Thank you for standing by. This is the conference operator. Welcome to the Equinox Gold Third Quarter 2023 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, Chris, and thank you, everybody, for joining us this morning to discuss our Q3 results. We will, of course, be making a number of forward-looking statements today. So please do visit our website and our continuous disclosure documents on SEDAR and EDGAR to learn more about the company. I will now pass the conference over to our CEO and President, Greg Smith.

Thanks, Rhylin, and good morning, and thanks, everyone, for joining the call today. On the line with me is our COO, Doug Reddy, our CFO, Peter Hardie; our EVP of Exploration, Scott Heffernan and of course, our VP of Investor Relations, Rhylin Bailie. Again, today, we're discussing Equinox Gold's 2023 third quarter financial and operating results and I'll just start with a broad overview for the quarter and then turn the call over to Pete and Doug for more details. So, this was a record quarter or a record third quarter for the company in terms of gold sales and revenue, with just over 148,000 ounces of gold sold at a realized gold price of $19.17 per ounce. Cash cost per ounce sold was $13.63 with all-in sustaining cost per ounce sold at $16.03. I would note that these costs do include our write-down of inventory at Los Filos, which totaled approximately $70 per ounce on a consolidated basis. For the first nine months of the year, we sold 409,000 ounces at a cash cost of $13.57 per ounce and all-in sustaining costs of $15.95 per ounce. These also take into account the inventory write-down at Los Filos. These results also reflect record sales for the company for the first nine months of the year, and we remain on track to meet our 2023 production and cost guidance. In September, we had a site visit to our Greenstone mine in Ontario that, included our analysts, our lenders and some of our shareholders. Just a reminder that Greenstone, is being developed as a joint venture in cooperation with our 40% joint venture partner, Orion Mine Finance. Again, the site shows very well, and it was a great opportunity for all the visitors to see the site and the progress in-person. All…

Thanks, Greg. Now on Slide 5 of the presentation. For Q3, for the 149,000 ounces sold, we received an average realized price of $19.17 per ounce generating $285 million in revenue. We had $201 million in operating expenses in the quarter, which is an increase, compared to the $193 million of operating expenses from Q2, an increase, compared to last year's quarter, which was $189 million. The increase is primarily due to the contribution of operating expense at Santa Luz and higher operating expenses at Aurizona and RDM as a result of higher production. With RDM achieving its highest quarterly gold production since Q4 of 2020, offset partially by lower operating expense at Mesquite as a result of lower production. On a per unit basis, our cash cost per ounce of $13.63 is consistent with the previous quarters of this year. Our all-in sustaining cost per ounce of Q3 is in line with Q1 and increased, as planned from Q2 thanks to additional sustaining spend at Aurizona on deferred stripping and tailings facility work, which is a typical Q3 activity at that operation. When compared to last year, cash cost per ounce decreased in Q3 - to $13.63, pardon me from $13.91 and all-in sustaining cost per ounce decreased to $16.30 from $17.51. One of the trends we've seen this year is the increase in leach pad inventories. We've seen a year-to-date increase of $130 million in those inventories related to an increase in ounces on the pads of Mesquite and Los Filos. For Mesquite, most of the increase occurred during Q3. At Los Filos, the increase occurred in the first half of the year. During Q3, at Los Filos, we saw an overall drawdown on pad ounces. Doug will speak - to leach pad dynamics during his review of…

Thanks, Pete. We're on Slide 7 in the presentation. At Mesquite, during Q3, the mine switched from waste stripping to ore movement and stacked 7.6 million tonnes on the leach pad. The strip ratio reduced from 2.0 in Q2 to 0.6 in Q3. Those stack down has begun to come under leach during the quarter. So, now we're waiting for them to start coming off the pad in Q4. Early in the quarter, they're actually in the end of Q2 and into start of Q3, there were issues with precipitation of a magnesium silicate and also low pH levels were caused by - releaching of some older areas of the pad. Both of those were addressed and resolved. During the quarter, the site has also been working on our plan to mine the Ginger deposit, which is a new zone that's next to the Brownie pit. So, we look forward to seeing how Ginger can come into our mine plan going forward. At Castle Mountain, crushing and agglomeration throughput continues to improve. We were at 67% of the ore being crushed before its being stacked. We continue to make up the difference with the run of mine ore, which does have a lower or slower percolation rate and a lower overall recovery. We are working on additional modifications to the crusher that will - we'll end up with improving ore throughput. Scaling on the drip lines on the leach pads, did occur at Castle Mountain in the quarter, and those have been addressed and resolved. At Los Filos, our productivity improvement program in the open pits and the underground mines has been underway from Q1 onwards. That program has seen a strong increase in the total tonnes being moved year-on-year and a reduction in dilution from the underground and at…

Yes. Thanks, Doug. Rhylin, why don't we move on to Q&A.

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

Certainly [Operator Instructions].

Sure. So I've got a couple of questions online, and we'll take one of those while we're waiting for people to queue up. First question here, why did the convertible notes now? Why not wait until the spring when the 2024 note was coming due?

Yes, I'll handle that one, Rhylin. So as you noted, in April 2024, we had $140 million convertible note that was maturing. And the company has been involved in a large capital program for the last 2 years in building Greenstone. And we did not want to be in a position just as we're in the heat of commissioning and ramping up Greenstone where we had to make $140 million debt payment. So we've been pretty clear in the past that we wanted to get ahead of that maturity, effectively refinance that note. And so we've been looking at a number of options to do that. Why now, why September in a large part because the market was cooperating. The terms were very attractive in the context of the note that was maturing. Again, much higher conversion price, lower interest rate, and of course, you get the extension of the term. And we were able to do it in market conditions that were favorable to the company at a period where we were able to then park those funds on a revolving credit facility and save a fairly material amount of interest, the delta in the interest between our revolver and the convertible note over the period of time between now and maturity of the April 2024 notes. So from our perspective, we have to control or focus on the things we can control. We don't know where the gold price is going to be, where the market is going to be in April 2024. And so to mitigate having to make that payment in cash, if those notes matured out of the money, we wanted to get well ahead of that, and that's why we executed on those notes in September.

Perfect. Thank you. Operator, can we go to the phone lines now, please?

Certainly, the first question comes from Wayne Lam with RBC. Please go ahead.

Yes. Thanks. Good morning, everyone. Just wondering maybe at Los Filos. Just wondering what the expected leach cycle is now for those delayed ounces beyond the 60 days. And I guess, given that it's been a couple of quarters now, should we be expecting a big catch-up announces coming off at in Q4?

So on - for example, the longest leach time is on the high copper ores. So that's a 120-day overall cycle. Yes. It's a longer drawdown of those ounces will go through Q3, probably into Q4 for those ounces. And we had hope that it will be quicker, and we all come out in Q4, but it's likely going to drag into 2024.

Okay. Great. And then just maybe related to that, it looks like the heap leach inventories have built up by quite a bit this year. What proportion of that number is related to Los Filos versus, say, Mesquite and Castle Mountain and at what point in time would you have to consider taking a bigger write-down on those inventories if they don't come off the pad, like would that come with impairment testing at year-end?

Yes, Wayne. So about 2/3 of the buildup is at Mesquite and most of the buildup at Mesquite occurred during Q3, which was frankly planned with the stacking activity and our budgets for the year. And I'll note that at Los Filos during the year, we saw a net drawdown overall of the ounces. So the ounces that we had expected a little earlier in the year. We have started to see those come through during the year. And as Doug just mentioned, we hope that, of course, that, that continues. It's just taking longer than we expected.

One of the things to note at Mesquite as we saw opportunities to optimize our mine plan a little bit, which meant a bit more stripping to get more ore, and that is up a little bit. So we knew it was a risk that some of the ounces would push into 2024, but you see the large number of tons that we've managed to stack in Q3, we were opportunistic and we took that opportunity to optimize the mine plan.

Yes. I guess a final note on the Mesquite stacking is it's typical of the operation where you do your big pushbacks followed by periods of stacking and then leaching and recovery.

Got it. And then maybe just last one at Greenstone. Can you give us a sense of timing of spend through the completion of the project into next year? And then how should we kind of think of CapEx into Q4, given the spend this quarter seems to be quite elevated and to date, it looks like it's pretty close to the full year guide.

Sure, Wayne, this is Greg speaking. So to your point, we've spent about $270 million of the $270 million of the $277 million that we planned for the year. For the most part, this is a timing issue. The overall budget in aggregate is still valid. What we're seeing at this stage is a fairly rapid deceleration in construction burn and that is everything from obviously, the installation of equipment, but also just a number of people on site is starting to drop fairly significantly. Most of the major work in terms of construction is coming to completion here, including the tailings facility, which we said Q4, but really, we're weeks away from that being entirely complete. So most of the big burn that we had through 2022, 2023 is now coming off pretty significantly. There's about $140 million at 100% left to spend. In total, 60% of that related to us, it should be about $85 million. I think for the rest of 2024, we're going to be in that sort of $30 million to $40 million range. And then obviously, we're moving into hot commissioning here in Q1 and as quick as we can to gold production. So we're - no change to the overall budget. Things are moving quite quickly at Greenstone. And like I said, the overall burn is now coming off quite significantly and really the spending is starting to orient more towards just mining.

Well great. Thanks. Thanks for taking my questions and best luck in the months ahead.

Thanks Wayne.

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

Well thanks everyone. Greg, does that $80 million to $85 million your share of the remaining CapEx, does that actually include the working capital buildup?

In terms of - ore like stockpiled ore and first fills and all that?

Yes.

Yes.

Okay. Okay. That's great. And are you having any issues for the operating side because I know you're adding equipment as we move into every quarter here going forward. Are you having any issues sourcing equipment from the suppliers or maybe any issues sourcing people as you build up your staffing levels or is all that kind of running in line with what you expected?

Yes. So on the equipment side, no, because everything had been previously acquired. So we haven't had any issues around that or certainly not at this stage in the game. In terms of hiring, things have accelerated quite significantly. We're working towards having, I think, around 360 people on site by year-end. We're at about 300 now, and that will continue to increase. And I'm talking about the operating team, which will get us to sort of 550 at some point next year. The number of people on site in terms of construction is coming off, as I said, quite rapidly. We went from over 800 people just a few weeks ago. That's now dropped to sort of 500 and continuing to drop.

Okay. And can you remind me what the peak employee levels are once the operation is running if you're [indiscernible]

About 550.

Okay. Okay. And just for Miski with this buildup of inventory, do you have even a directional comment on the production in Q4 from Mesquite that you would expect? I mean, do you think it's going to be 10% better than Q3? I'm just thinking about how we kind of model this?

Yes. No, I hear you Kerry. And it's -- we've actually stacked a lot more ounces and recoverable ounces in the year than we budgeted. But we did it a bit later, as Doug mentioned, because we extended the stripping program. And we've seen this in the past with Mesquite where the recovery starts to incrementally increase and all of a sudden, it starts to really increase and sort of reach the levels that we anticipate. And so it's one of these situations where we're totally comfortable reiterating our guidance. We're going to be within our guidance for the year. Whether we're in the back end of that guidance or closer to the midpoint of that guidance, that could be a matter of a couple of weeks at Mesquite just based on the every of those ounces. So we're sort of in the same position as you. We anticipate those ounces starting to accelerate significantly over the course of the quarter, which we've seen every year that we're mining Mesquite, but the exact timing right around that year-end time will -- could have some effect on the overall production for the year. It obviously will.

Okay.

Remember, a large number of tonnes [ Dell ] doesn't come under leach at the same time. We had to finish lead cycles on other areas as it was coming on. And then you've got your normal lease cycle, plus it's a very high pad, the pad height means that the percolation takes quite a while to work its way through. So all that combined, and we've done lots of discussions and analysis on that. It means that any day now. That's it through Q4.

Kerry, the Mesquite -- like it's a good story at Mesquite. We had very positive reconciliation in the pit this year. And so we've had a lot more recoverable ounces available to mine put on the pad. We also are, as Doug mentioned, integrating this new Ginger deposit, working on mine plans that are going to extend mining at Mesquite into 2026. So we're very happy with what's happening in Mesquite. The timing of recovery of these ounces. Again, it's -- we're talking about a difference of a couple of weeks right around that year-end that could affect 2023 production, but still we'll be well within our guidance.

Okay. Okay. And then just one last question for Doug on Santa Luz is, I know when you started the resin project, you were kind of thinking recoveries in the [ louis ] despite a 70% maybe the best that we can ever hope to expect for this project? Or how are you thinking about it now?

We have -- I mean, obviously, the team at site is very, very optimistic on the additional modifications that they're doing. We have to do it in a stepwise fashion, so we can understand what works and what doesn't. I'd say desliming is the big one that should have a step change for us on recovery, and we're doing the engineering at the moment, and we look to be able to implement that in 2024. We're looking at around the mid-70s, around 75% as being a realistic target that we should be able to push up to, but it's incremental. And what I will say is 84%, the original target is not doable. We will acknowledge that scaling up from bench scale to pilot plant to industrial scale just did not follow through on the overall recovery, but we can see getting to the mid-70s. And blending has been a big item for us. And obviously, the opportunity to be able to bring in and blend down the TOC is another thing we're looking at long term, but it takes quite a while to be able to develop other areas that we might be able to blend with the ore to be able to bring down the total organic, the TOC levels in the past.

Yes. And Kerry, we'll have -- we expect to have more on the addition of that desliming circuit, how that will -- when we can expect that stepwise change in recovery, thanks to that circuit as part of our year-end call next time we chat on results and which will probably involve guidance as well.

Okay. And is it the desliming that you think could get you to the mid-30s recovery range? Or is it so that -- and then there are some other step change opportunities that you would have to look at, but they have to be done and seek what you're suggesting?

Exactly. Yes. So I mean basically desliming would bring us up to rather around 73% and then continued work on a couple of other areas would give us another couple of percent. So hence why I'm saying around 75%? Site is going to stay focused on 73% for now. But I think long-term, we're going to continue working on it. So it's a long-term target.

Okay. Okay. Yes. Thanks very much guys.

Quick question from online. What are you thinking for timing of the Castle Mountain permit?

Yes, that's a tough one. We've submitted the permit in March 2022. And we did have a fairly rapid engagement from the state and the county. The BLM, the federal authorities have been a little slower. If you'd asked me sort of a year ago, I would have said we should have that permit sometime near the end of 2024. I think it's more likely at this stage, just given the progress sort of later 2025, give or take, so it's a hard question to answer specifically. The permitting or the process is going well. There's no drama. There's no significant issues, but it has been slower than we anticipated.

And I guess with Q4, halfway through, people are already starting to think about next year. So I've got about 5 questions about sustaining capital spend next year and cost next year in Greenstone cost, you did want to remind people about when guidance...

Yes. We'll be issuing our 2024 guidance in connection with our year-end results, which will be sometime in February, maybe late February.

Which is typically when we do release our guidance in the second half of February.

Okay. We'll take questions from the phone, please.

The next question comes from John Sclodnick with Desjardins. Please go ahead.

Yes. Thanks for taking my questions, guys. Just looking at the covenants for the revolver and the credit facility there. It looked like the coverage ratio was 4.1% in Q3, just wondering if you see this remaining tight moving forward, obviously, it depends on the gold price and production, but just kind of wondering how you're thinking about it internally and managing that?

Yes. As we mentioned on previous calls, we worked with our lenders to loosen covenants during the construction phase of Greenstone. We do expect them to remain tight until construction is complete, but we're very comfortably on side with our covenants.

Okay. Perfect. Yes. I appreciate that. Just in reference to Doug's comments on removing some of that higher carbon material from Santa Luz. What kind of grade is associated with that? And just really, is this going to impact the head grade in any material way.

So you're asking what the mass pool is of the carbon material?

Yes. And really, if that change in your planning there, removing that the higher carbon material, if that's going to impact your planned head grade?

No. So I mean, I'd have to double check. I believe the math pool that we're looking at is 10% to 20% but the gold that's lost there is tied up intrinsically with the carbon. So what we're removing is the most refractory as it were material, and we're allowing the remaining mass to be able to be properly leached. So we've done test work on it, worked quite well, gave us a good bump depends on the TOC of the material that goes in on how much of a bump you get. So the grade is about 1.3 grams that ends up getting lost, but that's okay because that gold wasn't coming anyway and it gives us a pump on the remaining material.

Perfect. Yes. that makes sense. Yes. No, definitely. I know it's different when you're actually operating versus working a spreadsheet, but I appreciate that color. No, fair enough. Just -- I mean, obviously, balance sheet looks like it's in good shape for the cash yet through the rest of the Greenstone build. Just curious how you're thinking about divestitures at this point at one point in the past or is a bit of a discussion on maybe divesting a smaller asset there. Just curious your thoughts at this point.

Yes. I mean we've always said that we're commercial, and we've sold mines in the past, old assets in the past when it's made sense and when there's been a reasonable offer on the table. So we're -- I'd say we're always open-minded. I never want to comment on any specific mines. I would say that it's a pretty challenging environment to try to sell assets. There's not a lot of -- especially if you're looking for cash, there's not a lot of financing out there. Interest rates are high. You got a high gold price, but with equity values depressed and high interest rates and just sort of tight conditions, it's just not the best time to try to sell assets. Even on some of our smaller operations, where we've really been focused is looking at mine plans where we can sort of optimize our cash flow and optimize value. So we do get comments on having some of these smaller assets. But to the extent that we can mine them for more value than we can sell them, which I think right now is absolutely the case. That's going to be the focus. Not to say we wouldn't be commercial, John, but this is just a tough environment to look at those types of transactions.

Yes. No, I appreciate that. And also I know public form questions on M&A are every CEO's favorite question to get. So I appreciate that color. That's it for me. So congrats on the great quarter.

The next question comes from Anita Soni with CIBC World Markets.

So the first one relates to Los Filos operations. So just looking at the grades, they've come off in the open pit. Is that what you can expect going forward? Or is that just a temporary sequencing issue?

That's a sequencing issue. We did pivot at Filos between 2 areas. We had a delay in finalizing our theological review of one area. We've got the permit for it, but we need to sign off on the archeological review at Guadalupe. And so we pivoted to an area in Bermejal and another in Los Filos, which lower -- a little bit lower grade required a bit more strip to get back into them, so we had to pivot.

I think year-to-date, Anita, we actual open pit grades a few of those are quite a bit higher than they were last year in aggregate. So it's just a sequencing within the year.

Okay. And then moving, I guess, solos confused me a bit. The -- and maybe this -- the cash flow from operations question that I have is related to Los Filos. But in your last slide, I think it's 17, you still reiterated this 55% of production more than 85% of operating cash flows managed to 85% still? Is that the case? Or is this the write-downs that you're taking at Los Filos like moving and the inventory buildup, is that like affecting that forecast? And you just haven't updated that 85%?

Well, the big push or the big driver of that is as you start to pull, especially in Mesquite, you start to pull ounces off these leach pads, right? So you've already spent the cash to get those ounces up there. And now in terms of cash, you pull those ounces off in the fourth quarter, that really drives that cash flow number. So we haven't changed that guidance. I'm not going to find it on the call, but that's really where that number comes from. You started -- you go through a big strip campaign, you stack a bunch of ounces. We saw that at Mesquite and then you start to recover them off the pad.

Okay. We will take this offline because on the first half, you're like around $200 million. So 85% in the back half would be significant number. So maybe we'll follow up on that one. And then another question with regards to the -- sorry, with Santa Luz. And just in terms of -- you mentioned something about the -- sorry, it will come through with the reserves. So is there any impact to reserves given the fact that you're not delivering or expecting now to deliver the prior recovery rate than you previously were looking for?

We've been working that through. And because we're still working on things such as the declining, we're not ready to concede any change at this point. Essentially, we've also been looking at opportunities to blend down. So hence, why I talk about it, it's not just a matter of improving the recovery, improving the throughput. It's also improving the ability to deal with the higher TOC ores. So we're meeting that head on.

Okay. And then just pivoting back to Los Filos. So the delay in the ounces, you're going to get some in Q4. Am I still right to think that perhaps your accounting cost at Los Filos will be higher than anticipated in Q4? Or will they end up taking NRV write-down as well? I'm just trying to figure out where you guys are in 2023 costs? Is it more -- like right now, you're tracking to the bottom end of that the guidance range? Will it trend up more towards the middle? Or should we be sticking to the bottom end of the guidance range after accounting for a potential write-down in Q4 as well?

Yes. So Anita, it's Peter. I'll answer that question kind of twofold. I'll address the cash cost to a good question. So yes, we do expect to see an increase as those ounces are realized. And then I'll just reiterate it as well with respect to sustaining spend, we have something to do in the quarter. So that's going to affect all-in sustaining costs as well with the increased spend in Q4 so on both counts, we're expecting things to be higher in Q4 and as a result, year-to-date for the whole year than for the first three quarters year-to-date. But still - sorry, I'll just finish, but still in range.

Yes. Okay. Sorry to cut off there. Thanks for my questions.

The next question comes from Mike Parkin with National Bank. Please go ahead.

Hi guys. Thanks for taking my questions. Most of them have been asked. But with Greenstone, if you're -- are you tracking ahead of budget on the total tonnes mined out of the pit and could that like -- and if so, I guess that would explain some of the CapEx spend versus maybe what you originally budgeted at the start of the year?

For tonnes mined, no, we're on track.

And then can you just speak to -- you mentioned how many people you have hired at about 300. Are you already making the transition to owner-operated with say, mining? And -- or did you always start owner-operated?

Yes. It's owner operated from day 1. We started mining August. I think it was of 2022, a couple of months ahead of schedule. And we switched to 24/7 in November or December of last year. So it's been owner mining all the way along.

And Mike, there's other aspects of the operation of the projects that have been transitioned to owner operated. All the ancillary buildings were transitioned and other aspects have been as we advance here through construction.

Okay. Thanks so much guys.

If there's questions online that I haven't got back to you yet. I'll get back to you by e-mail. There's no further questions on the phone. Greg, do you have any wrap-up comments?

No, just once again, thanks, everyone, for attending the call today. You know where to find us if you need information, you can reach out to Rhylin or myself. The website has again all the updates on Greenstone, including the site tour deck. And thanks again, and we'll talk to you in the New Year.

Perfect. Thanks, everybody, for joining us this morning. Operator, you can now conclude the call.

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