Welcome to the Equinox Gold 2018 corporate update conference call and webcast. As a reminder, all participants are in listen only mode, and the conference is being recorded. After the presentation, you. Presentation will get underway in a few
This 100,000,000,000 sounds like an awful lot of 1,000,000,000. 18 percent. Drop to 120,000,000,000.
Alright, everybody. Thank you much. Thank you very much for joining us today. We've just concluded our annual general meeting, and now we're going to go into, an investor update Just a reminder to everybody in the room, please, that we are taking questions, from people on the phone and people on the webcast, and we'll take questions from people in the room. But we'll need to use the mic for that because we are archiving everything for the audio webcast.
I'm now gonna turn the presentation over to our chairman, Ross Vede.
Very good. Well, good afternoon, ladies and gentlemen, and those on the, the webcast. Welcome to, Equinox Gold's, annual meeting special meeting and we just completed that. We reelected the board at all the business of the the annual meeting and special meeting that approved the spin out of our Solaris copper subsidiary, or Newco. And, and now we're going to go through a little, snapshot of what we're doing in the company and for those shareholders present, I hope it's informative for those online.
I hope it's informative as well. We will be publishing our second quarter result next week. But we won't be having a webcast. And quite frankly, our financial statements at this point in the company's growth are are somewhat irrelevant because, all we're doing is spending money to build a big mine in in, in, Brazil and, of course, working on our our big project in California, but but I think today we're going to be able to give everybody a pretty good update on what's happening with the company And really the the the title here is creating a major gold producer and I would like to say this is, six and a half months in. So we started Equinox Gold, as most of you know, by merging 3 companies together, Anfield, truck and new castle, in a one company, the the deal was completed on on December 30th, I think, or 31st.
It's December 22nd part of me, and it was It was so it's, 7 months in now. And this is what we've done in the last 7 months. This is what the company looks like today, but it's changing really quickly. We're doing all sorts of things lots of news flow coming out. So, hopefully by the end of the year, we'll we'll hit all of our targets and we'll be a different company executing on the plan of trying to build a really important new gold producer that, delivers superior capital gains and ultimately superior dividends to our shareholders.
The first, first slide here is our directors, their experienced board, a very experienced board of of, many, many companies we've all worked with before, and, I'm very privileged to have such a great board helping helping build this company. I won't online every one of them. You can read them yourself and, we were all just reelected. So this is the board for the next 12 months. Christian, do you want to maybe just talk about the executive team?
Yeah. The executive team, on the next slide, is is a, I think a really deeply talented team for for a company at this stage of development and size and, you know, certainly there was a core of us, about 5 of us that joined together about a year and a 2 years ago to basically rebuild Aurizona and Brazil and worked together on multiple projects in the past. And, we've continued to supplement that team with fantastic skills coming from companies that have gone through exactly what we're going through, building mines, financing, and building mid tier to bigger gold companies, and I think the team and talent we put together with the support from our major shareholders is kind of second to none in this space, and, we're still a junior company, but we're on the verge, I think, right now. Great.
Thank you. Next slide is the cautionary and forward looking language of bladder that we have to went up. And, obviously, we'll be making forward looking statements today and speak to safe harbor on these. The next slide is an interesting one. This this is kind of a very personal slide for me.
This is a a picture taken from 1988 on a snowy field in a in a Northern Ontario. On my with my very first company, which is Equinox Resources. And we built a gold company. We had 2 operating gold mines. We actually had a zinc mine as well.
But we had a big gold discovery, which we ultimately, received a takeover offer we couldn't refuse from Hecla and and that was the end of that company after 9 years. But it was a nice company. I made a lot of mistakes and I hopefully, didn't make the same mistakes building all sorts of companies after that that I've been involved with and and we're going to try to apply the things that worked well and not the things that were, were cogs, you could say. With all those companies with Equinox Gold. But you can see where the name comes from.
It's, as I said, last we've already introduced the company. I'm I'm I'm hoping to book in my career with Equinox's one at the start and one at the end. This is a company I'm very dedicated to very passionate about trying to to build into a really big company and, and, I I I just have a a ultimate confidence we're going to get there quickly. Some of the companies I've been involved in, and not all, this is an incomplete list, but, there's I think there's 11 of them here. Pan American Silver is a large silver mining company.
Alterra was a large, a renewable energy company. We just sold earlier this year, and then the rest were a bunch of, companies that were built up in the sort of Illumina brand and and all sold, other than Lumina Gold and Luminex, which are current current, producers, and then Anfield Gold was part of the 3 way merger, which created Equinox goal. So, really because it's a gold company, I think it's proper to talk a little bit about why gold. Not only is gold a beautiful, beautiful metal. It's a metal that's been in demand for millennia, of course.
It's tracked the value of money for millennia It has a biting long lasting value. It's a hard us. It can't be demeaned. It can't be, it can't be reduced in any way. It's it's something that's tangible.
And it it it it's it's it's it's just a beautiful thing to produce. I'm very happy to be building a gold company because we're producing a product that's been eternal use by human beings, as a store of money, a store of value, and a thing of beauty. And you know, because it's a it's a it's a it's a com it's also, trades on rural markets. So it's clearly sick. We've only just bull cycles and bear cycles.
And I I really believe we're in a a bull cycle right now, notwithstanding the last 6 months or so of of noise, that has seen gold bounce around the $1300 level, very considerably. I still think we're very much in a in a early stages of a long term bull market where The price will exceed the previous high $1800 set just 6 years ago or 7 years ago. And, this slide really shows the the what's going on today is that there's a very strange and very unusual disconnect between the price of gold, which is actually pretty good right now at 12 What is it? 12:40, 12:30 today? It's still pretty good.
In in in relation to the last, say, 30 years. But for some reason and there's there are real reasons. Nobody seems to love gold equities, all sorts of reasons and that unusual and it's not going to last. So there's either going to be a drop in the gold price to reflect where the gold equities have gone to, which I don't think will happen, or there's going to be an event that has people saying, wait a minute, why should I buy gold or for that matter, a lot of other equities when I combine these cheap, cheap gold equities at the kind of the bottom of their of their of their value for the last, you know, many, many years relative to the gold price, and that's what's going to have delivered the best returns to investors instead of buying physical gold or other equities. So at some point, this is going to, you know, Nature doesn't like a vacuum and it doesn't like these weird disconnects either.
There will be a reversion I think gold will continue to do well and I think the equities will bounce back at some point. And when that happens, we are going to be ready we're going to deliver to investors superior leverage because we have this fabulous development pipeline, great asset base And we're delivering on what we've promised our shareholders we're going to do, which is to build a great new gold mining company. Other things that are happening in the gold space, mine production is is, mine production growth is slowing. This is well known. Grades are dropping, not a lot of new mines are coming on stream, and this these are all things that are that are building blocks for this new gold bull market in gold equities.
When there's a movement into gold equities, you're going to see a very rapid, increase in their price, I think, because there's so little dollar value. If you take all gold equities together relative to say the value of any of these tech stocks today or for that matter, lots and lots of other companies on the on the American and Canadian Stock Exchange. Just a little money moving into the gold space. It's going to make a huge, huge huge impact on the value of these companies. So that's the overall market.
The next slide is, is an example of what we did with Pan American Silver, and the only reason it's up here is not particularly to promote Pan American, although it's a great story. It's It's really to tell you what I'm hoping we're going to do in in Equinox Gold, but we're not going to do it in 24 years. We're going to do it in say 3 years, 3 or 4 years. What what what Pan American did was slowly build up its production and therefore its balance sheet is income statement over time And when, you know, over over all those years, it operates 8, 7 mines and it's it's really become a solid company multi $1,000,000,000 value, tremendous balance sheet. That's really the model for Equinox Gold But as I said, instead of doing all that rapid growth in sort of 14, 13 or 14 years, we're gonna try to do it in 3 or 4 years.
That's our that's our plan. And we're hitting on that plan right now, every single week we're delivering on that plan. So I'm gonna ask Christian to go over some of the things in more detail about what we're doing at Equinox Gold on the on the operational basis. And so you'll sort of remember that that that that strategy, the mission of of building ourselves as either large and there's no limit to upside. We're going to be as big as we can.
Large, profitable, gold producer, delivering out outstanding capital gains to shareholders and ultimately big dividends. That's the final product while obtaining a reputation for excellence, a reputation for excellence in production, in exploration, in financial management, in community and social responsibility, all of those things, I think we're gonna really try to to be famous for. And that's that's where we're that's that's what we're planning to do. Quickly. Okay?
Thanks very much, Ross. It's funny that when this merger came together, we had the exact same strategy, I would say as Ross did some of the others that obviously have backed this company. And, we felt that if we could put together some really special assets and people, you can really get behind it in terms of the financing. And I think on this slide, on 11 here, it just starts to show the beginning of that process here. We now have a multimillion reserve after the Castle Mountain PFS came out a few days ago.
You know, it's almost 4 and a half 1,000,000 ounces. So it's grown 3 65% last week. Our production profile just from these two assets alone does take us into that mid tier space of 300,000 to 400,000 ounces of annual production. That's a pretty meaningful company coming from 2 good sized mines and 2 good mining jurisdictions. So we're off to a start with these assets We have the capital to build Aurizona and get this growth engine going this year.
And I'll walk you through sort of what we're doing on the ground to get that going. And when you look at slide 12, just puts it all in perspective here. We're in the Americas right now. Our two for focus projects or Castle Mountain in Arizona. You know, when we came together, we had a number of other projects, and we'll talk about what's happened to those, but these are core gold assets that are of scale and size, which we think are a bit unique and rare in the market these days.
A lot of smaller single asset producers come into production or been bought out. There aren't a lot of these around. We have 2 of them and we think we're in a pretty privileged place. We're pouring gold at Aurizona by the year year end this year. I remember when the manager team.
We came into Arizona. We had about 2 or $3,000,000 in the bank and the plan was to pour gold at the end of 18. We're on track to do that. You know, we put our own money into this. And now we've got ROSA support and, other shareholders, and it's a nice track, that we're on.
And if you look at the shareholder base here in the bottom right, I think it's worth pointing that out is you know, we've got a bunch of high net worth investors. Ross has about 12% of the shares. We have about 1% ourselves. I think we put in $5,000,000 to $6,000,000. Which is meaningful money for us.
None of us are independently wealthy as individual managers, but we put skin in the game here. If this company is successful and you're successful, we're going to be successful. So in this together, and the institutional based on our shareholding is a bit small at the moment, and that's something we're going to work on. That's a great opportunity in this company because they will support us as this market starts to turn here. When I turn over to 13, I just wanted to hit on, some of the things have been achieved and just stop on this life for a second.
I mean, I I look back and I go, wow, what we've done this year on the ground. And I know the share price at the moment, it's a bit disappointing where it is. But in terms of what's been done on the ground, it will get reflected, and that's our our strong conviction here. Look at our core gold assets, we brought Aurizona into the portfolio through the original, merger with JBL, brought Casselin with a 3 way merger to core gold assets. So they're, we think, are special we'll have very, very long lives.
We're moving towards production. I mean, Aurizona, it's gone from a PFS to a feasibility. It's fully funded, and we're pouring gold this year. And that'll be about 150,000 ounces of production. You got Castle Mountain.
Marks done a great job with the team in pulling together the pre feasibility study. Now it's a definable project 400,000,000 NPV that's sitting on our balance sheet and a 16 year mine life, and we're looking to commission that at the end of 19, 1 year after Arizona. So two mines within the next 18 months. And then you look down to exploration, and this is a part that actually we get goosebumps about. Sometimes we go down to sites, and I think actually part of the reason Roscoe's so excited as well and Scott's been, the key spearhead in this.
And if you have any questions, please ask later. But Aurizona, it has a 7 year mine life right now, 150,000 ounces a year, but when we went down to site, we really could see the potential there. There's 2000 square kilometers of Greenstone Belt. It's a lot like West Africa was 20 years ago, underexplored, not touched, hasn't been enough money spent on it. And now we're getting into a place where it'll be in production.
Scott started drilling a couple of key areas to the ends of our So I'll show you later, also some new areas, and also we're looking underground. We think we can double this mine life, maybe even triple it, you know, just give us a little bit of time here as we wrap it up into we'll show you how we're gonna
do that. Double the size and double the mine life. Okay.
We're gonna go faster and bigger. And then Castle Mountain, I mean, it's already got 60 year mine life. We will drill there. It will grow, but doesn't need to be tomorrow. So we've got a little bit of time on that one.
Noncore assets we said when we did this merger, we were going to spin on assets we're gonna create some value through making sure people recognize those other assets because right now they're only paying for the 2 gold assets in our portfolio. So Korkancha has now been sold. That was executed that'll close in a few weeks' time here. Obviously, the spin out for coppers now have been approved. That'll happen on around August 3rd.
No one again is paying for those shares. And we can talk slow us later. We talked already about insiders being fully invested. We've continued to put our money in the company even last week. I think, Ross bought another 1,000,000 shares.
I bought another 120,000 of other management board members did. So we continue to invest in this and believe in the story. And another thing that I think is makes us a little bit unique because there's some real financial discipline in this company and, if you've listened to Paulson at the Denver Gold Show, they're ranting and raving about management excess and that this is not one of the companies at this stage. We're gonna make money. We're gonna earn our our keep we're gonna do it alongside shareholders.
We're not gonna take the money out of the company before we prove ourselves. So I think this company is off to the right, in the right direction And when you look at 14, I mentioned this earlier, but we got 2 unique projects coming into production in the next 2 years. Who else has this of a scale of our size? Forget the majors in that right now, but certainly of the smaller companies. And I think it's something that's unique in this space because there hasn't been enough exploration to bring enough development projects through.
So We love having these in our portfolio. Diving into the individual assets here on page, 15. Aurizona, you can see a picture. I mean, if you study it, you'll you'll know there's been big change at this site here. You've got all the front end of the plant being built, and I'll show you that, a couple of photos in a minute here.
But this is a 140, 50,000 ounce producer at sub $800 all in sustaining cost. That's a really nice mine. It'll produce nice cash flows and it has lots of upside when you look at slide 16, the ex- or the construction progress, we're really pleased with how it's been going. We've been working away here I mean, officially we started construction at the beginning of this year and we'll be pouring gold by the end of the
year on budget on time.
On budget on time. Knock on wood. Our mills arrived. They went through customs. They're now on-site.
That was our key critical path. We're really excited to be seeing those at site. We were watching that ship on the internet come across from China, and it's it's there. Also, you can see the big crushing wall here in the bottom middle part. That was a that was a really major task.
It's a lot of concrete that is now poured and done. That scaffolding, I think, is all gone as we speak today. And we've got a new mining contractor called UNM, and it's done a fantastic job on the mining so far. So a lot of those key pieces are in place. We've basically committed to our key equipment and costs and now it's about execution and building this mine and the rest of it.
We should be commissioning in Q4, so a few months away now. The exciting part is on 17, 18 here, and and the upside. So you see Piazza, it's a nice sort of sausage shaped pit. It's got a 1,000,000 ounce reserve. That's a 7 year life.
There are a lot of ounces underneath that. So we're doing some work on the underground We're doing a study at the moment. I'm not going to promise any timeline, but we'll certainly come out as we establish what's there underground, but certainly, I know Ross when he went down to site certainly recognized this very quickly is as they drill deeper there, this pit's about two hundred meters deep. You go down to six hundred meters. Every single drill hole hits same mineralization.
There is an underground mine potentially here that is really exciting and significant.
And it's I guess what I how I would, just describe this is not a property. It's account. And by that, I mean, it's a very large land position that's held by the company that over time over the next 5, 10, 20, 30 years will evolve into a multi mine, multi decade reserve life, I'm going to guess it'll end up being a steady state in the range of 250,000 to 300,000 ounces a year, literally for decades. It's got, multiple structures. You can see one here, the piano trend, the Tatterjuba, if you have a north, there's a couple to the south, there's all those, all those gold trends off to the off to the east.
You can see on the slide. That's just the surface. And those are all those areas in pink are areas that are are have been historically mined very shallowly by these, Gueran Perris, these local miners that look for gold nuggets and service, but they define these trends, these big trends. If you connect Brazil with Ghana, it is a perfect fit and and gone, of course, is known as the gold coast. It has these huge, huge, long life mines.
That's what we have here at Arizona. It's it's going to be a a very large producer for a very, very long period of time once it gets going at a bigger stage starting with what we're doing right now at Piazza. And then evolving into both an open pit, I think, and what will be a long life underground mine.
18 just shows the underground potential here, come out with more more information on that as we we continue to develop it. We're drilling at Tatajuba today as well. Ross mentioned Tatajuba. There'll be some news on that hopefully this quarter here. A lot of people have been waiting for that, but, I think we'll give some people some some interesting information, exciting, exciting information that, has been long, long time coming.
So We look over on slide 19, turning over to Castle Mountain in California. You know, Mark LaDuke's been spearheading this and done a great job. And, It's 3,600,000 ounce reserve. Wow. You know, we have a 1,000,000 ounces before that.
That really changes the game for us. A 16 year mine life. Where do you get that? Know, it's not that easy these days. 200,000 ounces of annual production for the phase 2 of this project and sub $800 all in cost fits perfectly in our profile.
Both of these two mines our past producers as well. So a lot of those historical questions, you know, we we know some of the historical problems and we know what works well. So we can adapt to that. And we look over on page 20, just very quickly because I think a lot of people have heard me speak on this recently, we're gonna build this in 2 phases 2019, we'll build phase 1. It'll be about 45,000 ounces of production.
It'll be run a mine, simple cheap $50,000,000 of capital easy to finance if we need any of it and basically to be up and running around the end of 19. So it's got an ambitious timeline, but we've got all the key permits in place know, and that's really important in California, obviously, because this is a past producing mine. Phase 2 will take a couple of years to permit. So we need to extend the area of disturbance, but we do have an EIS. We do have a permit in that area, but we do need to disturb a little bit more land.
So we're giving Mark a couple of years here to work on that. And, we could be producing 200,000 ounces within a few years of actually getting up this mine up and running. When you look over at 21 on Castle, we've talked about some of these numbers, but, you know, the cost base is what's pretty exciting. It's a pretty simple technology, run a mine, dig it up, go over, and put it on a leach pad and some plaster The plant is pretty simple. We'll have a mill there as well.
This is the run of mine heap leach, but it'll be a small mill of 2300 tons a day, so relatively cheap in terms of capital. The mining. It's a big bird moving exercise, so it's important that our mining is, obviously efficient. So a dollar 40 a ton. And on 22, we won't dwell on this one, but there's lots of exploration upside, and I think Scott could probably go on on this one for for a while if you have questions later.
You can see the JSLA pit there in our potential super pit or large pit there. That's where the ore body is. That's what we'll be mining. But there's already been some channel sampling on the east ridge there. A little bit of drilling outside of the shell and you look at those collates, that's double our reserve grade right there at surface.
That could be a meaningful difference. But again, we'll do some work on that over the next year or 2. And then there's other areas like Northwest rim, which is exciting, and there's some early, interest up there. 23, looking at the actual, growth trajectory for the company, and the potential valuation. I mean, we look at ourselves as trading in that sort point 4, maybe 0.45 depending on what analysts are estimating for our valuation range, price to net asset value.
You know, it's a reasonably low valuation. I know the market's a bit depressed, but as we move up the scale in terms of small producers and midsize producers, that is definitely not the multiples they trade at. So without the gold price changing, without any dramatic change in this company, we will be a producer come early next year, and we'll have a nice development pipeline. So We certainly expect to see that valuation change. It's an interesting time to get involved in this story and, you know, again, pre appreciate all of you who bought our shares.
We see this as an exciting ride that's really getting going now. And when you look at 24 digging into the value a little bit more and looking at a different way, as of last week, we can now talk about Castle's value. So we've got 2 projects with over 600,000,000 US dollar net asset value. That doesn't include any exploration upside for either project, and there's a lot of identifiable upside there. It doesn't include solaris copper, which we own for I know, it doesn't include Elk Gold, doesn't include court count that we just sold.
So in a way, you look at this, you're trading at a discount on this basis as well, and there's lots of potential upside. Forget the gold price. And then turning over and, just before we conclude, we did want to mention a few words on Solaris Copper. I mean, we are spinning it out. We're we're being true to ourselves.
We're a gold company. We do have 3 exciting copper assets. We have a couple other little option plays that are in that portfolio. Two of these are originally David Lowell discoveries. So they come with real credibility.
And the one that we're really excited about is, we're in Sedona, Ecuador, which Federico's been working on the last 4 or 5 months. And this is a copper pour free. It's been explored. Probably about 15% of the property. I think it's 24 or 30 holes.
It's £2,000,000,000 of copper already. 13. 13 holes, and it's got £2,000,000,000 of copper already. This one, we want to go and explore. This is where the initial immediate quick value comes from once we get back there in exploring.
And Federico's been doing a great job with the local communities, which has probably been the the key change down in Ecuador. I mean, the government's been very very receptive to mining recently. And now it's working with the communities to get the access agreements, and he's been working on it and, spending a lot of time down there. And we hope in the next number of here. We can unlock that we love to be drilling in the first half of next year.
It can take a little while to get these agreements, but we're on a good track now. So that could be the 1st catalyst
And so just, yeah, just to follow that thread, I was talking about that earlier. That's why we're keeping it private for now. We're we're and we have authorization to spin it out now. We're gonna do all that work to actually create the vehicle. It'll be held by every single one of the proportion to what you currently own in the company.
And the timing on taking it public will be when we have warrants are really ready to go. We are assured of getting great results that we're in. We have this fabulous exploration project in Chile called Ricardo. We are likely to be, designing a joint venture on that shortly. And then we have Cerro Verde, or pardon me, La Verde in Mexico.
So we've got these big assets, but until we have a big story that is an active story, which we don't have today, it's pointless to take it public. When we have, all of these things ready to go, we'll be churning out good news and and I think you'll see a a really great result in the share price. That's when it'll be public. Probably later this year. Maybe even at the end of this year, it's all going to depend on what happens in Ecuador this year, but, but so far, so good.
So we have a pretty good visibility on on getting going on drilling late this year. At that point is when we'll take the company, we'll take Solaris public and it'll be a very easy thing to do. It's it's it's it's just a few mechanical things to do to actually have it listed and and and going in the next year, it'll be a proper public company.
And when you look on 26, it is a reporting issuer, so you still get information. It's got a website. You'll still have access to all that. It won't be listed. That's the key thing.
We're gonna save the money on that as well, which is an ISO in in German. Our management will continue. Greg will spearhead it here, who will run it as CEO and, has a long history with the assets as well. Those are the key people behind it and Dave Lowell. So it it has some momentum, but it would be kept quiet and we won't let others get these assets for free in a sense if we ever use any to do a deal or something, you will own this.
It won't be diluted. Turning on to 27, I guess that brings me to the conclusion here and I think may be a few questions on this, so I won't go through in a lot of detail, but as Ross said, we want to build here starting out a mid tier company, but a large gold company, we've got 2 foundational assets that will get us there. But the goal here is to diversify risk of multi assets, multi jurisdictions, and Panam Silver is a great example. David and I were helped help build, endeavor mining from 0 mines to 5. And, we plan to do it again here, and we've got the 2 core assets start out in good jurisdictions and we've got financial support.
We've got key inside our ownership. You know, we live and breathe this company in these shares and, we're really excited and I'm really enjoying working with the people and just want to say thanks to the management team here too. They put in a heck of a lot of work over the last 6 and a half months and probably a couple of years before that before Ross was involved. So I need to remind him that periodically. You know, things are off to a good start.
We're really happy with how things are going on the ground and people will not be able nor the story, I think, coming to your end. So
I think I'll end up there. Thank you. Thank you very much, Kristen. I think that's that's a great wrap on on what we're doing a little bit about our mission or strategy and just look look for more and more, good news coming out of the balance of the year. Lots of milestones, lots of wealth creating events, and, ultimately, us at the market.
We'll take note of it and start to bid the price off, which is which is our best reward for what we're doing. Berlin?
Thank you. So we're ready to take questions now. If you're on the phone, just a reminder that to ask a question, you need to hit star and 1 on your telephone keypad and the operator will queue you up. If you're on the webcast online, you can submit a question by clicking on the submit a question tab, those will come to me by email, and I will read them out. So do we have any questions from the room to start?
Kylie, there's one at the back there.
Yes.
Hi. It's, David Millig from Macquarie here. My question's on the corporate strategy side of things. You've obviously been quite busy from a divestiture standpoint. On the October call with the merger acquisitions was mentioned as an important part of the strategy as well.
Could you expand on that and maybe some of the key criteria?
For sure, David, for sure. So we have the strategy of building ourselves into a large gold producing company. That's the that's the overall overarching strategy. How do you get there? And how do you get there quickly?
You, you get there by developing your existing So we have these 2 cornerstone assets, Castle Mountain and Aurizona. Each is capable of producing a quarter 1,000,000 ounces a year, or 200,250,000 ounces a year over the long term, meaning over more than 10 years. Those are each that's a pretty significant objective by itself. But, you know, we also have a desire to grow by acquisition, and we are and we mentioned that right at the start when we announced the the the merger. And, and yet so far we haven't delivered on that.
It's not for lack of trying. We have made offers on 3 mining companies current producers because we think right now at our scale, we, an existing producer would bolt into these 2 big development projects really, really well. It would it would it would tie in really well, provide some, give us a decent income statement today, increase the size of the company, get us a different rating. And so we've been really working on that strategy on the M and A side. But, of course, we are also, sort of a frugal group, and we aren't interested in growth just for growth 6.
We're actually trying to make some money. So the, the acquisitions we've we've aimed at so far, and these all take a fair bit of work. They take a lot of due diligence. We've looked at a lot of other companies and have said, no. The ones we've bid on, we haven't, been successful in.
And and there's interesting reasons for that. I wouldn't say anybody necessarily has but, these are certain targets and we think fit us really well. But for one reason or another, we haven't managed to conclude deals. We are, we are still working on a couple of projects reactively. So I would say, you know, watch for news.
It's it's still a pillar of our strategy to to to try to acquire good deals particularly now because we think really it's a it's a buyer's market right now and if you're a buyer, you're really gonna get great value There's a lot of distressed companies. The market is is has has disappeared for a lot of these smaller gold producers I described already that I don't think it's it's going to last for very long, but this is the time to be buying, and we are definitely going to be trying to bolt in one other deal by the end of the year if we can, but we're not going to overpay. We're not going to do a stupid deal just for doing a deal and and we'll see what happens. That's that's all I can say on that.
No follow-up questions, Dave. You always have a follow-up. Well, we have the moment. We have no questions on the phone and no questions on the webcast. So we're doing pretty well.
You guys have done a very Good job explaining things. Oh, yeah. Alright. Where's Carrie Smith when you need a minute?
Yeah. Just just on, expiration. I know it's important to you're in the development cycle. You're developing a couple of mines. You obviously like the expiration a lot.
Maybe if you could expand on how you're kind of balancing building while exploring?
Well, if I could start maybe Kristen Scott, you can add to that, but, it is a it is a balancing act because we don't have unlimited money. Every penny we, we spend, we have to raise at this moment by selling shares or borrowing. And, neither of this right neither of those is terribly palatable, if you have, if if you if you think your share price is going to be higher or if you think you don't want to over leverage the company. And so, it is a it is a balancing act for sure. We are trying to do both of those things with judicious expenditure of our shareholders' money.
That means really spending every penny as wisely as we can. Diluting the shares as little as we need to. We will have to do a financing at some point in the next year to build to build Castle Mountain, for example, either by by equity or by debt or a combination. And we have great ambitions for exploration programs. Wait until you see some of our of our of our plans in in Arizona.
I think we'll roll out, some pretty interesting results in the next quarter at some point. And, and along with those results, we'll come and need for more capital to advance those those really awesome opportunities we have and, and so, you know, we will need more capital than we have right now. We've got enough to to build Arizona. We've got enough to do what we're doing at Castle Mountain, but, of course, we don't have unlimited money at the moment at this moment, and we will, we will have to raise money.
I think until we are in production and producing cash flow, we want to be really careful and I mean, it's the hardest thing to do is to start Scott of Money because I think he can actually make a huge impact and I mean, know, Scott, you want to just comment a couple of things you're doing that are are impactful, but we're not spending a lot of dollars on at this stage. I'm getting ready to if we need to.
Exactly. As we derisk the the building of Aurizona, more money is gonna trickle towards exploration, and and it's a moving target in terms of what we can do to create value now. We've recently just wrapped up a small program on Tatajuba, which is, another key target, couple kilometers long strike. You saw earlier in the year, a getting some incredible grades, basically on surface to the east. All of these things show incremental to significant extensions to mine life over the long term.
And as funds that are freed up and made available, we'll start to keep, advancing and growing, that resource base and extending that mine life.
Okay. We have a question from a caller on the phone operator. Please go ahead.
Thank you. Our next question comes from Robert Seitzer a shareholder.
I have a question. I was a shareholder of Castle Mountain Gold and then became a shareholder of Equinox Gold. My question was at Castle Mountain, Richard Walky was the predominant, the largest shareholder. And when the merger was announced, it was, it was said that he was stayed on as a strategic investor of Equinox Gold, but he's not, he's not on the board. My question is, is Richard Walky still involved in this company and is he still a shareholder?
Yes. Very simple question. If you didn't hear it, it was is Richard Ward? Who was the principal shareholder behind New Council still involved in Equinox Gold and if so, in what way. I can tell you he is a shareholder of Equinox Gold, and I'm I would be almost certain in this, although I haven't asked him, but he owns every single share he originally owned.
And I I think he actually added to his session just recently. That's from the the Cheryl news standpoint. In terms of his involvement, I can also tell you I speak to Richard 2 or 3 times a week Regarding Equinox business, he is extremely involved, extremely engaged, absolutely involved as as a strategic, advise you to the company and, and I think very keen on our mission and our plans and our execution.
Thank you very much.
Thank you. We have a question from, listener online. This is about Orinci. When do you think you'll be able to start drilling at Orinci? And are there any months of the year when you can't drill?
Well, we just had a board meeting this morning where we, talked about or incident. And, I think we could probably summarize kind of where we're at on that. Yeah.
I think our our hope and our plan is really here to get an agreement and an access agreement this year so that we're ideally drilling if all permitting online goes well in the first half of next year would be the ultimate goal. There is some flex in that timeline. Obviously, we preferred to the end of this year but certainly early parts of next year and we set them set ambitious timelines but I think we've done that for all parts of the company so it should be treated no different
Yeah. We're really with Warren. So we're really trying to step back, I think, and come at it with modern basic principles. The very first one is is community acceptance of what we're trying to do. We're trying to get our social license.
Number 1, And if we get our social license, part and parcel of that is more is is having the local community understand what we're doing, approving where we're going, understanding where we're going and being part of this. We're not looking at it as being a us and a them. It's it's about a we and and trying to try to help the community, provide jobs for them, provide a long term sustainable income, and And with Federico's involvement, actively, he's down there all the time. We're we're really, I think we're hitting those hitting those targets. Pretty well right now.
So end of the year, early next year, that's kind of the timeline.
Thank you. Are there any other questions from the room?
Oh, there
was actually Yeah.
I have one. My name is Don Lee. I'm sure.
Oh, we need to oh, you got, Mike. Okay.
Just wondering, when Solaris is spun off and it a value has been established. What will be this ta tax implications for shareholders?
Tax implications
I mean, it'll be for every Cheryl to be different than individual. I mean, depending where you are jurisdictionally in the world and that it'll be different and and how your structure is set up. I think generally for most people, it'll be a it won't be a taxable event, but I can't come out of each individual, and particularly if you do have a specific question, I think it's best to send to us, and we'll we'll address it.
Wasn't there a fair bit of discussion on that in the information circuit?
Yes.
Yeah. So Susan, maybe you can you answer that question? Let's
give the microphone to Susan if she's going to answer.
Susan, is our general counsel?
As Christian said, there is a fair amount of disclosure in the infill circular itself that, that talks about tax consequences of the of the, transaction. But for the most part, I I mean, I can't speak for people, but, it's should be it shouldn't be, big consequences for anybody. It does depend on where you live.
Yeah. You'll need to seek advice from your tax adviser for that. We really can't provide too much detail about that. I understand that there was a follow-up question to the WERINSA exploration question.
No, there was a, there was another component to that question
for seasonality.
And, to the seasonality, you can work all year round every winter. No problem. You're in the jungle, so it's always damp. And, there's 2 rainy seasons, so May, June, and, August, November, sorry, October, November are particularly damp. But you can work year round.
Right. We have a question from an online listener. So phase 2, it's a 2 pronged question. I'll give you one. Phase 2, the project requires further permitting.
Can you please provide an update on your progress?
Yeah. So as just referring to the Castle Mountain project, So phase 1, we have a permit for it's a past producing mine. We've got an area of disturbance and EIS in place that we work within for phase 2. We're gonna plan to work within the same footprint effectively, but we do need to disturb a bit more area and it'll be a larger project. So we are starting and Mark's starting basically as we're doing phase 1, the permitting work.
So all the baseline studies, etcetera, to get the EIS upgraded amended. And certainly our view is, you know, a producing operation that's amending is certainly a more reasonable place to be in when you go to the regulators. And, we do expect a couple of years of work as it does take in the US to go through the permitting. We don't see any red flags, but it'll take time. And it's, there is a little uncertainty on the time, but, you know, we've got, a plan in place and Mark's already on it.
And just a second part of the question was, and I think you alluded to this. We had a really great map in the Castle Mountain pre feasibility results, which July 17th, we webcast that, so it's on the website. But he's just asking about whether we're gonna have to increase the size of our landpack and encroach on the surrounding monument.
Yeah. No. I mean, Mark's already shaking his head here, but, no, we don't. There's I'm thinking of the map, and it's got a green line effectively on it. Our EIS area, and you can see within there a turquoise line that is our area of disturbance.
We can continue to move that area of disturbance out to the EIS boundaries. And that's what the plan is when you look at and fit the maps together of Mark's new plan, it still fits within those EIS boundaries. So we've made sure that we can, work within what we already have on the ground. And not, and we're not going to be in the monument or the preserve. And I think that's probably the key crux to the question.
That's a good point we do not need to work in the monument over the preserve to deliver a 16 year mine life at 200,000 ounces basically a year.
Alright. Are there any other questions from the room? This one there? Carol and Gilbert. Carol and Gilbert to shareholder Caroline Gilbert, to shareholder.
When the Solaris shares are made available, how will warrants be also made available? Are they automatically attached? Yeah.
The the way that the warrants are dealt with is that you don't have to worry about anything with them because what happens is when you go to exercise your warrants, you will just deal with it exactly as you would have normally, but instead of you will get 1 share of Equinox that you would have been in able to, and you'll get 1 10th of a Solaris share at that time. But you don't have to do anything at at this stage. It's just gonna be a point that you go to exercise. But there will be a
scenario as well.
Yes.
Yes. Not a worry, but you'll
It's a subtle difference. You still won't have your your existing warrant. And then when the arrangement is all concluded and everything has been approved, it is deemed that at the time that you exercise that warrant, you get the Equinox share and you get of the Solaris share. So you are not going to be issued a new Solaris warrant. What happens on this on the warrant side of things is that when you exercise you get Equinox and you get Solaris 1, Tim.
So Susan, just to be clear on that, if because the some of the Equinox warrants trade, If you bought those Equinox warrants and then ultimately exercise, then you would end up with a proportionate share of a of a Solaris warrant plus your Eco Rose warrant.
You exit for the for those warrants? Yeah.
Yes. Yes. For the tradable warrants, you'll end up with 1 Equinox share and 1 10th of its largest, just like any
of the other pieces of proportionate. Yeah. Thank you.
If there's any more questions about that, you can just send an email and we can follow-up, online. Are there any other questions from the room?
Yes. We bought
one at the back, Steve. First, thanks. Emily JVs with Linde Equity. You made some comparisons Ross with, Pan American. Curious about your thoughts regarding the successes of Lumina Copper.
Are there, comparisons you can draw? Between Lumina Copper and Equinox.
I I wouldn't say there are, and I'll and I'll see why because if you think about these companies, there there's a very significant difference between building an X nation company that's in the business of exploring, quantifying and selling its asset to some bigger company. So at the lumen group were involved in these these huge copper deposits that required 1,000,000,000 and 1,000,000,000 of dollars to build. And, and that just wasn't the business plan of those companies to finance those things and spend the 4 or 5 years to go through the permitting purgatory and all the all the stuff needed to build those huge mines. So this the plan those plans those companies were were the mission, the strategy was to sell those companies. And with Pan American, And with my first company, Equinox, Equinox Resources, and with the with the energy company, these were producing companies.
These were companies with operations, with with lots and lots of employees with a good income statement, with a balance sheet, pay dividends, and that's what we're trying to do with Equinox Gold. Over the long term. I hope if we do this right, that, that Equarice will live longer than I do. That'd be worth a hell of a lot. More.
Alright. We had a question in the middle of the room there, please.
Yes. I'm just wondering if there's any updates on the, the Luna Greenfields area with Anglo.
Do you want to share with Scott? We continue to advance number of targets, angles tune of expenditures to this point. They're somewhere in the order of 9, $9,500,000. It's, it's a challenge, but they are making good progress. You know, you, you tend to, to come in from clean, fresh start with, you know, no infrastructure, no setups.
They've had established camps, base of operations, with all their big company systems in place. We've done the airborne geophysics, and so there's been a lot of work reprioritizing, tracks of land, large tracks of land. And, on a much bigger scale than I am challenged with at doors on a proper, there's where you want to go, and then there's where you can go, and there's where you have to go. The way you have to go is, you know, with permits expiring, that sort of stuff. And if you deem it to be a high priority or high potential permit, then you've got to go and spend some money to keep that and advance that get to positive final expiration report.
There's, where you, can go might not be able to because it takes a long time in some cases to establish your social license or your us agreements. And there's targets that we just aren't going to get access to. So they continue to work diligently on the ground. And, going to be giving more of an update here in short order.
I mean, the only overlying comment I'd say to that is they have changed their whole greenfield approach globally. I mean, their head of exploration. I think it was based in Perth is gone. Their Brazilian head has moved on and also, they've sold a lot of their greenfields in Columbia. Certainly deemphasized it.
So, we hope they'll keep committed, but, you know, you never know, but they're spending 9,000,000 dollars, $10,000,000 on it and we're getting all that work and and geophysics for free effectively, which has been really good.
Okay. We have a question from an investor in the United States. Ideally, what kind of acquisition targets are you looking for in terms of total production and jurisdiction?
Right. We've actually got a pretty, defined, kind of size. We're looking at cost and and even jurisdiction. So we are able to screen fairly effectively. They the size is something in the range of, you know, 100 to 150,000 ounces or plus or minus, in operation today or quickly could be could be scaled up to that.
That's the size. The overall cost in the range of you know, a couple of $100,000,000,000. That's sort of size, which will be funded through a combination of debt and equity and and potentially other other means. In terms of location, my personal travel line is Latin America. That's where most of my experience and success has been, and the Americas generally Canada right down to the bottom of team in that main area.
However, Christian and his team from never mind that that whole, his success really came out of West Africa. And so we have this this great team, David's experience, Christian's experience, and so on, coming from, places in West Africa that have been really, really successful for for gold mining companies in the last 10 years. I would not exclude something there, although it wouldn't be my first choice personally, but it you know, we're we're we're a team and if we all think there's a better return on something there, we'll maybe look we have looked there. We have made an offer on the company there. We didn't succeed in it.
Actually, nobody has yet, but, that is that it don't exclude it, but it's definitely not not part of the plan. Clearly the 2 jurisdictions, the United States and Brazil would be would be even more preferred, I guess, because we are already there and and have all of the, infrastructure, human resources infrastructure to be able to capitalize on another acquisition in those locations. But it's also true that diversification, I think, is a very good strategy for us. And, and so a third jurisdiction would be okay too.
Alright. Are there any other questions from the room? One at the back?
Yeah. My name is T. Olin, the manager of Linde Equity Fund. And, I recently saw your fireside chat at the Canadian mining symposium. It was very impressive.
I ended
up actually watching it twice.
Oh. I
saw it in the evening, brought up the office, hey, we gotta watch this. And, so I know you talked about, you provided a a a very a demand case for silver. And that's, that 10% of the, demand for silver is not for maybe a dozen years ago made a case for copper being a sort of like energy metal. And so I'm just wondering, I I appreciate that gold equities have been beaten down in opportunity there. But I wonder if you can comment on, what your thoughts are in terms of a demand case for goal that would sort of report or raise the price going forward?
Well, the demand used for gold is 3000 years of human history. It's it's it's, of course, cyclical. It doesn't it doesn't, you know, there there are times when there's more demand and less and less demand, but gold is money. Gold is, is really, you know, the ultimate store of value, I think, and that's been proven by, as I said, 3000 years of of history where it's maintained its value despite paper currencies continually being devalued and devalued and devalued. And really I don't see anything different today.
There's an immense amount of devaluation of paper currencies happening. US debt particularly is is going up and up and up. Global debt generally speaking is increasing. Inflation is on the is on the the verge, I think, of returning. I think whether you have, devaluing the US dollar, you're gonna have a strong gold price you have increasing inflation, you're gonna have a strong gold price.
Neither of those has actually really happened yet. The dollar is still strong. It's just been it's just being chipped away at right now. I think that's where you're seeing a little bit of movement in in in the gold price the last couple of days. But, you know, and I don't know what'll happen.
It might be, it might be tomorrow. It might be 2 years from now. I just don't know, but I am very strong in my conviction. That gold will return as a asset of demand by financial investors as a price. It'll go through the current sort of it's bumped up against a 13.50 ceiling 5 or 6 times in the last year or so.
It'll get through that. It'll run to $1400 an ounce on its way through the previous high of 1800. As I said, when it happens, I don't know but we wanna be positioned as having great and growing and greater leverage to the price of gold for that exact time when it when it You know, I go back to my silver company back in back in the time when I started in 1994, and I was sure, you know, I looked at the demands of my fundamental silver, and they were not December to gold today. And, I was sure silver was gonna be double its value. And, you know, by the end of the decade, 6 years later, well, it was actually less It was actually lower than it was in 1994.
It went down not up, and I was thinking, no, it's challenging. All these these these certainties that I had, but then it round to $44 an ounce, you know, from 4. So I can't predict when, but I have conviction it will happen. And it it it it it, you know, when when the bigger financial markets crack, I'm sure they will. You'll see, a big correction in the in the particularly in the US markets.
When that happens, I think that's going to be very good for gold, particularly on a relative basis. And and and all we can do here is we can build value. Whether the gold price goes up or down or stays sideways, we're trying to build a real company with real earnings, real cash flow, real value for investors here at expiration success, building good minds that run well at any reasonable gold price And if we have this this happy occurrence of gold going up, that's just going to be icing on the cake. That's really been the story of of my other companies. I can see it as a I mean, I I just don't see what's wrong with the the model we have.
It's just going to it's going to happen. And I hope it happens quickly. We're certainly so far, several months in, we're doing pretty well hitting our targets. And I think you're going to see that continuing solid growth, simple plan, simple mission, well executed, you're gonna end up with a a greater shareholder value by the end of that.
I think we probably have time for one more question because I promise Ross, I keep it under an hour. Anything else from the room? Alright. I'll pass it over to Ross and Christian for closing remarks.
Anything to say, Christian?
No. I just wanna say thanks for all your support of shareholders here over the last, you know, few years because some of you I know have been in this room several times and, you know, building a business isn't always a sprint here and and unfortunately financial mark expect that, but over time, we'll be able to deliver on this and, hope to see you here again next year.
You bet. Thank you all for coming and joining us in this and this young company on a big adventure to build a world class company. Thank you all.
Thank you for joining us today.
You got a
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