Equinox Gold Corp. (EQX) Q1 2023 Earnings Report, Transcript and Summary

Thank you for standing by. This is the conference operator. Welcome to the Equinox Gold First Quarter 2023 Results and Corporate Update. As a reminder, all participants are in a 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, Ariel. Thank you everybody for joining us this morning. We will, of course, be making a number of forward-looking statements today, so please do visit our continuous disclosure documents on our website on SEDAR and on EDGAR. I'm now going to turn the conference call over to our CEO, Greg Smith.

Thanks, Rhylin. Good morning, and thanks everyone for joining us today. On the call with me our COO, Doug Reddy; our CFO, Peter Hardie; our EVP of Exploration, Scott Heffernan; and our VP of Investor Relations, Rhylin Bailie, of course. For those new to the Company, Equinox Gold is a diversified America's focus gold producer. We have seven producing mines across Brazil, Mexico, and the United States. And we also have several growth projects, including our large scale Greenstone Goldmine in Ontario, which we are constructing now with our 40% joint venture partner Orion Mine Finance. Today we are discussing our 2023 first quarter financial and operating results. I'll start with a broad overview for the quarter and then turn the call over to Pete and Doug for more details. During the first quarter, we produced just under 123,000 ounces and sold just over 123,000 ounces of gold. Cash cost per ounce sold was 1,376 and all-in sustaining cost per ounce sold was 1,658. This was a good start to the year for us and we're on track to meet our 2023 production and cost guidance of 550,000 ounces to 625,000 ounces of gold with cash costs between 1,355 and 1,460 per ounce and all the sustaining costs between 1,575 and 1,695 per ounce. Over the course of the quarter construction at our Greenstone Mine continued to advance on time and on budget for First Gold Corp in the first half of 2024. I was there just a few weeks ago with a few of our directors and I can say that while the progress that Eric and his team have made over the course of the winter is impressive. At the end of the quarter we were 73% complete overall, construction was 65 complete or 65% complete, and the team is now primarily focused on mechanical, piping and electrical installations and preparing for commissioning and operational readiness. Just a quick word on Castle Mountain and Arizona, at Castle Mountain, we have now received acknowledgement of completeness of our permit amendment application from the state, county and federal regulators. So permitting will now start to advance through the formal environmental analysis and work on the environmental impact statement is expected to start later this year. At Arizona the feasibility study on the addition of an underground mine at Arizona is progressing well and we expect to have results ready for public release mid this year as well. On the corporate side, we did take some steps this quarter to fortify our financial position as we continue through the Greenstone build. These actions resulted in an unrestricted cash balance of 285 million at the end of the quarter. That's up 85 million from year end plus approximately 130 million available from our credit facility for a total of 415 million in available cash liquidity. People go into more detail on this later in the call. Finally, I am pleased to report we also continued our excellent safety record during the quarter with a continued reduction in our 12 month rolling total recordable injury rate. We also had good environmental performance during the quarter, and in February, we announced our greenhouse gas emissions reduction target of 25% by 2030, and that's as compared to a business as usual case. Details of that are laid out in our Climate Action Report, which is available on our website. Finally, actually shortly following this call, we will also publish our 2022 ESG report, which will be available on our website. This report is very detailed, has loads of information on all things ESG at Equinox and so I'd encourage everyone on this call to check that out. With that, I'd like to hand the call over to Peter Hardie to run through our financial results.

Thanks Greg. We're now on Slide 6 in the presentation. As to our financial highlights for the quarter, we received an average realized price of 1,895 per ounce on the sale of 123,000 ounces of gold generating 234 million in revenue. We had 172 million in operating expenses in Q1, which is similar to the 168 million of operating expenses from Q4 2022, but an increase compared to Q1 2022 is 152 million. The increase from Q1 last year is consistent with the inflation Equinox experienced in the first half of 2022. On a per unit basis, cash cost per ounce increased in Q1 2023 to 1,376 per ounce from 1,238 per ounce in Q1 2022 and all in sustaining cost per ounce increased to 1,658 per ounce from 1,578 in Q1 2022. Key consumables unit costs remain stable from Q4 to Q1 2023. From Q4, we saw small decreases in key consumable prices in Brazil, which were offset by small increases in consumable prices in Mexico and the USA. Fortunately, the flattening of key consumables costs on a per unit basis has been a consistent trend since early 2022. As Greg mentioned, our Q1 gold production and cost results have us on track for our 2023 guidance. Our EBITDA in Q1 was 65 million or 57 million on an adjusted basis, and we had net income of 17 million for basic earnings per share of $0.06 or $0.05 per share of fully diluted. On an adjusted basis, we had a loss of 8 million or $0.03 a share. The main adjusting items to income are the reversal of a $35 million gain on reclassifying our holdings in i-80 Gold from an investment in associate to marketable securities. This reclassification results from selling a portion of the i-80 holdings, which moved us to below 20% total ownership. In addition, there are adjustments of $13 million for unrealized gains on foreign exchange contracts and 15 million for our share of losses on investment and associate. Those are related to i-80 and we won't be incurring those going forward. Cash flow from operations before changes in non-cash working capital was $195 million or $0.63 per share included in that cash flow from operations is the receipt of 140 million from the gold prepay arrangement. If you back out those prepaid funds, Equinox generated 55 million in cash flow from operations or $0.18 a share. In terms of liquidity and capital position, we ended the quarter with $285 million of unrestricted cash and $127 million available to draw on our credit facility, giving us a total of 412 million of liquidity. Our cash position was enhanced with the gold prepay arrangement we announced in March for the 140 million, we received under the terms of that arrangement, which is recorded as deferred revenue. Equinox will deliver approximately 80,000 ounces of gold at equal monthly installments from October, 2024 to July, 2026, which represents less than 5% of forecasted production for that period. Deliveries start after Greenstone construction is complete and gold can come from any of the mines to satisfy the obligation. Deliveries will be credited at 2,170 per ounce of gold as it is delivered. And we note that for purposes of the debt covenant calculations, the pre-payable not receive deferred revenue treatment and will be included as debt. The prepay was led by ING with MBF and BMO participating, and we of course thank our lenders for the continuing meaningful support. During the quarter, we also bolstered cash by realizing total investment sales proceeds of 77 million with 53 million received on the sale of our remaining Solaris shares and the 24 million on the sale of the i-80 shares. Net debt decreased about 80 million from the end of December to 548 million at the end of March. The furthest strength the Company's financial position during Q1 and into early April, we put in place gold hedge callers. There are approximately 164,000 ounces hedged from Q2 2023 through the end of Q1 2024 with a floor price of 1,910 per ounce and significant upside participation up to a ceiling of over $2,100 an ounce, and that represents a little under 25% of our production through that period. Moving to Slide 7, what does that all mean for Greenstone funding? Based on construction progress at the beginning of Q2, Equinox's share of the remaining construction budget is about 260 million. We expect to fund this amount with our cash balance of $285 million, our ongoing operating cash flow and the undrawn revolving credit facility of $127 million. Additionally, the $100 million accordion feature remains in place on the revolving credit facility. With those and other sources of liquidity we're well funded to complete Greenstone construction. I should note also, as we stated previously, we paused the use of the at-the-market facility in January after drawing about 25 million from it. So there's $75 million remaining on the ATM that's available. And with that I will turn the presentation over to Doug for review of our operations.

Thanks, Pete. So we're on Slide 8. For the operations, all of the mines are working on continuous improvement programs that are focused on productivity improvements, consumable usage reduction and also procurement savings. Specifically looking at Mesquite during Q1, the focus was on stripping and the Brownie and the Vista East pits, and that will provide us or for the remainder of 2023. Due to the emphasis on stripping and Q1, we did have a relatively low number of new ounces that went onto the pad during that period. And yet, ounces were as planned for the quarter in part due to contributions that we got from re-leaching and side slope leaching of the pad in previously leached areas. We are continuing our expiration and permitting efforts looking for mine life extensions at Mesquite. At Castle Mountain, we were placing both run of mine and crushed and conglomerated or on the heat bleach pads. We had an increase in the overall tenant being placed over the prior quarter and we continue working on increasing the overall crusher throughput with the intent to put all of it through the crusher conglomeration system. We are advancing our permitting and met test work in support of Phase 2, and I'll mention some more of that later on. At Los Filos, we're currently mining in the Los Filos and the Guadalupe open pits as well as the Los Filos underground mine. We've had improved productivity with more tons being placed in the quarter and with higher grades coming from both open pits and underground mines. However, recovery was impacted for some of the ore coming from Guadalupe open pit. Some of the ore has a high copper grade, specifically copper oxides, and they are cyanide consumers, and they delay our overall gold recovery. So, we've now been separating that ore. We're using a higher cyanide dosage and we anticipate an extended leach cycle for the recovery of the gold from that or so. That's going to mean that the ounces from that ore will be dragged out over subsequent quarters. Also of note, we did suspend the Bermejal underground during the quarter and that was due to the prolonged development period and investment period and the lower productivity that we were getting out of the mine. We will develop the revised mine plan to be able to match the timing for restart so that that higher grade ore will be fed into the CIL plant. Turning to Slide 9. At Arizona, we had good mine production as we moved through the peak of the rainy season. Our contractor brought in additional trucks during the quarter. We also mobilized the second contractor so that we can catch up on the material movement as the rainy season begins to abate. The process plant maintained a higher throughput than planned, and we produce slightly higher than plan for the quarter overall. At Fazenda, the mine performed well with open pit mining, contributing higher grades and more tons than planned, which helped to offset lower production from the underground mine while we catch up on development headings and bring on additional scopes in the underground. Both through put and plant recoveries at Fazenda were above plan and the mine was ahead overall announces being produced, and I note our expiration work at Fazenda continues to provide good resource and reserve replacement as per each year we focus on doing that to extend the life of Fazenda, and expiration has also been following up on the Greenstone belt between Fazenda and Santa Luz. At RDM, we restarted the process plant in January 19 after a permitting delay, and we're doing owner mining with our own equipment, supplemented with a rental equipment fleet, and mining is ahead of prior quarters for both the ore waste movement. We're processing this combination of in situ ore plus supplemented by low grade dump material. Recoveries are almost 90%, which is a couple percent above plan, and the mine intends to catch up on full year production as projected for the year. The final TSF raise is in progress. In our current TSF, we're optimizing the volume that we have available by cyclone in the tailings, and we've entered into the permitting process for a filtered tailing storage facility at RDM. Moving on to Santa Luz, we had lower recoveries in January, but over 65% was being achieved in February and March as we kept the war blend steady and modifications were being completed on the detox system, which is critical to maintaining recoveries at Santa Luz. Recoveries are now over 68% in April, and we continued to work on process plant improvements for, with a plan for recoveries to be over 70% for the second half of the year. I do note the resin leach plant is achieving higher recoveries overall than what would've been possible with carbon leach processing. Moving on to Slide 10 and onto the development side, Greenstone, this will be one of the largest gold mines in Canada with $5.5 million ounces of reserves. Annual production for the first five years will be 400,000 ounces a year, 14-year life and first production coming in the first half of 2024. I just want to take a moment to acknowledge the focus on safety at all of our mines, but especially as a construction project at Greenstone. They've passed 3 million hours just after the quarter end with no lost time injuries so good that they keep the focus on safety. Moving on to Slide 11 and looking at the construction information. The project is on budget and on track. Overall, the project is 73% complete at the end of Q1. You can see the various other items for a construction procurement, concrete, structural steel. Capital spend is 65% complete and we have around 260 million remaining as our share of the spend on the project. Project progress is really good during the winter months as Greg stole some of my thunder and talked about how well things have been going. All of the buildings were enclosed and being heated by the end of the quarter. Ball mill installation -- excuse me, ball mill installation has commenced as per the schedule and as you can see in the photos, a lot of the buildings now provide us the ability to move inside. We have major installations underway, mechanical, electrical, piping being a focus. All major equipment is on site with the exception of the HPGR, which is on route to the site at the moment. And on the operations side, we started mining in Q3 last year with four trucks and one shovel. We moved to 24x7 operations in Q4, and by the end of Q1, we'd moved 6 million tons of material. We now have seven trucks on site and two shovels. And I note that we will be doing an analyst visit in September this year. So moving on to our other expansion projects. They include Castle Mountain Phase 2. We'll see an increase to over 45,000 tons a day going on to the leach pads and production of around 218,000 ounces a year for a 14 year life. As Greg noted, we submitted our permit application in March of 2022. We've had our notices of completeness from the permitting agencies, and we'll continue to work through the process and should see environmental assessment work happening during 2023. For Piaba underground at the Aurizona mine, we're working on the feasibility study that involves mining from both the underground at the same time as the open pits. The feasibility study should be wrapped up -- will be wrapped up by mid-year. We have permits for three portal locations. We will upon completion of the feasibility study, look at timing for an expiration ramp that would give us underground drill stations and the ability to mine on the ore and will be looking to assess geotechnical and hydrogeological parameters, and also it will ultimately serve as a production decline. At Fazenda, as noted, we are looking at construction of the CIO plant. We'll be making a decision on the construction once we're through the higher CapEx period for Greenstone, and we're also looking for doing work on our operational efficiencies and having continued stability with the local communities. With that, I'll hand it back to Greg.

Thanks, Doug. I think, that covers the quarter well. I should say, quite recently we did launch a new website on there. You can see a whole bunch of pictures of all of our sites, but also of the progress at Greenstone. As Doug said, we haven't had anybody at site since September last year. We'll do a site tour in September of this year. But in the meantime, the website has plenty of pictures if you can kind of track progress that way. I think I'll just make a final comment to thank the entire Equinox team here in Vancouver and at all of our sites who as always are working hard for all of our stakeholders, and of course, also for the continued support of our shareholders. I'll finish up there, and pass it back to Rhylin for Q&A.

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

Certainly. [Operator Instructions]

Thank you. While we queue up, I'll take a question from online. Can you give any further clarity on when you're going to pour first Gold at Greenstone?

Well, what we've been guiding to the market so far is that we'll pour gold in the first half of 2024, and that's the guidance we're going to maintain for now.

Can you please take some questions from the phone?

Certainly, our first question comes from Wayne Lam of RBC. Please go ahead.

Just want to ask on the progress or the results of the quantitative risk assessment at Greenstone. And just wanted to understand the rationale behind the recent hedging in the prepay? Is that kind of just showing up the balance sheet, as you guys look to wrap up construction, or is that based on some of the results from the risk assessment?

So, we started the QRA in April, so we're still working our way through it. We've got initial feedback, but we have to work through the whole thing. So it's the same thing that we did last year. It gives us a good whole view of the site and make sure that all of our progress is on track, that we've accounted for all of the materials and we'll make any adjustments going forward.

And then on your Wayne, it's Peter, on your question, on hedging and prepay, you hit the nail on the head. With respect to the -- and I'll refer to it as very short term hedging. Those hedges expire and or run through Q1 next year. It's to lock in probably we were opportunistic on two occasions, to take advantage of the Ford Gold curve. That was at the end of January and the beginning of April, where we locked in profits during our CapEx intensive period. And then, I would add, we still have meaningful exposure just under 25% that's hedged through that period. The ceiling is very high at 2,106, and of course we have full exposure on the unhedged, 75% that remains on the short term hedge. And then with respect to the prepay, yes, it's to add liquidity now during the CapEx period, again with a really high locked in forward rate at 2,170 an ounce throughout the delivery period. That's just under two years. And again, post greenstone startup.

Yes, Wayne, I think it also helps just to add some additional context. And if you go back to late October, early November, gold was 1,650. We're in the middle of very substantial capital build at Greenstone. We've taken a number of incremental measures just to make sure we've got as strong a balance sheet as possible as we move through that build. So, we've done a number of different things, which has included some hedging, the prepay, we sold some securities, we did tap our ATM, we worked with our lenders and relaxed our covenants. And all of that was designed to just decrease risk over the build period. So that was just one more part of an overall strategy to do that.

Yes, I agree. Looks like some prudent risk management. Maybe at Mesquite, I was just wondering if you might be able to discuss, the lower cash cost, quarter of a quarter. Is that in part related to the kind of optimization in moving to the smaller pits? And just wondering if that's sustainable relative to where the guidance was?

Well, yes, it is. It is specifically that. I mean, that's why we moved to the smaller pits at Mesquite and we continue to look at opportunities to be able to extend life overall. So, that is the approach there.

And then maybe just last one for me, just at Castle Mountain. On the permitting front, can you help us understand the impact of the designation of the national monument across that access road? And how does that impact the progress on timing in terms of the permitting for phase two?

It should have zero impact on the timing of permitting. And actually, if you go to the language of the proclamation for that national monument, it's very detailed in, I guess, exclusion from any restrictions on any existing right of ways whether it's roads, utilities power, other infrastructure that might be in the monument. So, that was obviously a key interest to us. And we're very, very pleased with the language that they ultimately used in the monument. We don't expect it to have any effect on permitting a castle mountain. And we were in very ongoing, I guess conversations with the regulators as that monument was being put into place. And not just us, there's lots of infrastructure on the Nevada side of the California Nevada border there, where that monument was put in. So, all in all, I think it was a good result for everybody and we're happy with the way that turned out.

Okay. Great. Congrats on a good quarter and thanks for taking my questions.

Thanks Wayne.

Our next question comes from Anita Soni of CIBC World Markets. Please go ahead.

Hi, good morning, Greg, Doug and Peter. So a few questions. Firstly, the inventories, they've been climbing for the last couple of quarters and I just wanted to understand some of the, how the inventories play into the costs. Am I correct to assume, cause I looked, read through the notes, correct to assume that it's a function of some of these higher costs -- higher unit costs will take some time to wind its way through, or is there something else at play there?

Anita, it's Peter. One of the main contributors to the increase in overall inventories at Los Filos where there was quite a bit of stacking activity, both in Q4 and Q1, with a longer recovery from inventory. So, those costs remain in inventory of course, until they come off and we sell the gold. But that's the biggest contributor to the increase in inventories.

Okay. So, it's been about 30 million per quarter for the last two quarters. So, that should come out over the, in the back half of the year. Like what's the leach cycle at Los Filos?

Normal leach cycle is 120 days. I mean, most of the gold comes out in the first 60 days, but 120 days. But for the higher copper or we're looking at 180 days, so a third cycle to get it all. So hence it tracks out.

So yes, if you're building that into your model, then yes, it's pushing it into kind of later Q2 and Q3.

All right. And then just an overall question in terms of, as we think about, the cost that you delivered this quarter and then increasing production over the course of the year that you had previously mentioned. Do you anticipate that the, that will have overall. I guess will cost be flat to this quarter? Will they be rising from this quarter? Would you expect them to decline?

I think it's fair to say we're not shooting for the high end of our cost guidance. We're shooting for the low end of our cost guidance. And as we -- traditionally at Equinox, just seasonality, Q1 is usually a lower production quarter for us. And we typically see increasing production quarter over quarter. We expect this year to be the same and along with that increasing production to have a corresponding decrease in cost.

Okay. That's my questions for accounting, but now can I move on to Greenstone? So just in terms of the deliverables, I think you had mentioned that, you know, when we had our mine tour, about nine months ago, that at the end of Q1 you would've been around 80%, 80% complete. And I do notice that in Q2 and Q3, you do have some pretty good productivity improvements, but according to the schedule right now, you're only supposed to deliver about, I guess a little over 10% in Q2. So, is it -- do you expect to make up the shortfall in the completion over Q2, Q3, or will that kind of push out into Q1 and Q2 into 2024?

No, it is exactly as you say that the intent is to catch up by, we were looking at Q2. I think coming through the winter. We're looking at Q3 for the catch up.

All right. And then a few specifics. So I guess you've got seven trucks at this point, is that correct?

So far operating, yes.

Yes. And then by the end of the year, you're supposed to have 18 that you need for operational readiness. Is that the case?

We have another 11 coming. I'd have to check the delivery dates, but it's all per our schedule, we've doubled down and checked to make sure we're going to achieve everything we need to do for material movement.

Sure. And then, just moving on to the TSF, just wanted to clarify, it is a downstream tailings facility, not a modified center line.

Downstream with awe do a cut-off wall, that's deep soil mixing and we're doing an abutment or embankment on the TSF as well, which is where a lot of our material goes to right now for the waste. It goes down onto the TSF.

And then the other deliverable that I was thinking about for this quarter, did the crushers get delivered yet?

Crushers you talking about high pressure grinding rolls or the crushers, crushers that crushers are there?

The crushers. Yes, it was listed as crushers in terms of what we've -- in our mind to our booklet from last September that the crushers should have been delivered.

Yes. Crushers are there.

Our next question comes from Arun Lamba of TD Securities. Please go ahead.

Just a couple quick ones on Greenstone, It's kind of largely been answered. But I guess first, can you just remind us when the timing of that independent study is going to come out? And I'm guessing it's before the site visit in September. And then just lastly, you mentioned, you mean all the buildings are enclosed equipment on site except the HPGR, in your view, it could be Greg or for anyone. What's the critical path item right now to kind of keep everything on schedule?

So, on the QRA assessment, we're in the mix of it right now. I think that'll be done probably sometime in May. And we can update the market probably in May or June, so long before the September site visit. And critical path has been the same since basically the start of construction, which is through the milling facility. So, really, east end of the process plant building, which getting it enclosed, which was done in Q1 was critical, starting the ball mill installation which has commenced on schedule. It remains critical path until we get through the commissioning of that because it is the core piece of equipment, but we've got the two mills being installed in parallel. Previously, they're scheduled for cereal, so that should be able to keep everything on track there.

And Arun, I think when we spoke in, I guess it was January, you asked me what kept me up at night at Greenstone and it's going really well. But the same thing I said then is the same thing I'll say now, which is we just have to maintain the productivity level of the contractors that are doing the mechanical electrical piping and installation at site. And that's a lot more challenging when the buildings aren't enclosed at this point. They're all enclosed. We're moving past winter at Greenstone now, and things are actually starting to move very quickly there. So, that's the main critical path, keeping that productivity up as we get the mill installed. But things are looking really good.

I just double-checked, crushers are on site and secondary crusher installation work is underway.

No, that's great. And then just quickly, just on the Sandbox potential up to 75 million, do you have an estimated time of proximal completion for that, or is it just kind of a bunch of variables? It's still kind of unknown?

Well, in the non-binding term sheet that we signed with Sandbox, it had an outside date of September of this year. And so the team at Sandbox is working on -- and Equinox is working on the final documentation, and then that would lead to Sandbox doing a financing and then closing that transaction. So right now, the outside date is September and that's the date that was in the term sheet.

Our next question comes from Mike Parkin of National Bank. Please go ahead.

Most of my questions have been the answer. Just can you give us a bit more color at Mesquite around the permit with respect to mining in the path forward there in terms of what you expect at the asset say, next year and the year beyond?

Well, the permitting for Mesquite relates to every time we do a drill program, we have to permit them. So, that always is in the queue, is to get every single drill program being able to be permitted. So it's a stepwise progression. We are looking at one of the areas where we would like to be able to mine that will involve some modifications to infrastructure. So, that's underway. And we also had applied for a pad height increase, which we recently got granted. So, there's always permitting modifications to be done on a relatively tight footprint and a very large mine.

So, it sounds like, it's fairly low risk of being an issue for 2024.

Well, yes. I essentially, I would say the key thing is looking through 2024 into 2025. I mean, we need to get all drill programs done that'd be able to support productions that goes from the end of 2024 into 2025.

And then just flipping back over to Greenstone, can you just give us an idea of where you are in staffing? Are you at peak contractor employment or is that still yet to come this year? And that could support an increased productivity in terms of like your monthly completion rates?

Well, we peaked through the summer but due to a combination of operations and construction personnel that was to be expected. And we've been through all the housing plans and everything and it'll be tight, but it's part of the plan.

And then in terms of like your, for your regular worker staffing, how is that going? You were kind of highlighting some wins in terms of looking to be kind of the employer of choice given a long mine life in the area. Is that still tracking nicely?

It's tracking nicely, but it's not without challenge. You know, we're the team at Greenstone's working hard to get everyone they need for the operation, and I know they're attending a lot of different employment shows and conferences and we're very actively hiring. And so if anyone is interested in the job at Greenstone, you can check our website or the Greenstone website, we'd love to hear from you. The biggest challenge is the more technical roles mill operators, electricians, heavy duty mechanics, those types of roles are certainly challenging. There's a lot of competition, but it is going well. And we're keen to talk to anyone who worked at Greenstone.

And our peak will be June for personnel on site. We're about 870 at the moment, but June peaks up just over about.

Okay. Looking forward to tracking the progress on that one. Thanks Greg.

It looks like we have one follow up question from Anita.

Our next question comes from Anita Soni of CIBC World Markets. Please go ahead.

Hi, thanks. I was just going to ask about the project CapEx spend. If I look you're on schedule in terms of the CapEx spend at around 65% at the end of this quarter. But given that you were a little bit behind on the actual progress, I guess as you try to catch up over the next couple of quarters on the progress, will that have any impact to the overall capital or the capital spend pattern over the next couple of quarters?

Yes, Anita, it's Peter. We don't believe it will.

Okay.

But.

And so could you provide some color on why it won't?

We believe within our budget overall contingency for those kinds of items that might be taking more hours than originally planned, that the contingency sufficient to satisfy an increase if necessary.

Okay. And how much of the contingency remains? I think when we were on the tour, I believe some of it had been used up already, but I don't really have an update on what the contingency was since then.

That is part of the QRA that we're going through right now. So I'm sorry. Again, just have to wait for us to finalize that work that we're doing.

Okay. And I just wanted to dig a little bit more on this, on the tailings dam. I guess what I'm trying to drive at is, you've got seven trucks right now. I think you were supposed to have about nine by the end of this quarter. And then to me the truck delivery is kind of critical to making sure that your TMF is built on time and available for when you start production. So could you give us a little bit of an, a timeline over the next six months, nine months, about when you're expecting the trucks and what needs to be done on the TMF to be in order to be ready for the first half of 2024?

Yes, the TMF is to be available for use as of the fourth quarter of this year. That doesn't change. I'd have to go back and check on actual truck numbers, but Darrol Deventer with our technical services team monitors what David Newhook on the operations side at Greenstone has for progress. I'll come back to you on that one.

Sure. I mean, in the technical report, it said it was nine by the end of this quarter and 18 by the end of next quarter, so, okay. Because obviously you've got to do a lot of moving of earth in Q2 and Q3, so you need those trucks.

Yes. We also modified the mining plan, which we had, we'd talked about last year that we went from, I think the original plan was about 41 million tons. We modified the plan for the first period to be about 30 million tons, which meant that we could push off some of the trucks and it had no impact overall for the first five years of operations. It just pushed some of the tons into the operating period.

And that was for the stripping, right? That was, so you've basically given yourself, I guess, 10 million tons of wiggle room on the?

Yes, yes. So, sorry, there's the disconnect for you. I can come back and check on the delivery times for it and then we'll come back with an answer for you.

Okay. Thank you.

It's a good point. And just kind of further to your point, we've actually put in orders in advance on the trucks that we need and shovels. So, we're very comfortable that we're going to have all the gear we need in the time that we need it as we've kind of accelerated the ordering of and made commitments on that gear.

Okay. We've got one question from online. Have you got all the permits that you need now at RDM?

Yes. With the exception of the permit for the filter tailing storage facility, we do have one permit which was for some additional low-grade dumps that we were looking at topping up our feet. We know that the permit's been issued. We're just waiting for the signed version of it to be delivered, but that we consider that to be in hand. So just filter tailing storage facility, which for us is a shift at RDM, and obviously is the way to go in Brazil. Because all mines are shifting towards filter tailing storage facilities for the future once they've finish their current designs.

Perfect. Thank you. Greg, do you have any closing remarks?

No, I think that sums it up well and as usual, I'll just say if anyone has any further questions, you can always reach out to Rhylin or myself via the website. All of our contact information is there. And thanks again for attending the call.

Perfect. Thanks 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.