Welcome to the Equinox Gold First 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. [Operator Instructions] I would now like to hand the conference over to Rhylin Bailie, Vice President, Investor Relations for Equinox Gold. Please go ahead.

Thank you, Amanda, and thank you, everybody, for joining us today. Some of you were just with us at the AGM, which we wrapped up. And now, of course, we're going to walk through the Q1 results and our corporate update. We will, of course, be making a number of forward-looking statements today. So please do take the time to visit our website and to visit our continuous disclosure documents that are available on SEDAR and on EDGAR. I'm now going to turn the call over to our Chairman, Ross Beaty for opening remarks.

Thank you very much, Rhylin, and good afternoon, ladies and gentlemen. Thank you for joining us today. As Rhylin said, we just wrapped up our AGM and the very first slide I'm going to show you here in our presentation that's on our website is our wonderful Board of Directors. All of the motions before the meeting were passed. And I, of course, appreciate all the support we have from our shareholders. All of the director nominees were voted in as well to serve on the Board for another year, and I want to thank all of the Board members who you see here today for their service to the Company. Obviously, the Board runs our governance and major strategy. We spent almost all day yesterday in committee meetings. We had a board dinner where we talked strategy and the cybersecurity and various issues like that, that come up and I have to say every single board member made a significant contribution, and we certainly are well, well led on that front, and our shareholders should be very proud of the Board as it is right here. So thanks to the Board. So as you all know, this is the third year really that we have done this, and I'd like to kind of give a bit of a report card on what we've achieved in the three years we've been in existence since we began right at the beginning of 2018. And this kind of says it all. In 2018, we didn't have any operations at the start of the year. We decided to build the one mine we had under development. We had a pre-feasibility study on the Calco Mountain mine as well, which we did. We spun out and sold some of our non-core assets. We spent…

Great. Thanks, Ross, and it's a good segue into our Q1 operating results, and we'll start there with health and safety on Page 12. And I do want to recognize and congratulate Tom Doug and the team in California with getting Castle Mountain built in that first phase with a zero or nil total recordable injury frequency rates. And that's a heck of an achievement for brand-new mine build, so well done to the team there. And we did have three LTIs in the first quarter during our 4 million work hours, a little bit higher than our average. So obviously, we'll be working to bring that down over the year, but still a decent performance. And one event that's worth just noting, we did have very heavy rains as people know it rains heavily at Aurizona in the northeast of Brazil. And we had a 1 in 10,000 year rain event, so quite an event at the end of end of March there. There was regional flooding of Rivers and Freshwater Lagoons. And we've seen that there before when we're constructing the mine, and it's a thing of the future where there will be sort of ongoing events that we need to manage. But I'm really pleased with the team and how they performed during that. The tailings down, the plants and the mine were basically unaffected and managed through that rain. And the team also stepped in to help the community when the water treatment plant struggled to perform during that period. And we'll be making investments to continue to improve that infrastructure locally. So really pleased to see that reaction to things that do happen at mine sites in the environmental world. Then in terms of COVID-19, I don't want to dwell on this one. I think…

Okay. Thanks, Christian. So as Christian mentioned, in the first half of the year, we do have lower production in California and Mexico, and that's due to focus on waste, which ultimately will benefit our second half production. Mesquite especially had a significant stripping campaign and that was to access higher grade oxide ore it's the Brownie pit. We also are doing ongoing exploration, which is focused on mine life extension at Mesquite, and I'll talk about that later. Mesquite produced just over 23,000 ounces in the quarter and the all-in sustaining cost at $1,952 an ounce, essentially, a large part of that reflects the stripping campaign. It was $22 million of sustaining capital spend in the quarter. At Castle Mountain, the we are doing investment in leach pad expansion. We've been doing the work that was for the Phase 2 feasibility study that was announced in the quarter. And we've now gone to transitioning towards entering the permitting for Castle Mountain, which will happen later on this year. Production was just under 3,000 ounces. And all-in sustaining cost was $1,811 an ounce. We will continue to optimize the leach pad and the flows to the leach pad. Daily production balances has improved as we came into April at Los Filos. Our significant investments in 2021 are focused on advancing the expansion projects, which access higher-grade ore at Guadalupe, which we should be well into ore in Q3. And also Bermejal underground, which has development was restarted in April. We will start the first blast in May, and we get into the ore later on this year. We produced just under 30,000 ounces at Los Filos for the quarter at an all-in sustaining cost of $2,230 an ounce and spent $6 million on sustaining capital we were ramping up operations…

Yes. Thanks, Doug, and I'm just going to conclude with a couple of slides here. But just finishing off on 24, the two investments, IAD and Solaris, we're obviously very pleased with those and value creation so far. Together, they're worth about $300 million, and we still see lots of upside opportunity there. And when you add in these new projects in Red Lake, I'm going to dare to say that our goal here would be $0.5 billion of value or more. And as we've seen the growth in Solaris, we're starting to see an i-80, and we really are pretty excited about Saga as well. We really see the upside opportunity here is excellent. Looking at 25 and stepping back out to look at the portfolio as a whole. As Ross highlighted, we are now a nicely diversified at four legged stool. We've got two mines in the U.S., two in Mexico. A large mine in Canada, which will be the 34th largest. We've got two districts in Brazil plus another mine. This is a portfolio full of growth and opportunity in each one of these districts, each one alone in itself but an ability to add hundreds of thousands of ounces of production. So we've got the scale and diversification that we were shooting for and so really pleased to see that coming together. When I look at the next slide here, stepping back out and how we're positioned. The three right hand graphs here, we've highlighted this before. We're working towards 1 million ounces. We've got the highest growth in the sector by far. And we've got a 16 million-ounce resource base to back that up. So our multiple is low, which is the left-hand bar, it's just about 0.55. But I just want to when you…

Thank you, Christian. Thank you -- operator, can you please remind people how to ask questions? Did you want to say something, Ross, while they're queuing up?

No, I just wanted to -- just do exactly what we just did, so.

Perfect. Go ahead, please, operator.

[Operator Instructions] We will pause for a moment as call is joined the queue.

So while we're waiting for our phone callers to line up, I guess we can take a question from online. It says you will need about $300 million for CapEx next year. Is that funded by operations? And how much are you going -- what is gold price do you need to cover non-sustaining Capex?

Yes. Basically, that amount would be funded by our operating cash flow. But obviously, we have a very strong balance sheet in addition to that. So through both those sources, we have more than available funds to fund that. And in terms of gold price, I mean, it depends. We still got some decisions to make on the timing of announcing construction and layering in our capital, but certainly feel pretty comfortable, $1,500 per ounce gold and to be a bit below, but we've also got the ability to stagger these construction projects over the next three, four, five years, which is really what the plan is because they sequence really nicely almost one after another.

Perfect. Please go ahead and take some questions from the phone lines.

Your first question comes from Mike Parkin from National Bank.

Just one question on the Santa Luz project. You do mention that it's tracking on schedule. You gave the budget there of $103 million. Can you just give a comment there on the actual budget? Is it tracking in line with budget? We're hearing inflationary pressures on steel and some other items. Just wondering if you can kind of confirm that, that budget is still good or if you're seeing a little bit of pressure on it?

No, it's tracking fine. Our update was done late last year. And as we came into this new year, we've been very on top of making sure that we kept track of costs for materials, and we've been able to deal with everything. So we're doing very well.

We've locked in a number of contracts, obviously, and the commitments are a lot -- a long way there. And also take a little bit of an advantage of it. Obviously, the FX rate does help offset if there is any kind of sneak read there in inflation.

Right. What about Greenstone and some of the plans at Los Filos, obviously, you're going to involve some significant capital. Are you getting a sense that there's a bit of pressure on those budgets or the numbers you've kind of been speaking to, you feel good?

Yes. I think I'll take that one just as a general comment, please Doug jump in if there's anything I missed. But I think overall, I think there is a little bit of inflation, or call it creep coming along probably nothing outside the ordinary so far. But I do believe, over the next few years, there will be a little bit of inflationary pressure. We'll do things to as much as possible. We're updating the CapEx before we obviously launch into construction here right now. We'll try and lock in as much of the cost as possible, and we will do our best to also protect the currencies as well. There will be a number of currencies that will be feeding into the greenstone. Obviously, Canadian dollars, number one, but we've also got a few other currencies, too.

Okay. And that just kind of brings me to the last question. In terms of the cash on hand, is any of that sitting in CAD given that you're looking at starting a fairly significant spend there with Greenstone?

Mark, it's Peter Herde here. It is, in fact, the funds that we've just received from the solar sale oil in Canadian dollars, and we'll continue to start to build that Canadian dollar stockpile as we move forward here.

Your next question comes from Anita Soni from CIBC World Markets.

My question, I guess, follows up with similarly on hard rock spending. So you've provided guidance for the remainder of this year. But can you give us an idea what next year would look like? And I presume 2023 is where you would start spending in terms of your preproduction capital?

Yes. I mean, it's probably a little bit early to give you too much specific guidance until we make that kind of full decision in the second half of this year because it could have a three to six-month differential there. But roughly our percentage of the capital is 60% of the $1 billion, so $600 million. And it's, I would say, broadly speaking, think of it sort of half in 2022 and half and 2023, and maybe it's a little bit back-ended towards the later part of that, but that's probably the best way to think of it right now until we make something formal.

All right. So you would actually start construction on this in 2022 then?

Yes, correct. I mean we would probably -- our goal is to launch into formal construction in the second half of 2021.

Okay. And then second question with regards to some of your -- or with regard to and Santa Luz, as we look towards the project completion and think about the mine starting up, how do we -- like is there considerations in terms of COVID with stripping and making sure that the mill basically has or feed that will fill it for like hitting the ground running at the point at which the mill is ready to go?

Yes. I mean I'll take the first comment on that, but Doug, please jump in. I mean we are I think we may have just signed or we're just about to sign a contract with a major mining contractor who does support two of our other mines and is well placed and operating very effectively. Actually, we had our best quarter ever last quarter at Aurizona with the same contractor. And we expect them to kind of ramp up and be ready to go. And we're also with Fazenda, obviously just down the road. So we do feel pretty comfortable in that region. And I think we've had a good performance on COVID there. And we've seen the contractors ramping up as well. And it's been pretty good results so far. And I think being outside of the major cities has been a real advantage. Obviously, it was controlling the environments and the camp and the protocols. And vaccines are rolling out, and there's a large number rolling out, but obviously a huge country. So a just worked out perfect in terms of timing. I don't know, Doug, if you...

And then no. We've had -- we have standard verticals at each one of our sites. So we continue using that. And San Talus is also quite close to Fazenda. So it gets a lot of support from Fazenda. And we would just continue on with our protocols that we have. I mean, we've done over -- I think it's over 15,000 tests and...

18,000.

18,000 tests now. So it is very much part of daily standard operating procedures.

I guess I was just thinking more in terms of getting contractors, if that's the case, at the beginning, just to help with stripping and overburden and if there will be any pressure on getting that kind of labor given COVID concerns?

Anita, it's Peter Hardy here. Generally speaking, no, when we do our planning for construction projects, we actually plan right through to commercial production. And then as we get closer towards the tail end of the construction period, of course, we look forward through the first year of commercial production. So everything we're doing now is in anticipation of having a successful start-up of that project.

And U&M is mobilizing, looking at Doug, but I think it's kind of starting in May? It's mobilizing me starting mining in June, scheduled through the remainder of the year, but we're not just doing it for the preproduction period, it carries on, yes.

Okay. And then my final question is just sort of more of a broad-based sort of bigger picture. As you look at the number of assets that you have, I mean you've just recently sold Pilar. Is there anything else that may not meet your question going forward now that you've got in the Hard rock and Mercedes in the fold?

I mean, I'll take that, Ross, unless you want to comment. We will continue to look at our asset portfolio mix. And I think we made it pretty clear, we're potentially willing to look at creating some value from a few of the kind of smaller assets that we had. And we'll continue to look at that. Very happy to see is a small contributor to the overall profitability. And it does take quite a bit of management time. And I think we'll look at other assets in the portfolio as well. But I think it's a little bit early days to commit to any active sale.

Your next question comes from Kerry Smith from Haywood Securities.

Doug, could you remind me what the timing is on the pre-feasibility for the underground at Aurizona?

For Arizona, it's probably like Q3. We say H2, but Q3 is probably the end of Q3 -- into Q3, yes.

And then once that pre fees is done, I'm presuming you wouldn't need a full feasibility to make a go-ahead decision on that. How might that project fit into the timetable in terms of that meshing in with the other projects that you have?

With the other projects or with on-site at Aurizona?

Sorry, I'm thinking of the sequence of how you might sequence that, you've got hard rock, you've got Los Filos, you've got a bunch of things going on. I'm just wondering how that might be sequencing to the schedule? Or could they be concurrent?

So I think the scale of it, it could be concurrent because it's a linear project and doing the development on the first stage of the underground. So I think it would mention quite well. And I think it will take time, obviously, through both permitting and actually underground development and Scott's been working hard to add ounces on surface as well. I just can just keep an eye for that study, but we'll keep adding both underground and open pit, and I'll just allow us that flexibility and time line, and it will run concurrently.

Okay. Got you. And just on the $9 million write-down that you took on at Los Filos, is that or is that because you're not confident or you don't expect to recover those ounces in the pad now? Is that what's happened? And if that's the case, I'm just wondering what's changed...

Kerry, it's Peter. That's not the case. There's things really that contribute to the write-down. The first thing is, and it's an accounting thing, but you have to keep in mind that the the ounces on the pad are there effectively at fair value. We acquired the mine, and it was effectively on care and maintenance from the time of acquisition through to the end of the year. Heading into the beginning of the quarter, you basically have the houses that they're at fair value. And then, of course, we're doing some development and stripping work, sustaining capital work at the mine, not stacking a ton. For the quarter, and that's not the technical term. But stacking activity was less than a normal run quarter that also contributes to extraneous for the quarter. Which led to the write-down. But that's not an expectation going forward. And during a normal quarter, not something we would otherwise see.

Got you. Okay. So could we see a reversal then in a subsequent quarter there?

There is the potential for that, yes.

Okay. I see. I see. And then just on -- maybe Christian can answer this. Just on the COVID situation in Brazil. I know Brazil is obviously having a tough time generally. But are you able to sort of manage and control the incidence of COVID because your operations are relatively remote the play the towns that your employees live in are also relatively remote, which kind of helps to limit the incidence of COVID because, obviously, these people go on to their communities every night or after their shift change and then they're gone for a week or a day or whatever, then they come back. And -- but you've done a good job. I'm just wondering how that's -- how you've been able to do that?

I mean really straight up with you, carry. It's -- when you read the headlines, it feels like a very different world in a way, but we've been able to keep it -- I'm going to say and not go there a little bit, but under -- it's in single digits each site at most, and that's way down from where it was, I'd call it, a year ago. And I think it's just the rigorous protocol. We've got various different shifts and people coming in and out that are more amenable to allowing testing and periods of call it, quarantine or anything beforehand. We're very quick to trace and have people isolate if they have any inkling or symptoms or positive tests. And I think the local communities have really gone on board with this, too, because a lot of our workers really make up a lot of that population and families there. And kudos to them, when I was down there the OSS and others, not too long ago, like mask wearing is very common and our distancing and protocols, I think, are very strict. And I've been just really pleased with how they really jumped on that. Okay.

Okay. And maybe just the last question for Doug, just on Castle Mountain. In the quarter, obviously, the production was quite a bit lower, but to the pad and the grades were pretty much in line with with Q4. I'm just wondering what the issue was with the gold production?

It's teething problems on the heap leach pad, just figuring out the techniques to get the best solution circulation. So the guys at site are -- they're working on it, and it takes time for the to try each thing and sequence things are working best and for it to flow through essentially to the results to see what's actually working out well.

And are you kind of thinking you figured out the right formula here now. You are talking the disclosure that production was quite a bit better in March, I think you said. Do you think you kind of think in April...

In April. So, they're figuring it out. So it's coming. Yes, we've seen a doubling of daily ounces in April, which I think we put in the disclosure very specifically.

Thanks, Kerry. Another question for Douer Scott. When can we expect results from your present a Antalis exploration and also from your Aurizona regional exploration?

Scott Hefferman here. I'm going to be here a year first. The regional work is underway now, probably we're looking into Q3. One of the challenges we faced is and chemically, the closures in Brazil, the labs, the labs were locked down for upwards of two months. They are reopening now but with limited capacity. So this has definitely stoning the flow of our results. So recently anticipated news imminently, probably pushed to Q3. With respect to Aurizona. Exploration Aurizona is just starting in hurst. The overall exploration plan in Brazil was to focus on by yet for the first half of the year, which includes us how they to battle the range you've heard mention of in the north of Arizona for the first half. Now with this turning point, we're starting to mobilize and move some of the rigs from to Aurizon to start that work. So that -- those results will be backloaded in the year late to '21.

Okay. With regard to the Greenstone project, what factors are going to impact your decision to go ahead with construction? And what is the likelihood of this project moving ahead?

I'll take that to start. I mean, we've been spending the last number of months, getting up to speed on the project, the CapEx, the team, et cetera. I'm really pleased with what we've seen, and they've done a heck of a lot of work over the last few years. And at the moment, we're just really getting up to speed with sort of, call it, CapEx updates and getting key team members in place and getting some of the early works plans and schedule sort of debottlenecked. And I think we should be in a good place. And I think we've got a pretty good indication that we're willing to spend $40 million in early works construction this year that all things being equal, unless there's any major changes. We really do plan to be making a construction announcement in the second half of this year because the balance sheet is in a good place, and we'd be finishing off catalog, which I think is an important milestone to kind of sort of say we're moving forward now on the next project. And so those kind of sequence nicely. There may be a small amount of overlap, but we'll have high level of confidence in Santa Luz being done sort of on-time on budget by sometime in Q4, and this project should be ready to go by then for sure.

The all-in sustaining costs were quite high this quarter at some of your projects. What are your plans to reduce those costs and make these mines profitable?

I mean, maybe I'll take that at a high level, and Pete and Doug, please jump in. We said in the first half of this year that really we would be stacking, I mean, going to say, almost no ore at Mesquite. So you're really just pulling off those residual ounces that are up there. And opening up brownie will really start to open up that ore source. They're starting to hit it in the next few weeks here, but really in Q3, you'll see the impacts of that, and there's a leach lag to it. So we knew the investment was worthwhile. There's some really good ounces in oxide right there and lots of exploration upside in and around that area. So that will bring those costs down naturally. You take that denominator of ounces up and your costs will come down. And Castle Mountain, like I said, doubling the ounces in April will automatically bring those costs down. And as we just get more efficient with solution flow, pad management and running EDR plants, you're going to see those costs come down. And and Los Filos is more complex. And it was a challenging year last year. We had those two hiatuses with the COVID shutdown in Q2 and then obviously, the blockade in sort part of Q3 and Q4. And it's a big engine to get rev back up. And I think the team have done a great job and we're kind of well underway now and just freeing up the Bermejal underground development was the last missing piece for that future high-grade ore source and Guadalupe starting to see some better grades right now. And I think come early Q3, you'll start to see the benefits of that and that grade, and we'll show more ounces.…

I think also, if you can step into your Christian, it really shows the importance of looking longer-term than just quarter-by-quarter. Shareholders have to look at us as an evolving business where we have -- we are victims of our mine plan, we're victims of recovery changes and the natural variation in an ore body. And you're addable investigate is a perfect example of that. So shareholders really want to be looking at a one year or even a two-year time line in terms of growth and in terms of development and variation. You can't really look at a specific quarter because a lot of things change from quarter-to-quarter. But as you said, we're going to have a progressively better year as the year goes on, and hopefully, the corporate value will increase accordingly.

Thank you, Ross. You talked about your ESG strategies and that you're going to be setting greenhouse gas emission targets for this year. Are you looking at options, green power sources, natural gas, things like that at your properties?

And I think the short answer is absolutely yes. And I'm going to name Ross on this, but Ross is Chairman, who obviously founded a green energy renewable source company. It does put a slight different angle. And every time you look at a project or an opportunity in each of these countries, we look at those sources. I mean, California, obviously, solar power is an option, renewable sort of hydropower in Brazil is obviously an option. We will look across the spectrum, particularly as we build projects, but also as these projects move on, at alternative sources because they're becoming a lot more competitive in terms of pricing and sourcing and ability to access these types of sources as well. So absolutely.

Thank if gold continues to go higher as we all hope it will. What could go wrong in your countries with things like legislation, complication employees wanting higher wages, securities, how do you deal with those things?

One of the best ways to do with them is through having a diversified asset base. So if things go upside down in one place, you're it's offset by good things happening somewhere else. And it's very hard to predict the future of what can happen from country to country. And that's why I take great strength in having a diversified asset base, not just in terms of country, but even in terms of location and specific assets. So with seven operating mines right now. And with Santa Luz will our be 8. We have this strength in diversity. And right now, I mean, Canada is in pretty good shape. I think California is in pretty good shape. I don't hinder any great rumblings of big changes in the U.S. and the standpoint of mining taxation. Brazil is quiet. The country that I has from time to time make has been a noise recently about higher taxes as Mexico, but those have recently died down. So there's nothing on the real immediate horizon. Farther away, there's lots of noise about Peru and Chile right now. We don't have operations there, but countries have to be very careful to deal with their taxation, making sure it's competitive because otherwise, companies simply move their capital elsewhere. And they these countries often lose the benefit of anything when they increase taxes, they often receive less in tax revenue over the long term. So nothing is really on the horizon right now, but we take great strength and even diversified asset base.

Thank you, Ross. Another one of your favorite questions. Are there any plans for dividends or share buybacks?

Do you want to take that, Ross?

Yes. We talk about this every board meeting. We can't wait until the day that will pay a big dividend. But currently, the focus is on taking our capital and put it in the ground where it creates additional value for shareholders over the medium term. Right now, we have such a plethora of great investment opportunities that this will add to the capital value of the Company, that should reflect itself in income gain and in the capital gains which will more than offset any shareholder value that come through dividends. When we fund we have surplus free cash flow, we'll give it back to the shareholders as soon as we can and it cannot come soon enough.

Thank you. So may want to know what our exit strategy is for our Solaris investment?

I'll take that one, too, Christian. So what we've done right now is we've been very cooperative with Solaris, and we've -- they had an interest in finding the block of stock. We were able to provide that for them. We have no further plans to divest any more of our shares for the foreseeable future. We are very supportive of what Richard Work and Dan Earl and their team are doing in Solaris. They're doing a marvelous job. We are coming along for the ride and enjoying the run. We -- the business model, Soliris is to explore and sell. This is not a company that's planning to build a big copper mine and Equator. They're trying to do what Richard work has done so, very well with other companies it is fold in the last 10 years. We're finding large companies to take on these assets. There weren't some in the copper deposit in Ecuador is of a grade and size that would be of interest to any major copper mining company on the planet. So I fully expect not too far away, maybe this year, maybe next year, but not in three years, that he'll get an offer. He can't refuse and he will head to the exit, and we will be more than happy to go to the exit and with him. And he knows that, and we're going to hang on for the medium term, expecting that's going to be a happy ending for all shareholders, not too far away.

Thank you, Ross. We are well over time. So if there's questions that we didn't get you, my apologies, we will get back to you by phone or by e-mail. I'm going to hand the call back now to Ross and Christian for closing remarks.

Well, I only have one thing to say, which is a big thank you. Thank you to all of our shareholders and interested parties, people who are on this line. For your support. We are a young, very dynamic company. We've had a wonderful run, I think, so far. I hope you're feeling as proud as I am about how we've built into a real world-class company in a very short amount of time. And also, I don't be recognized that it takes a lot of effort by a lot of people in our management team to get there so it's my thanks to the shareholders. It's also my big thanks to our Board of Directors and management team for getting us there. And I really look forward to reporting to you next year, at the same time, same place on what a wonderful year we have in 2021 and what great promises we have in-store for 2022. Thank you again.

Thank you. This concludes the conference for today. You may now disconnect your lines. Thank you for participating, and have a pleasant day.