Thank you for standing by. This is the conference operator. Welcome to the Equinox Gold Second Quarter 2022 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. [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, operator and thank you everybody for joining us today for the Q2 conference call. We will of course be making a number of forward-looking statements today, so please do visit our website, SEDAR and EDGAR to read the rest of our continuous disclosure documents. I'm now going to turn the call over to our Chairman, Ross Beaty, to make some opening remarks.

Thank you, Rhylin, and good morning ladies and gentlemen. I don't usually get involved in these quarterly calls but this particular one is important. I think I'm going to talk a little bit about the CEO transition and a little bit of the background of that. Obviously, it was a poor quarter. And I just want to make a couple of editorial comments here to all investors whether they're short-term investors or medium-term or long-term. If you are short term, I want to point out that our Q3 and Q4 of this year should be much better than our first two quarters. We signaled that at the beginning of the year and we expect that to happen again just like it did last year where we had a blowout quarter in Q4 last year. So, short-term things should be much better as the year progresses. If you're a mid-term investor, I would like you to focus on our growth. Obviously, Greenstone is the biggest growth project we have that will add a couple of hundred thousand ounces at least to our gold production profile in the next couple of years, but we also have a dramatic growth potential at Los Filos in Mexico, Aurizona in Brazil, Castle Mountain Phase 2 in United States and, of course, our new Santa Luz mine in Brazil. Tremendous amount of growth, I think, we probably leave the entire sector in terms of growth of our production profile and our decrease in cash, cash cost profile. And if you're a long-term investor like me, you should be looking to simply on a company that has been built into one of the world's major gold producers. This will provide a sustainable business over the long term, it will be low cost and it will be a…

Thanks, Ross. And if you'll bear with me, I just want to add a couple of comments to what Ross has said, it's obviously a very emotional decision for me. As Ross said, I was here when we founded this with Greg and Ross and a lot of the team around the table with me today and I'm very proud of what we've achieved so far and I know the journey isn't done and as Ross said, this is well on its way to becoming 1 million ounce producer and the plans are all in place. And I'm also excited about the new opportunities that are going to come my way, but I'm also very pleased with the succession and transition plan that we have in place and I think it will be very orderly as Greg steps in. I have the utmost respect for him and the team and I think you'll see very little change as we move forward. And I want to thank all of them for their hard work, it's been an exceptional six years and also I want to say a very special thanks to Ross and his support in the Board over those years too. It's easy to say you're going to build the company and focus on growth and it's really hard to do and execute. And I think this team has done a wonderful job in that sense. And there has been bumps along the road, but as Ross said, the pathway is clear towards and have 1 million ounces, and that will be achieved. So, it'd be exciting to be watching Greenstone progress along with all the other projects. You can't find that kind of growth as Ross said in many companies around the sector and I'm keen also to make…

Thanks, Christian. We are poised for growth. Our balance sheet is also poised to sustain that growth. A week ago, we announced that we have amended our credit facility to increase the revolving portion from $400 million to $700 million. As part of amending that facility, we also rolled our term loan, which had about $73 million left in principle into that revolving credit facility. The advantage there of course is that it postpones the principal payments that otherwise would have come do what we're trying to build Greenstone and pushes them out beyond the time when Greenstone will be completed in construction. We also added $100 million accordion feature. It is uncommitted, which means we do need to go to the banks to ask for more, but we're happy that we have that available. We extended the maturity of the credit facility out until mid-2026 with a one-year extension feature, and of course that pushes it out beyond again our capital commitments that we have for Greenstone and we did all that while lowering the cost of capital, which we're happy about. We've reduced overall the borrowing cost by about 25 to 50 basis points on average for that. And we want to thank our leads, Scotia, BMO and ING, who helped us put together the amended facility and as well our entire banking syndicate for their strong support that they've shown to the company to date, and as we move forward. I'll mention that we drew $100 million of the revolver in July. So we've got $473 million drawn today, but what this has been overall as we look forward? We've strengthened our balance sheet. Christian mentioned some of the corporate items that we did and selling Mercedes and selling some Solaris shares. But with our existing cash…

Thanks, Pete. So Pete's gone through a lot of the items I would have covered, but I'll reemphasize it is tough quarter. We had signaled lower production in the first half and the very unexpected impacts have hit us principally at RDM in Santa Luz with a weaker production at Aurizona and Los Filos, but let's start off with the USA and I would say the best mine in the Group for the quarter, Mesquite has done really well in Q2 and Q3. They're benefiting from the stripping that was done principally in Q1 that provided access to the Brownie ore body and we've now started stripping while we're still mining from Brownie ore body. We've started the stripping for the next phase of mining in the Vista East that will provide ore as we come into 2023. Overall, mining and processing at Mesquite are ahead of plan and about 60% of the gold production should come from Mesquite in the second half of the year. As was noted earlier in July just into Q3, we celebrated the five million ounce being poured at Mesquite and also safety milestones and at that point, we reported 3 million hours lost time incident free. So, a really good quarter for Mesquite. Moving over to Castle Mountain, the crusher and conveyor are now in place that's been coming for a while as we needed to make a change away from run of mine ore go into leach pads. We've now seen improvement in the permeability and the overall flows have increased. We'll be watching this quarter as the leaching of the new sales happen. We'll be looking for faster leach times and improved recoveries overall. With faster leach times, we also hope to be able to put a larger area under leach with…

Yes. Thanks, Doug. And just on the last couple of slides here, I just want to reemphasize the current position and say thanks to Peter, Seb, Susan and their teams on an excellent job in getting the balance sheet matured and refinanced and thanks again to the support of our lenders who continue to support us from early days right through to now is being at mid-tier to a larger gold mining company and it's great to see the balance sheet maturing. And as Greenstone construction progresses under the derisk, the balance sheet cash flow investments portfolio put us in a strong position to continue to fund that and achieve all of our development goals over the next couple of years. And on the last slide, I just want to make a couple of closing comments and then I just want to say I'm proud of what we've accomplished so far and very excited to watch as Equinox, Ross, Greg and the team take the next steps towards becoming a 1 million ounce producer. We're only part way down the road, but I'm very confident the team on achieving that over the next couple of years. The scale of the diversity of the growth looking at the four countries we're in are very exciting and what we always set out to achieve, and it's really the credit to a strong team and all the hard work done to date. And I want to thank the teams, thank shareholders for your support. It's not easy always to back the growth-oriented company in a part of a cycle where people aren't valuing growth but will in due course. The Board and Ross have been extremely supportive and other stakeholders on the ground across all these countries. It's one of the hardest decisions I ever had to make in my life, but I'm super excited about being a supportive shareholder and cheerleader and supporting Equinox from the sidelines as we move forward here. And I'll miss Equinox desperately, but I'm also really excited to make a small difference in the carbon finance space as I move forward. I'll be CEO here at Equinox until the end of August. So, I'm not going anywhere too quickly and Greg will transition in at the end of the month. And so, please feel free to reach out, I'm here, I'm available and happy to chat and excited to pass on the reins and the keys as we move forward. So, I just want to close personally by saying thank you to all of you in this journey so far.

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

[Operator Instructions] We will pause for a moment as callers join the queue.

Thank you. While we wait for the phone callers, I'll take a question from online from a shareholder in Europe. So as always, questions about costs. So once you get into the higher grade ore at Los Filos in Q4, what do you expect for the all in sustaining cost profile there?

Yes. I can jump in there. We expect in the last part of the year that obviously Guadalupe will continue on with sort of close to 1-gram material, and I know the underground will start contributing sort of 3- to 3.5-gram material, which will allow us to bring those costs down into that 1300 to 1400 range, I think for the fourth quarter, which is a much more respectable level than obviously the last couple of quarters.

And with the change in mine center RDM, do you have a sense of what the cost will be there?

In terms of RDM, it will run at a higher cost with that lower grades for now. Doug, I don't know if you wanted to add something.

Also as we get through Q3, we'll be finishing off the current TSF but we have TSF raise. We have already submitted for the next TSF raise, so we want to get that done, so all the TSF raises will be done, implementing the vacuum cycle of the tailings. It will be another cost that will come into the second half of the year. So, those costs will elevate things but they're not ongoing costs and the one off of doing those and at the same time processing the half-dry material will be obviously our cost will be up, but it's all about staying -- maintaining status quo while we pump up the pits as well.

And it's probably worth in the same vein Castle Mountain bore the burden of actually building all of leach pad 1B in the first half of the year. So give or take $600 an ounce of sustaining capital built into that cost and you'll see in the second half of the year that drops off and you're $600 lower on average, which will put that into a very respectable range for the all-in costs in the second half of the year at Castle going forward.

I would just add one more point on RDM that with the reduction in the total amount of ounces that it will be producing, those cost increases on a pronounced basis will of course increase the profile there quite a bit. But the general impact on the company will be lowered because the overall production profile is quite a bit lower.

I'll ask this question with the caveat that it's obviously a forward-looking statements on a forward-looking response, but sort of going into next year, we've got a couple of years now while we wait for Greenstone to come in production, which will obviously significantly lower the cost with that size of production, but what do you see from the mines over the next couple of years?

Well, we've heard obviously work being done at all the mines on cost reductions. We've seen evidence of that already in some of the mines with Mesquite and Fazenda. Some of the investments we've been doing will drive us towards lower costs. For example, Castle Mountain coming off of the pad expansion and putting in the crush and agglomeration, we expect that should bring down our all-in sustaining costs. The other mines are actively working on plans, which includes repurchasing but also cost reductions overall, so it is an active part where they're proactively working on that. It's been happening for a while though, just takes a while to put into effect.

All right. Operator, can you please take the call from the phone.

Yes. We have a question from Anita Soni from CIBC World Markets. Please go ahead.

Good morning, thanks for taking my questions. So first one I think is related to C1. So first off to some purely mechanical question, 45,000 to 55,000 ounces. Is that including commercial and non-commercial production? And then secondly, your cash costs would that just be the commercial production alone?

Yes. So for Santa Luz, the 45 to 55 is the whole year. The cost guidance that we provided is just for once it's in operation. So, as Doug mentioned, we expect that to be later in Q3, so the costs that we have there for effectively Q4 and a little bit in Q3.

Okay. Second question is a little bit more big picture, I think I've asked a few times, but just wondering if you're thinking about whether or not all of the assets that you have, would you consider asset sales? I mean, I think I look at this and I think for the amount of production you have, it's a significant number of assets and perhaps your spread a little too thin.

Yes, I mean I need all take that. I mean, I think we've shown that we're willing to actually divest of either non-core or smaller assets and I certainly think the smaller end of the scale, we will have to be open to that kind of thing and we have done that, demonstrated that over the last couple of years with certainly the Mercedes sale and a couple of other asset spinout. So I think we've been open to that at the lower end of the portfolio.

And could you identify which assets perhaps that may fit into that portfolio? I mean, I would think RDM and Castle Mountain don't seem to be bringing the size number that I would expect.

Yes. So, RDM is the smallest obviously in the portfolio. That's a fair comment, but Castle Mountain will be a 220,000-ounce producer in a few years and the permitting is going well there. So we see that as a core long-term asset.

Okay. I will ask one more question and leave it to someone else to ask. So I wanted to be put back even more, so I think I've asked a couple of times as well on this one. The Life of Mine Technical Report that was put out by the prior operator in December I think of 2021. Some of the unit costs are coming in significantly below what we've seen benchmarked now for our de tour operation for Agnico-Eagle as they put out their new Life of Mine update and Cote, both of which are operations that are operating in Ontario. So, pretty good benchmarks. I'm just wondering when do you think you're going to address your unit cost because as we push towards making sure that the capex number is correct and building this, I think we need to keep an eye -- I mean as investors or analysts, I'm trying to keep an eye on what exactly you are building at the end of it.

Yes. Certainly, they need updating as we move forward here. And as the operating team gets built up I think in 2023, we'll be updating those cost. But clearly with the inflation that's ongoing, we expect them to be higher than the exact number $650 an ounce approximately all in sustaining cost. We expect it to still be a very, very attractive level, but it will be higher due to the inflation, for sure, but as the operating team comes in, they will build up from a ground up zero based budget next year.

Okay, that's it, thank you for taking my call.

The next question is from Wayne Lam from RBC. Please go ahead.

Hi, good morning guys.

Hi.

I was just wondering if you might be able to give us some detail on the covenants for the extended facility. And then, just curious when negotiating the increase in size, was there any assumption made on the conversion of the converts and is the intention to fully draw down on the facility for construction?

So on the first question on the covenants, they were updated to reflect that our previous facility didn't contemplate capital debt market issuances. The facility was updated to have both total and net total, net senior debt covenants and they were loosened from what we had before. So obviously, we're quite pleased with that. On your second question on the, I think you referring to them a bottle to converts that we have. We have two of them, one of the maturing in 2024 and the other in 2025. They were not contemplated as part of it. So, there have been no changes or amendments. Otherwise obviously, you would have announced it to those converts. And on the third question, do we plan fully drawing down on it? Generally speaking, no. We do not. We see it as a back up to our ongoing funding through cash flow and other means.

Okay, great. Was there anything specific on that you will be able to provide on, say, the interest coverage ratios or anything of that?

Yes, we're four times on our total net and 2.5 times on our net senior covenant.

Okay, great. And then, just wanted at Mesquite, can you provide some detail on the mine plan changes? I'm just wondering how the change in the deferred strip near-term might impact the ability to sustain the production profile in future years and extend the mine life there.

So, I'm not exactly sure what you're asking. But I'll elaborate on the Mesquite. So, we were stripping in Q1 for Brownie. We're mining ore in the same place before Brownie. We did a modification to our mine plan, which has allowed us to start our stripping with these pits earlier than originally intended, which means that we can look forward towards providing that more with these pits as we go into 2023. Beyond that, we are continuing to do drilling and we've been doing, I've got Scott Heffernan here with me. He leads the exploration team. We've been doing $6 million or $7 million of drilling every year at Mesquite for the last several years. Every year is about adding and replacing and updating models, so it is a constant effort at Mesquite. And we basically go straight from exploration into the hands of the operations team and they turn it into an updated mine plan as we roll forward with it. So it is, I'd say fairly dynamic given that it's been a short life since the operation was acquired and been maintained at the same life all the way along. So we look to be able to the pump it out several years, but it is tough to do enough drilling to be able to do that in one fell swoop. Scott, do you want to add to this?

You covered it pretty well given that the asset is here. When we bought it in 2018 and had a three-year mine life on it, four years later, we're working on a significant resource reserve update. The challenges that each of these deposits, there is a big stripping campaign before you get into mineralization and ore. And so it's a sequencing thing and trying to balance this between Brownie and Rainbow vista deposits and so forth and so it's an ongoing exercise due to pit economics alter the sequencing and so forth. We're very much at important part of work at an updating tech report now it will come out to in Q3 detailing fully updated complete picture drilling results so far this, over the last two years and we're quite excited about it. Lot of work to be done quite over the next couple of months.

Okay, got it. And then maybe just last one for me. I'm just curious in terms of Greg's role with the Company. How is that going to coincide with his leadership with the Sandbox team? And then should we see this more as an interim role or is it more of a permanent position going forward? And how will time be split between the two?

I think a good analogy at least to start us to think about it, the way we did with Solaris. Greg, he was President of this company and very involved in it and he also spearheaded that into a successful sort of spinning out ultimately and becoming his own company with his own life. And that's how we see Sandbox going over time here as well. At the moment actually, there is a bit of a team there that is helping manage the day to day. So it's actually well advance beyond where we were with Solaris. We first spun it out, probably learned a few things. And that's been out and this one is more advanced in a sense, so there will be a period of time, certainly he'll be managing that and helping it through.

Okay, perfect. Thanks for answering my questions. And Christian, wish you best of luck in your next endeavor.

Thank you very much, Wayne.

The next question is from Kerry Smith from Haywood Securities. Please go ahead.

Great. Thanks, operator. Doug, can you talk a bit about RDM. I'm not clear on how the mine plan would evolve here? If in next 18 months, you're going to be dewatering the pit, you can get it basically dewatered to be able to get back in there and get to the ore for the higher grade ore, and then also completing the stockpile loss. So you're not going to be mining any fresh ore. What happens after you complete that process. This sounds to me like you would still have a pretty big pre-strip, so what will happen, when is the last day that you could actually start that pre-strip to make sure that you had uninterrupted ore for the plant?

So, just to clarify, we were already in the midst of stripping program. So, the stripping program would have been an investment, would have been a negative through the year for RDM when we were hit with the two stoppages obviously in the first half of the year were quite negative. We looked at the remainder of the year and given that we are pumping out of the open pit that means that on the bottom of the open pit where we do have access to the in situ ore doesn't really occur until we get into Q4. So, we knew the process plant was available for operation. We decided to start working with some of the half-gram material that we knew we had on the dumps available or stockpiles available. And we have enough for about two years of production of half-gram stockpile material. So, that is the short-term plan, while we worked through and overall approach to how we would look at strategically being able to transition back from doing stockpiles to resuming the stripping program and resuming full operations. So, I'm really only elaborating on what we're looking at for the remainder of this year, while we are still investing in the TSF raise and then the next TSF raise and the vacuum cycle and tailings and then the processing of the stockpiles, but we are working on the overall long-term plan as well.

It allows the mine to be roughly cash neutral during the next few years, where we're building Greenstone and the investment could happen after that.

Though we will still have to do a strip program.

Yes.

Right. I understand that. So as I understand the dewatering would be done by the end of this year, the raise on --

Well, it should be done by, I believe, it's early Q4.

Okay. Early Q4. And when does the raise finish on the dam?

Late Q3 for the current raise. But already, we did the initial. As soon as we achieved the required free board on the TSF, we resumed operation of the plant. So we will finish off the rest of the current rates and we've already been in permitting for the next raise, which we will immediately do rather than waiting and then the vacuum cycle and tailing. Essentially what it does is it optimizes the volume of material going in. So we're putting in less water, more tails and it gives us more bang for our buck in the test. It's something that we're looking at all the mines that have TSFs.

And the second TSF raise, would that be the last raise you would need for the current reserves?

That would be the last raise that we're permitted for the current TSF. Our approach would be to no longer look at permitting a conventional TSF. We would look at doing thickened and vacuum tails to a dry stack facility instead of doing TSFs.

Right.

TSFs have become more and more onerous to be permitted, especially in [indiscernible].

Right. Okay. So when is the last sort of quarter that you would need to start pre-strip than to dovetail into the key areas of ore that you've got remaining in the stockpile, Doug?

Putting it another way, are you asking how long can we process stockpiles before we need to be resuming stripping? It's over two years from now if we chose to do stockpile.

That's going the other way. How long will it take to do the pre-stripping to give you access to ore before the two years of stockpile material runs out?

The stripping does give access to ore but it doesn't, it's still a net negative. So why wouldn't stripping campaign that does give access to ore, but it allows us to be able to get the benefit. Let's say, essentially the stripping campaign that we interrupted would go for another year.

Okay. So the plan is that free shipping finished before the stockpile ore runs out and you're planning to run two years of stockpiled ore and then you'd milling fresh ore?

That is the re-planning exercise. It's currently underway, and we're looking at what the optimal way to do it and what our options are to be able to run as long as we need to mitigate cash outflow, keep it as cash neutral as possible and resume at the right time.

All right. Okay. And can you remind me what the targeted recovery is for leach for the resin circuit?

Santa Luz, our target with the optimal blend was 84%. We've gotten up to 82%. We're still working on trying to get it up to 84. We may temper our expectations at the end of the day. It is scaled up from the pilot plant to the industrial scale. We do find it a challenge to get quite as high as we originally planned, but we're not done yet, we have to do all the fixes and then stabilize the plant at the same time with full throughput.

Okay. And with the share price, Company has been probably one of the worst performers in the sector. Has there been any insider buying lately?

Personally, yes. And I bought some in the summer, earlier just before the summer.

Yes, I know. bunch of the spot sort of back when it was around 7.50 thinking that was the low. I can get back to you on that, Kerry. I get sort of like quarterly updates from my Corporate Secretary, but I haven't had anything recently.

And there was a bunch of buying around 7 and 6 bucks, I know that.

Yes.

For sure.

Right. Okay.

And there is already a carrying for many as Christian mentioned, many of us around the table have been around since the very beginning. There is already a very high level of insider ownership, especially compared to our peers. We probably compared to our peers have the highest level of insider ownership. So...

And at the beginning of the year, we implemented an employee share purchase plan where we can buy shares as well on an ongoing basis and that is now implemented, I believe, 81% of corporate staff are doing it --

Great. Thank you. The next question is from Mike Parkin from National Bank. Please go ahead.

Hi guys. Can you just comment on the equity portfolio? Are you seeing that as a potential source of capital to fund Brimstone or is it more on a long-term holding?

Yes. I mean, the equity portfolio consists of everything from Solaris to i-80s to Bear Creek to Pilar to Sandbox. I think, there might even be more in there, but a whole bunch of names obviously and we've been supportive shareholders and spinning out a number of those companies along the way and they are, as Pete, I think, described part of the levers that are available if need be. They're not necessarily going to be our primary, certainly if their gold companies are primary source of funds but there, if need be, I mean, for most of them are not core holdings. They'd come from spinning out or selling the company, but we're also supportive as well.

Okay, and then we heard from [indiscernible] this morning having an impact on their projects with respect to crane operators in the second quarter? Do you guys experience that as well at Greenstone?

Yes, we did experience the crane operators and carpenters going on strike. We had a recovery plan that made up the difference. I think the crane operators affected us more, but that's well behind us. We did double up on ships and made other adjustments. We were a matter of a couple of weeks delay the recovery was in the order of $2 million to $3 million to be able to make it all back up.

Raw material?

Yes.

Thanks and then just on...

…addressing it.

On the Greenstone contingency budget, can we get an update on I think it was around $175 million? Are you proportionately through that as you are as percent complete? Or is that tracking at a greater rate than the percent completion of the project?

Yes, that overall contingency which we increasingly we put out their original budgets for $180 million and probably not a bad way to think of it is, it's kind of proportionately being used up and allocated as we move through and we're also finding offsetting areas such as leasing and other areas of financing of small things, like some of the infrastructure is actually going to be handled by the local municipality or the First Nations in that. So between the contingency in that, we're actually tracking nicely and we are expecting to use it as we move through and that's what it's there for and certainly with this inflation, we are tracking roughly in line, I think, with the project…

Okay, that's it from me guys.

Thanks, Mike.

All right, thank you. We're over the hour. So I think we're going to wrap it up. Do you have any closing remarks, Christian?

I think I kind of made them earlier, but just again a big thank you to everyone, including all the analysts, all the shareholders, supporters and the team here. I really enjoyed it so far, and going to just love watching the ride as it goes forward and I'll be a supportive shareholder here too, so. Thank you again and that's it.

Thank you, Christian. Thank you everybody for joining us today. Operator, you can now conclude the call.

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