Equinox Gold Corp. (AMEX:EQX) Q3 2023 Earnings Call Transcript

Doug Reddy: 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.

Greg Smith: 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.

Anita Soni: 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%?

Greg Smith: 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.

Anita Soni: 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?

Doug Reddy: 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.

Anita Soni: 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?

Peter Hardie: 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.