Thank you for standing by. This is the conference operator. Welcome to the Equinox Gold First Quarter 2022 Results and Corporate Update. [Operator Instructions] I would now like to turn the conference over to Rhylin Bailie, Vice President, Investor Relations for Equinox Gold. Please go ahead.

Thank you, Sheri, 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, SEDAR and EDGAR to read the rest of our continuous disclosure documents. I will now turn the conference call over to our CEO, Christian Milau.

Thanks, Rhylin, and welcome, everyone. Doug, Peter and I will walk you through the first quarter results here and take questions. But just as a reminder on the first Slide 3, we're an Americas-focused group that's really building a sizable platform in the Americas. We've started out with 6 producing mines at the moment. We've got the one in commissioning in Brazil, and it's ramping up towards commercial production at the moment, and we've got 4 large growth projects. So this year, we'll be producing 600,000 to 700,000 ounces with a clear path to 1 million ounces over the next couple of years as our growth projects come in on stream. We've also got a strong balance sheet to fund that. And just leading into this quarter, as expected, we said the first half of the year would be a bit slower in first quarter, particularly. And we expect costs will continue to reduce over the year. And as we move through the year, production will ramp up as we bring new mines online and we hit into the higher periods of production starting in sort of Q2, Q3 period this year. So pleased with the first quarter's costs. They are roughly in line with expectations. We set those with our guidance early in the year. Production was a little bit light, and we'll walk you through why that happened and how we see production moving up over the year. And definitely, it's hard to compare to Q4 2021 as we were very back ended last year. So we'll walk you through the quarterly production here. Looking at Slide #4 in terms of recent highlights. Santa Luz poured its first gold on time. Recoveries have been good. It was in the end of March. So we're really pleased with that.…

Thanks. With respect to responsible mining, we had 5 lost time incidents during the quarter for a total recordable injury frequency rate of 3.76 per million hours worked. The 12-month rolling average remained lower at 3.01. We're also very pleased, of course, that we had no significant environmental incidents to report during the quarter. As to operations, we produced 117,000 ounces of gold, as Christian said, that was a little lower than expectation. We did sell 119,000 ounces of gold. We had lower production. The production was primarily affected by RDM in Brazil, which experienced rain events late in Q4 that affected ore access heading into the quarter. And in addition to that, we had a 10-day suspension of plant operations. At Aurizona, we had a little more reliance on our lower grade stockpile than expected. An example -- and so the grade was lower for the quarter at 0.94 grams per tonne for reference in Q1 of last year, we had 1.3 grams per tonne during the quarter. And Mesquite, the production was lower, but that was expected due to waste stripping that's happening there during the quarter. Our all-in sustaining cost of $1,578 per ounce, as Christian mentioned, is close to expectations for the quarter, and we remain on track for the year for our guidance range. We expect to increase -- and that's due to increased production cash flow and lower cost that we're going to see in the second half of the year. The increase in AISC for this quarter versus the same quarter in the prior year, it's primarily due to the cost escalation you see across the board and across the industry and also in part by the slightly lower volume than we were expecting for the quarter. With respect to our financial results,…

Thanks, Peter. So as noted, several of our mines were focused on stripping in Q1. We will be benefiting from that as we move into subsequent quarters. This is similar to how it worked in 2021 where we had stripping earlier in the year and had stronger subsequent quarters, especially the second half of the year. Mesquite is particularly one of these cases. They had a low first quarter as we focused on waste stripping in the Brownie pit. Production has picked up in this quarter already, and we should have good production through both Q2 and Q3. I think Q3 will be our strongest quarter in Mesquite this year. We are now working on permitting for additional pad space, leach pad space at Mesquite. And we're filing for permitting for drilling across the highway. That will be for longer-term opportunities at Mesquite. Exploration drilling has been focused on developing additional mineable reserves adjacent to the current active mining areas. And this month, we are starting an injection leaching program, which is drilling into our existing leach pad to enhance overall recoveries in areas that have not been fully leached in the past, so we should be benefiting from that additional opportunity. At Castle Mountain, we previously discussed the issue that we've had with [indiscernible] ore having slow percolation. So we have established a crushing and agglomeration circuit for the ore, and that will provide better percolation overall, and that will lead to shorter leach times and improved overall recoveries. Pad 1B has been in construction. It's nearing completion now and it should be ready for use in Q2. And we are drilling in areas of dump material, south dump, which will bring in additional feed for the Phase I. It allows us more flexibility in our feed going to…

Thanks, Doug. It's a good review of the operations. And just to conclude things, I've got a few slides here, and ESG, obviously, is a critical topic that I do want to touch on here. We just published our second full ESG report for 2021. It's available now online. You can access that. We do publish quarterly data as well on our website. So we don't wait until the year-end to publish it all at once in our report. But really pleased with that report, taken steps forward in terms of our disclosure and pulling together our data, which is only our second year of doing this. So kudos to the team for pulling that together and making that progress. In terms of a few other areas that maybe highlight that come out of that, we started and initiated a very serious safety program that applauds the good record that we have on various sites, and we now give out awards for our safest site, which was Mesquite last year. For our most improved, which was Aurizona last year, and we also give out individual awards for extreme sort of dedication to the safety part of our business or for coming up with unique ideas for improving the safety at our mine sites. So if you want to get a bit more on that, it will be in our full report. We are working on our energy and GHG plan, so we're working on the long-term plan there. This year is really focused on coming together and bringing the data together so that we can set intermediate midterm targets as well as our long-term targets for reduction of GHG gases. We continue to focus on communities. The Aurizona water treatment plant now is fully operational. Gregg Bush and his team…

Thank you, Christian. Operator, can you please remind people how to ask a question?

[Operator Instructions]

I'll take a few questions from online. So we all saw IAMGOLD's announcement this morning, and I wonder if that's affecting your share price today. How do you feel confident that you'll be able to stay on budget at Greenstone?

Yes. We do keep an eye on the market and all the other projects going on in Ontario currently at the moment, of course. And it's always disappointing to see a cost overrun. But we do think it has probably had some impact on the share price because I think people do watch those projects and Greenstone is probably the third in the actual sequence of new projects coming on stream there in Ontario over the next year or 2. And like as Doug said earlier, we just had to visit the site, and we keep very close attention to all the issues that we've seen out in the sector with building projects in Ontario, but also in other projects around the world, and we've built a mine per year over the last few years. Right now, we're really pleased with the team that's in place there and the progress. We're really pleased with the actual preparation and readiness. And that was something that was critical to us when we started this project. Us and Orion, spent a lot of time with the team there, which the team there was primarily led from the Agnico Eagle team that built a few of their northern mines that I've been on this project for a number of years. And we're really pleased with the readiness. The engineering, as Doug alluded to, the team in place, we did an external review of that. And so we felt going into that, we were able to, number one, observe the market, look at the cost escalation, contingencies, make sure we're planning ahead and anticipating some of the challenges that we're going to see as we build the project. And I don't know, Doug, if you have anything else to add to that.

Just as we looked at getting involved with Greenstone, our due diligence was an extensive review of the CapEx on the project. And then after we took over our 60%, we continue to do our review on the engineering and the CapEx. And then Greenstone initiated an independent review, QRA review of the CapEx as well. So it's been gone through many times, and we put in a -- what we believe to be an appropriate overall contingency. All the bidding is done accounting for anticipated escalations. So by doing all of that, we think that everything is being mitigated and there is a constant monitoring process as well as tracking of trends. So it's a good team on site, a good level of project readiness before we announced construction and now we're just working through the engineering essentially 91% completion, which means that we've got a good firm basis for all the materials and everything that are related to the site, and we've been doing our engineering reviews all the way through. So I think the level of which the project was that before we even announced construction is one of the pivotal factors that help us to be where we're at right now and being able to follow through with as many contracts and fixed contracts as possible at this stage is critical.

Thank you. Staying on that cost trend, given all the inflation that we're seeing in other companies again, do you feel like you've adequately budgeted that in and do you think you're going to be able to achieve your all-in sustaining cost guidance for the year?

Yes. I think I'll start and Pete, if you have any comments, please jump in as well. But we did anticipate some of that when we did our budgeting and our guidance review early in the year. And as I said, for the first half of the year, we anticipate $15.40 in cost. I think we're within $20 or $30 of that basically in the first quarter, which is meant to be our weakest. So I think we're tracking nicely. And we've done our best to anticipate that because we did have some visibility, particularly in Brazil and California and Mexico as we were coming into this year. Pete, I don't know if there's anything else to add?

No, we are tracking very close to what we expected was for cost escalation, and that's all factored into our guidance.

Thank you. Operator, we’ll take a question from the call now, please.

Absolutely. The first question comes from Mike Parkin with National Bank Financial.

Can you just remind us what your budget for diesel or oil is for Greenstone on your base case versus -- if you have any hedges in place?

Is that in reference to construction versus operations?

Yes. Just in terms of like are you exposed to that with -- I imagine it's a contractor doing your earthworks. Is there a locked-in price there per tonne moved or are you -- is there an inflationary factor component to the contract?

Yes. The contracts allow for escalation for the earthworks. It's pretty much a set overall approach to it. And we have been working on the long-term pricing for consumables. -- specific number. You have to give me a minute to sit through my pile of paper and dig that out. So I'll come back to you or we'll e-mail you afterwards.

None of it is hedged.

Okay. Rhylin, if you can just e-mail it to me afterwards, that's fine. And then with respect to the Castle Mountain Phase 2, you gave that update good color in the press release there around in terms of surface disturbance, what that is potentially going to trigger in terms of your closure plan. Is that new or is that potentially going to defer the potential of starting that Phase 2 expansion?

No, we think we've already taken into account. And we're staying within the overall footprint. That's always been a mandate for us, but we do anticipate that we'll end up going through -- I don't know what the acronym stands for. I know [indiscernible], but we will be doing an impact assessment and so we anticipate that in our overall timing. But we think we've been very careful to consider the various -- bring in the mitigating factors to make sure that it will be as smooth as possible given that it will be a several year process to work through it.

Yes. We've taken the conservative approach to assuming an environmental impact, a new environmental impact statement is required here rather than just an amendment to the plan of operations. So a couple of years to do that.

Okay. And then just circling back to Greenstone, in terms of like your large steel equipment as well as the steel printing of the mill, has all of that been ordered? And if so, are you seeing -- are those kind of prices protected or are you exposed to the elevated steel prices?

Major pieces have already been contracted. We -- as I mentioned earlier, escalation was accounted for when we did that. We do know that we had early warning on trends, which essentially both Equinox, Orion. We're meeting with Greenstone on a frequent basis to see how that would play out for steel prices and what the mitigating actions would be. The team on site took it to heart to work through and find ways to be able to reduce what they saw as a potential cost escalation beyond what the original budget was, and they did a very good job bringing it closer to the online, but they did consume a bit of their overall contingency to be able to account for that. But we have, I would say, a reasonable contingency overall, and they are looking for the remainder of the project to see all the opportunities where they can make further cost savings. And that includes things such as financing some of the equipment that we'd be doing for sites. So it's not all one way.

And I think just to give a little more color, we've got most of those big contracted ordered items are in the track now. The time lines are set. A few of the big trucks arrived this month, interesting on site, steel was actually being shipped in the day. We were watching it through the window come through the gate. So a lot of those things are fixed in price and they have a set time line. There's still some smaller contracts that I'd say still have to be finalized in that. But the big things are actually in the pipeline. So we're feeling pretty good about that actually.

Okay. And is that a function of having a greater percent of your engineering complete versus [co-tape] when it kicked off. You're within 5% of their project yet you're months behind in terms of when the project kicked off or quarter behind?

Greenstone's team had already been through a stage prior to us getting involved where they had been through vendor drawings and advanced engineering prior to us coming in. And then as we move forward and they started to build up their team, there were certain vendor drawings that needed to be changed or updated on the engineering, but it was managed very well, `brought up to a point where we were doing engineering reviews on all the activities that they've been doing. And it was targeted that we would be finishing the 90% engineering in April. So it's just a little bit behind because it's just been coming to the completion -- actually, it was -- sorry, March, and it got completed in April. So we're very much on track with achieving that. And that means that all the material takeoffs, which are critical to make sure we're not going to have a blowout on the actual materials that go into building the process plant and facilities are accurate.

And so I'll add that the procurement function was a key focus for us from -- as soon as we could close the transaction through the fall and for the Greenstone team who is proactive in getting those large equipment orders in and fixed, as Christian and Doug have already described, to help with cost containment and what was already done at rising price environment. So there's a lot of focus on that through the summer and fall last year.

Operator, we’ll take the next question from the phone, please.

Absolutely. The next question comes from Spencer Lehman, a private investor.

I'm a little confused on the balance sheet. And when I do the math, I don't quite understand how you lost that much cash. It seemed like at the end of December, you had around $550 million, and the debt was about $580 million. So pretty much we're like zero net debt. And now you're at $385 net debt and the cash -- I guess, the cash was from $546 million down to $151 million, which was about $395 million. And I don't see where you lost that much. Did you pay down the debt somewhat or where does all that cash go?

Let me just start, I mean our cash at the end of the year is $300 million. It's now just over $150 million plus the --

I'm sorry, I saw the cash was $546 million at the end of the year.

No.

Maybe I'm getting that from Yahoo! Finance. Is that incorrect?

Yes, it must be. I've got Peter nodding his head here. He's CFO. So yes, it's gone from $300 million to $150-ish million, then you add another $115 million we received within days of the quarter end. So we're not much below the $300 million approximately at quarter end. And the big thing to remember for this year is, I think it's about $700 million of total capital, which is a lot of Greenstone, almost half of that, and then the other projects that we have on the go. And we're spending that on a quarterly basis, so 1/4 of that's over $150 million a quarter. And we said in the first half of the year, we're not generating a lot of cash with 85% of our free cash flows in the second half of the year. So we're going through -- as we did probably last year as well, first quarter is definitely weaker. It starts ramping up in Q2 and then the second half of the year is strong. But the balance sheet is in good shape. And please reach out to us off-line, if you want to, we can walk you through, Pete will walk you through the balance sheet.

Well, that explained, if my figure is incorrect, I'm going to say the Yahoo! Finance, that I saw cash at $546 million, if there was $300 million that explains it. Is your long-term debt still around $580 million?

I think it's about that level, if I can remember correctly.

Yes.

Okay. So that hasn't been -- do you see that -- are you comfortable with that amount or could you see that being reduced now over the coming months?

Yes. It's Peter here. We don't see that reducing over the coming months. We're in a CapEx-intensive period. As Christian alluded to earlier on the call, we're about that point in the cycle of our credit facilities, where we'll look to refinance. That might include an expansion of the credit facilities. I think you can see that deleveraging occurring around when Greenstone comes online. So we're comfortable with the level of leverage we have. We definitely have room for more. And so we're going to maintain these levels, maybe go up a little as we move forward. And then as we move into 2024, you'll see the deleveraging.

Well, my apologies, my mistake was trusting the Yahoo! Finance statement, I guess.

I'm glad you flagged it. I'll certainly get in touch and have that number corrected. So thank you for bringing it to our attention.

So we'll now take some questions from online, and we have quite a few today. So the first question is interesting and probably worth clarifying. So Brazil politics, Brazil permitting. So Belo Sun has a setback with their permitting is that any way related to RDM issues? And what do you feel about the upcoming October election will that change the view towards mining in Brazil?

Yes, I'll take that. It's Christian here. I can't speak for Belo Sun for sure. And I'm not familiar with all the intimate details. I do believe there is an intra permitting-related issue there, which is indigenous communities, and we don't have that around our mines. So it is different. I think it's difficult to compare the apples and oranges in that sense. Brazil permitting generally, it's quite a -- I'm going to use the word bureaucratic procedural process for permitting tailings dam raises or getting your mine permits in place and it takes time and you have to walk through the steps and the paperwork in that. It's probably improved a little bit over the last few years with the current government, but it's still quite a process. And as you can see, we still sometimes get challenged with timelines on that. The one thing I can say is we do have a top-notch team there that has helped us through and navigate all this because we've got the 3 different states that we work within. And the permitting is quite state-oriented in certain aspects, particularly around the environmental agencies. But we do feel good about permitting all of our operations, our tailings dam raises. We've had good success in the past. We're using the best methodologies for things like tailings dams, downstream for RDM is the safest and best possible, and we're confident we'll get through that. It's just sometimes the timing is a little bit uncertain there in Brazil. In terms of elections, boy, I'm not sure I'm totally qualified to comment on that, but I'll make a general comment. Bolsonaro's government over the last few years has been, I'd say, mildly positive towards foreign investment in the country, and that's what I've heard from a lot of people, certainly, regulations and permitting and labor relations and laws and rules have been slightly more streamlined, I would say, that allow things to happen more quickly. You saw with us getting new permits in Bahia, probably reduced a lot of the nuisance lawsuits and things that you sometimes historically have seen in Brazil. So I would say a positive step forward in that sense. I don't think you're going to see a shift change at the moment, even if the government does change in October, and I don't want to predict who's going to win that I'm not close enough to say that. But I don't think you're going to see a shift change even if the government changes because I think it's been a pretty positive environment in Brazil. And we've certainly felt that doing business in Brazil over the last 5 years has been overall positive and swinging in the right direction where you do see certain countries around the world right now where it swinging a little bit to -- a little bit more negative towards foreign investment in mining, where I would say Brazil has been slightly more positive in that aspect.

And I would just add, if I can. Even prior to Bolsonaro’s term, we saw labor and mining legislation reforms coming on even prior to his term. So it’s been a mining and foreign investment friendly jurisdiction for some time now. And we would hope, of course, that, that would continue regardless of who’s in power in terms of President.

Thank you very much. Back to cost question. So what percentage of your costs are related to diesel, are you considering hedging or possibly given stockpiling diesel to reduce future costs?

Yes. It depends on the individual site and Pete add anything, if I missed something, but diesel heavy truck, heavy sites like Mesquite will be probably closer to 15% to 20% of our costs would be diesel-oriented where I'd say sites that are moving less tonnes on a daily basis are probably closer to the 10%, 12% basis. So it's probably in the 10% to 20% overall. So when you factor that in and you look at diesel prices, it is a step change in some of these diesel prices. But in a number of the countries work within it's not completely market-oriented. The U.S., obviously, when the price of oil goes up, the price of fuel usually on the ground moves pretty similarly. But in Brazil and Mexico, it's slightly more, I'd call it, subdued through government control to a certain degree, where you'd see it doesn't go up quite as much as the fuels -- as the oil price, it doesn't go down as much as sometimes the oil price. So slightly more stable. And it's only 10th to -- 5th of our overall all-in sustaining costs. So an increase of 20% or 30% there. It isn't a massive increase, but it does add on to things like labor and consumables.

Yes, we do explore opportunities to hedge. We haven't done any as of yet, but that doesn't mean we won't do any going forward.

I've got about 6 questions related to growing production and long-term all-in sustaining cost. So I'm going to try to combine them into one that makes sense. So you talk about 600,000 ounces of incremental production growth. When can we sort of expect to see that and how will that affect your long-term all-in sustaining costs as you ultimately move toward that 1 million ounce per year target?

Yes. So in terms of the sequencing, we had that information on [60], maybe not the timeline there, so it's a little bit fluid. But Santa Luz, that incremental production is coming on today essentially. So that's kind of done. We'll put a tick in that box. Greenstone, that 240,000 ounces will start in the first half of '24. So from then onwards, you'll see that run rate improve. Los Filos will be a little more gradual. As we get through higher-grade ores over the next sort of 12 months, you'll see that gradually move up, give or take, 50,000 ounces in total. And then when we build a new CIL plant, you'll see it go up another 75,000 ounces. And that will likely happen after Greenstone's done. So call it from 2025 onwards at some point there. Castle Mountain, you'll be adding 180,000 ounces from the incremental increase in production. We plan to build that and get that permit dealt with while we're actually building Greenstone. So you get your permit. Greenstone will be finished. You start building Castle Mountain in Phase II. So call it, 2026 when you start to see the 180,000 ounces extra there. And again, Aurizona underground will be kind of a gradual thing as we get into underground ores over the next few years, you'll see marginal or incremental improvements there. The second part of that question was?

Just longer-term all-in sustaining costs?

Longer-term all-in sustaining, yes, good question. So yes, as I said, we have an elevated cost in the first half of this year. The second half of the year, depending on inflation, of course, were any changes is anticipated to be below $1,300. So a big step change there already. Part of that is from just improving the current operations, adding the lower cost mines as we move forward. And in the long term, I think I'd say a very rough estimate, $1,100, $1,200 type all-in sustaining costs before I probably would say closer to $1,000, but with current inflation, I don't want to say $1,000 today. So you'll see that gradually come down, and it will be more in line with industry peers and norms.

So project specific, Castle Mountain and Los Filos, how are we going to get the cost down there?

Well, Castle Mountain has been a change in the way we treat the ore. It was originally run-of-mine, but the percolation issues with this particular ore is such that the recovery takes too long. So switching to crush and agglomeration will provide a quicker leach time gives the ability to get the full recovery in a shorter period of time. It does a whole bunch of other things in regards to reducing the amount of area that we have to carry under leach and it just improves our overall operation for Phase I. Phase II, of course, is a different story. It's a much bigger project. It has much more scale. So it provides a better overall cost per ounce when we move to the Phase II. So Phase I is a step towards Phase II.

And just can I add on Phase 1. Right now, you have to remember, we're doing that Pad 1B, which will cover the rest of the Phase I, basically leach pad space. So that capital is concentrated into 2 or 3 quarters. So if you look at the 2,300 last quarter, I mean a lot of that cost is just in this one-off leach pad expansion, then you get the benefit of that for the next number of years.

So the remainder of phase I.

For the remainder of Phase I. So as Doug said, it's really going to come down just because you've got lumpy capital into all-in sustaining costs. And I guess that's one of the disadvantages of all-in sustaining cost versus cash costs. If you have a heavy capital short-term period, it does reflect in all-in costs.

And with Los Filos in many ways, it's the backing up of several development projects that should have been happening in 2020, 2021, which we've gotten through most of the stripping in Guadalupe. There's still some more to be done during the next phase of that particular pit. But it's fully producing now and contributing as I mentioned earlier. We are doing the stripping for the expansion on the Los Filos open pit. And when it comes to Bermejal underground, it got so delayed by 2020 that got pushed into 2021 and now we're still doing the development that should have happened previously on Bermejal underground, so it's catch-up. Those all contribute more ore or higher grade ore to Los Filos. And ultimately, our preference would be to have a CIL plant. It would have been nice to have that yesterday as opposed to in the future because it gives a better recovery and ultimately is a far more efficient, a better cost per ounce structure than putting higher-grade ore onto a leach pad. So we look to that for the future. But it's been -- as we've said repeatedly, we want to see stable operations, stable relationship with the communities before we make a commitment to that CapEx, but ultimately, it would be a bigger, better overall cost per ounce.

And we're encouraged by that progress to date. The last couple of quarters have been sort of steady. We've been able to get back into focusing on producing gold than having community relations issues and that. So we're pleased to see that progress at the moment and the team at site is actually now focused on how do we improve the mine plan, get those costs down and we call it the shorter term here.

Question for Peter. Are you sufficiently funded to achieve all of your expansion projects and will there be any equity financing required?

We are sufficiently funded. We're comfortable with the strength of our balance sheet, and we have no intention of any equity funding.

I'm going to take a question that's been coming in to me. So as some of you may have noticed, our main website has been down since Thursday of last week. So our website vendor had a technical issue. All of their clients were down. So it certainly was not isolated to Equinox Gold. It did not affect any of our computer systems. It was completely separate from Equinox Gold because the website is hosted by a third-party vendor. So we put up a short-term interim website. It has hopefully most of the information you need, but it is certainly condensed from what we normally have online. Some of the website functionality is back through that vendor. So we are considering transitioning back to that vendor, but we want to wait until we know that they've got 100% stability. So hopefully, we'll be back with that big website this week or next week. But for now, we're going to stick with our interim website because we know it's at least consistent disclosure. So you can always reach us by phone and by e-mail. So thank you for your patience in that regard. We have no further questions online. So I will turn it back over to Christian for closing remarks.

Thanks, Rhylin, and thanks, everyone, for joining. Good progress, great to see things happening on the ground. And as we execute this year, we'll keep you up to date, particularly on Greenstone and our important projects and really looking forward to site visits in the second half of this year, get people to come out, put boots on the ground at each of our sites in Ontario and Brazil that are brand-new mines. And we'll keep you up-to-date during the year. Thanks for joining.

Thank you very much. Operator, you may now close the conference call.

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