June and accelerated mining in the new Tadajuba open pit. We did begin processing first ore from Tata Juba in early July. We are working on mitigation activities to recommence mining in Piaba, and this is progressing well. As the timing of starting mining again in Piaba does remain uncertain, guidance for Arizona has been reduced to take into account lost production during the suspension of processing in May and June, and also to reflect the lower-grade ore mined primarily from Tata Juba through the remainder of the year. At Mesquite, 2024 is primarily a stripping year as we pre-strip the ginger pit which supplies ore to the mine or to the heap in 2025. Mining at Mesquite has been performing well with recoverable ounces stacked exceeding plan. However, we are seeing slower than expected recoveries off a heap leach pad from ore stacked in prior periods, in part due to the increasing pad height. We are working to accelerate production, but we have reduced our 2024 production guidance for Mesquite to account for the slower recoveries. Finally, the company has concluded its previously reported assessment of the phase one operations at Castle Mountain and we've elected to suspend the contract mining and processing at Castle Mountain phase one and transition to residual leach only. We will continue to focus on advancing permitting and engineering of the phase two expansion at Castle. Our guidance has been updated to reflect this change at Castle Mountain and Castle will be reported as a development project going forward. Of course, we will continue to recover ounces off the pad through the year and into next year. With these changes reflected, consolidated guidance for 2024 has been updated from 660 to 750,000 ounces of gold to 655 to 750,000 ounces of gold, with costs updated to cash costs of 1305 to 1405 per ounce and all in sustaining costs of 1635 to 1735 per ounce. This continues to reflect a substantial increase in gold production at much lower costs over the second half of the year. With that, I'll turn it over to Pete to discuss our financial results.
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