Thank you for standing by. This is the conference operator. 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, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. If you are participating online, you can submit a question using the Submit Question tab on the top of your screen. We will now join you with the meeting room in Vancouver, where the presentation will get underway in a few moments.
The material we're talking about.
This $100 billion sounds like an awful lot of money. 18%. Dropped $120 billion.
All right, everybody. 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 going to turn the presentation over to our Chairman, Ross Beaty.
Very good. Well, good afternoon, ladies and gentlemen, and those on the webcast. Welcome to Equinox Gold's annual meeting, special meeting, and we just completed that. We reelected the board, did all the business of the annual meeting, the special meeting that approved the spin-out of our Solaris Copper subsidiary, or Newco. Now we're going to go through a little snapshot of what we're doing in the company. 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 results next week, but we won't be having a webcast. Quite frankly, our financial statements at this point in the company's growth are somewhat irrelevant because all we're doing is spending money to build a big mine in Brazil and, of course, working on our big project in California.
I think today we're going to be able to give everybody a pretty good update on what's happening with the company. Really, the title here is Creating a Major Gold Producer, and I would like to say this is six and a half months in. We started Equinox Gold, as most of you know, by merging three companies together, Anfield, Trek and NewCastle into one company. The deal was completed on December the 30th, I think, or 31st.
22nd.
December 22nd, pardon me. It's seven months in now, this is what we've done in the last seven months. This is what the company looks like today, it's changing really quickly. We're doing all sorts of things. Lots of news flow coming out. Hopefully by the end of the year, we'll hit all of our targets, 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 slide here is our directors. They're an experienced board, a very experienced board of many, many companies we've all worked with before. I'm very privileged to have such a great board helping build this company. I won't outline every one of them. You can read them yourself.
We were all just reelected, 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, I think, a really deeply talented team for a company at this stage of development and size. Certainly, there was a core of us, about five of us, that joined together about a year and a half, two years ago to basically rebuild Aurizona in Brazil and work together on multiple projects in the past. 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. I think the team and talent we've put together with the support from our major shareholders is second to none in this space. 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 blather that we have to put up. Obviously, we'll be making forward-looking statements today and seek safe harbor on these. The next slide is an interesting one. This is a very personal slide for me. This is a picture taken from 1988 on a snowy field in Northern Ontario with my very first company, which is Equinox Resources. We built a gold company. We had two 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 that was the end of that company after nine years. It was a nice company.
I made a lot of mistakes. I hopefully didn't make the same mistakes building all sorts of companies after that that I've been involved with. We're going to try to apply the things that worked well and not the things that were cock-ups, you could say, with all those companies with Equinox Gold. You can see where the name comes from. As I said when we already introduced the company, I'm hoping to bookend my career with Equinoxes, one at the start and one at the end. This is a company I'm very dedicated to, very passionate about trying to build into a really big company. I just have ultimate confidence we're going to get there quickly. Some of the companies I've been involved in, not all, this is an incomplete list, but I think there's 11 of them here.
Pan American Silver is a large silver mining company. Alterra was a large renewable energy company, which I sold earlier this year. Then the rest were a bunch of companies that were built up in the Luminex brand and all sold, other than Lumina Gold and Luminex, which are current producers. Then Anfield Gold was part of the three-way merger, which created Equinox Gold. 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 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 abiding, long-lasting value. It's a hard asset. It can't be demeaned. It can't be reduced in any way. It's something that's tangible. 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 in eternal use by human beings as a store of money, a store of value, and a thing of beauty. Because it trades on world markets, so it's clearly cyclable, and there's bull cycles and bear cycles, and I really believe we're in a bull cycle right now, notwithstanding the last six months or so of noise that has seen gold bounce around the $1,300 level very considerably. I still think we're very much in the early stages of a long-term bull market where the price will exceed the previous high of $1,800 set just six years ago or seven years ago.
This slide really shows 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, $1,240, $1,230 today? It's still pretty good in relation to the last, say, 30 years. For some reason, and there are real reasons, nobody seems to love gold equities. All sorts of reasons. That's unusual, and it's not going to last.
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 can buy these cheap gold equities at the bottom of their value for the last many years relative to the gold price?" That's what's going to have delivered the best returns to investors instead of buying physical gold or other equities. At some point, 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.
When that happens, we are going to be ready, and 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 growth is slowing. This is well known. Grades are dropping. Not a lot of new mines are coming on stream. These are all things that are the 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 American and Canadian stock exchanges. A little money moving into the gold space is going to make a huge impact on the value of these companies. That's the overall market. The next slide is an example of what we did with Pan American Silver. The only reason it's up here, it's not particularly to promote Pan American, although it's a great story. It's really to tell you what I'm hoping we're going to do in Equinox Gold. We're not going to do it in 24 years. We're going to do it in, say, three years, three or four years.
What Pan American did was slowly build up its production and therefore its balance sheet, its income statement over time. Over all those years, it operates seven mines, and it's really become a solid company, multi-billion dollar value, tremendous balance sheet. That's really the model for Equinox Gold. As I said, instead of doing all that rapid growth in 13 or 14 years, we're going to try to do it in three or four years. That's our plan. We're hitting on that plan right now. Every single week, we're delivering on that plan. I'm going to ask Christian to go over some of the things in more detail about what we're doing in Equinox Gold on the operational basis. You'll sort of remember that strategy, the mission of building ourselves as a large. There's no limit to upside.
We're going to be as big as we can. Large, profitable gold producer delivering 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 going to really try to be famous for. That's what we're planning to do quickly.
Okay. Thanks very much, Ross. It is funny, when this merger came together, we had the exact same strategy, I'd say, as Ross did and some of the others that obviously have backed this company. 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. I think on this slide, on 11 here, it just starts to show the beginning of that process here. We now have a multimillion ounce reserve after the Castle Mountain PFS came out a few days ago. It's almost four and a half million ounces, so it's grown 365% in the last week. Our production profile, just from these two assets alone, does take us into that mid-tier space of three to 400,000 ounces of annual production.
That's a pretty meaningful company coming from two good-size mines and two good mining jurisdictions. We're off to a start with these assets. We have the capital to build Aurizona and get this growth engine going this year. I'll walk you through sort of what we're doing on the ground to get that going. When you look at slide 12, just puts it all in perspective here. We're in the Americas right now. Our two core focus projects are Castle Mountain and Aurizona. When we came together, we had a number of other projects, and we'll talk about what's happened to those, but these are the 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 have come into production or been bought out.
There aren't a lot of these around. We have two of them, and we think we're in a pretty privileged place. We're pouring gold at Aurizona by the year-end this year. I remember when the management team, we came into Aurizona, we had about $2 million or $3 million in the bank, and the plan was to pour gold at the end of 2018. We're on track to do that. We put our own money into this, and now we've got Ross's support and other shareholders, and it's a nice track that we're on. If you look at the shareholder base here in the bottom right, I think it's worth pointing that out, is 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've put in $5 million to $6 million, which is meaningful money for us.
None of us are independently wealthy as individual managers. We put skin in the game here. If this company's successful and you're successful, we're going to be successful. We're in this together. The institutional base 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. I want to turn over to 13. I just wanted to hit on some of the things that have been achieved and just stop on this slide for a second.
I look back and I go, "Wow, what we've done this year on the ground." I know the share price at the moment is 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 strong conviction here. When you look at our core gold assets, we brought Aurizona into the portfolio through the original merger with JDL, brought Castle in with a three-way merger. Two core gold assets that we think are special and will have very long lives. We're moving towards production. Aurizona has 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.
Marc's done a great job with the team in pulling together the pre-feasibility study. Now it's a definable project with a $400 million NPV that's sitting on our balance sheet and a 16-year mine life. We're looking to commission that at the end of 2019, one year after Aurizona. Two mines within the next 18 months. You look down at exploration, and this is the part that actually we get goosebumps about sometimes when we go down to sites, and I think actually part of the reason Ross got so excited as well. Scott's been the key spearhead in this, and if you have any questions, please ask later. Aurizona, it has a seven-year mine life right now, 150,000 ounces a year. When we went down to site, we really could see the potential there. There's 2,000 sq km 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. 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 pits, which I'll show you later, also some new areas. Also we're looking underground. We think we can double this mine life, maybe even triple it. Just give us a little bit of time here as we ramp it up into production. We'll show you how we're going to do that.
Double the size and double the mine life.
Okay. We're going to go faster and bigger. Castle Mountain, it's already got 16-year mine life. We will drill there. It will grow, but it doesn't need to be tomorrow. We've got a little bit of time on that one. Non-core assets, we said when we did this merger, we were going to spin out assets. We're going to create some value through making sure people recognize those other assets, because right now they're only paying for the two gold assets in our portfolio. Coricancha has now been sold. That was executed. That'll close in a few weeks' time here. Obviously, the spin-out for copper has now been approved. That'll happen on around August 3rd. No one, again, is paying for those shares, and we can talk about Solaris later. We talked already about insiders being fully invested.
We've continued to put our money into the company. Even last week, I think Ross bought another 1 million shares. I bought another 120,000. I know a bunch of other management board members did. We continue to invest in this and believe in the story. Another thing that I think makes us a little bit unique is there's some real financial discipline in this company. If you'd listened to Paulson at the Denver Gold Show, they're ranting and raving about management excess and that this is not one of those companies at this stage. We're going to make money. We're going to earn our keep, but we're going to do it alongside shareholders. We're not going to take the money out of the company before we prove ourselves. I think this company's off in the right direction.
When you look at 14, I mentioned this earlier, we got two unique projects coming into production in the next two years. Who else has this of a scale of our size? Forget the majors in that right now, certainly of the smaller companies. I think it's something that's unique in this space because there hasn't been enough exploration to bring enough development projects through. We love having these in our portfolio. Diving into the individual assets here on page 15, Aurizona, you can see a picture. If you study it, you'll know there's been big change at this site here. You've got all the front end of the plant being built, I'll show you that, a couple of photos in a minute here. This is 140,000-150,000 ounce producer at sub-$800 all-in sustaining costs. That's a really nice mine.
It'll produce nice cash flows, it has lots of upside. When you look at slide 16, the construction progress, we're really pleased with how it's been going. We've been working away here. Officially, we started construction at the beginning of this year, 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 there. Also, you can see the big crushing wall here in the bottom mill part. That was a really major task, and it's a lot of concrete. That is now poured and done. That scaffolding, I think, is all gone as we speak today. We've let a new mining contractor in called U&M, and it's done a fantastic job on the mining so far. A lot of those key pieces are in place. We've basically committed to our key equipment and costs, now it's about execution and building this mine and the rest of it.
We should be commissioning in Q4, a few months away now. The exciting part is on 17, 18 here and the upside. If you see Piaba, it's a nice sort of sausage-shaped pit. It's got a 1 million-ounce reserve. That's a 7-year life. There are a lot of ounces underneath that. 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. 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 200 meters deep. You go down to 600 meters, every single drill hole hits the same mineralization. There is an underground mine potentially here that is really exciting and significant.
I guess how I would describe this, it's not a property, it's a camp. By that I mean, it's a very large land position that's held by the company that over time, over the next five, 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 Piaba Trend, the Tatajuba, Piaba North. There's a couple to the south. There's all those gold trends off to the east, you can see on the slide. That's just the surface. All those areas in pink are areas that have been historically mined very shallowly by these garimpeiros, these local miners that look for gold nuggets on the surface. They define these trends, these big trends.
If you connect Brazil with Ghana, it is a perfect fit. Ghana, of course, is known as the Gold Coast, has these huge, huge long-life mines. That's what we have here at Aurizona. It's going to be 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 Piaba, 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. We'll come out with more information on that as 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. I think we'll give some people some interesting information.
Exciting.
Exciting information that has been a long time coming. When we look over on slide 19, turning over to Castle Mountain in California. Marc Leduc's been spearheading this and done a great job. It's a 3.6 million ounce reserve. Wow. We have 1 million ounces before that. That really changes the game for us. A 16-year mine life. Where do you get that? It's not that easy these days. 200,000 ounces of annual production for the phase two of this project and sub-$800 all-in costs fits perfectly in our profile. Both of these two mines are past producers as well. A lot of those historical questions, we know some of the historical problems, and we know what works well, so we can adapt to that. 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 going to build this in two phases. In 2019, we'll build phase one. It'll be about 45,000 ounces of production. It'll be run-of-mine, simple, cheap, $50 million of capital, easy to finance if we need any of it, and basically, it'll be up and running around the end of 2019. It's got an ambitious timeline, but we've got all the key permits in place, and that's really important in California, obviously, because this is a past-producing mine. Phase two will take a couple of years to permit. 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.
We're giving Marc a couple of years here to work on that, and we could be producing 200,000 ounces within a few years of actually getting this mine up and running. When you look over at 21 on Castle, we've talked about some of these numbers, but the cost base is what's pretty exciting. It's a pretty simple technology, run-of-mine, dig it up, go over and put it on a leach pad and some plastic. The plant is pretty simple. We'll have a mill there as well. This is a run-of-mine heap leach, but it'll be a small mill, 2,300 tons a day, so relatively cheap in terms of capital. The mining, it's a big earth-moving exercise, so it's important that our mining is obviously efficient, so $1.40 a ton.
On 22, we won't dwell on this one, there's lots of exploration upside, I think Scott could probably go on this one for a while if you have questions later. You can see the JSLA Pit there and our potential super pit or large pit there. That's where the ore body is. That's what we'll be mining. There's already been some channel sampling on the east ridge there, a little bit of drilling outside of the resource shell. You look at those call-outs, that's double our reserve grade. Right there at surface, that could be a meaningful difference. Again, we'll do some work on that over the next year or two. Then there's other areas like Northwest Rim, which is exciting, there's some early interest up there. 23, looking at the actual growth trajectory for the company, the potential valuation.
We look at ourselves as trading in that sort of 0.4, maybe 0.45, depending on what analysts are estimating for our valuation range, price to net asset value. It's a reasonably low valuation. I know the market's a bit depressed, as we move up the scale in terms of small producers and mid-size producers, that is definitely not the multiples they trade at. Without the gold price changing, without any dramatic change in this company, we will be a producer come early next year, we'll have a nice development pipeline. We certainly expect to see that valuation change. It's an interesting time to get involved in this story, again, appreciate all of you who bought our shares. We see this is going to be an exciting ride that's really getting going now.
When you look at 2024, digging into the value a little bit more and looking in a different way, as of last week, we can now talk about Castle's value. We've got two projects with over $600 million net asset value. That doesn't include any exploration upside for either project, there's a lot of identifiable upside there. It doesn't include Solaris Copper, which we own 40% of. It doesn't include Anfield Gold. It doesn't include Coricancha, we just sold. In a way, you look at this, you're trading at a discount on this basis as well, there's lots of potential upside. Forget the gold price. Then turning over just before we conclude, I did want to mention a few words on Solaris Copper. We are spinning it out. We're being true to ourselves. We're a gold company.
We do have three 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. The one that we're really excited about is, we're in Sidon in Ecuador, which Federico's been working on the last four or five months, this is a copper porphyry. It's been explored, probably about 15% of the property. I think it's 24 or 30 holes. It's 2 billion pounds of copper already.
13 holes.
13 holes, it's got 2 billion pounds 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 and exploring. Federico's been doing a great job with the local communities, which has probably been the key change down in Ecuador. The government's been very receptive to mining recently, and now it's working with the communities to get the access agreement, he's been working on it and spending a lot of time down there. We hope in the next number of months here, we can unlock that. We'd love to be drilling in the first half of next year. It can take a little while to get these agreements, we're on a good track now. That could be the first catalyst.
Just to follow that thread, I was talking about that earlier. That's why we're keeping it private for now. We have authorization to spin it out now. We're going to do all that work to actually create the vehicle. It'll be held by every single one of the current Equinox shareholders, proportioned to what you currently own in the company. The timing on taking it public will be when we have Aurizona really ready to go. We are assured of getting great results at Aurizona. We have this fabulous exploration project in Chile called Ricardo. We are likely to be signing a joint venture on that shortly. Then we have Cerro Verde, or pardon me, La Verde in Mexico.
We've got these big assets, 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, I think you'll see 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, so far so good. We have a pretty good visibility on getting going on drilling late this year. At that point is when we'll take the company, we'll take Solaris public, it'll be a very easy thing to do.
It's just a few mechanical things to do to actually have it listed and going in the next year, it'll be a proper public company.
When you look on 26, it is a reporting issuer, 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 going to save the money on that as well, which is a nice little thing 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, and with the key people behind it and David Lowell. It has some momentum, but it'll be kept quiet, and we won't let others get these assets for free, in a sense. If we ever use any equity 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. I think there may be a few questions on this, I won't go through it in a lot of detail. As Ross said, we want to build here, starting out a mid-tier company, but a large gold company. We've got two foundational assets that will get us there. The goal here is to diversify our risk, have multi-assets, multi-jurisdictions, and Pan Am Silver is a great example. David and I helped build Endeavour Mining from zero mines to five, we plan to do it again here. We've got the two core assets to start out in good jurisdictions. We've got financial support. We've got key insider ownership.
We live and breathe this company and these shares, we're really excited, I'm really enjoying working with the people and just want to say thanks to the management team here, too. They've put in a heck of a lot of work over the last six and a half months, probably a couple of years before that, before Ross was involved. I need to remind him of that periodically. Things are off to a good start. We're really happy with how things are going on the ground, people will not be able to ignore the story, I think, coming into year-end. I think I'll hand it over.
Thank you. Thank you very much, Christian. I think that's a great wrap on what we're doing, a little bit about our mission, our strategy, and just look for more and more good news coming out for the balance of the year. Lots of milestones, lots of wealth-creating events, and ultimately, as I said, the market will take note of it and start to bid the price up, which is our best reward for what we're doing. Rhylin?
Thank you. 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 one 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. Do we have any questions from the room to start? Kylie, there's one at the back there.
Yes.
Hi, it's David Melick 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. We have the strategy of building ourselves into a large gold-producing company. That's the overall overarching strategy. How do you get there? How do you get there quickly? You get there by developing your existing assets. We have these two cornerstone assets, Castle Mountain and Aurizona. Each is capable of producing a quarter million ounces a year, or 200,000 to 250,000 ounces a year over the long term, meaning over more than 10 years. That's a pretty significant objective by itself. We also have a desire to grow by acquisition, and we mentioned that right at the start when we announced the merger. Yet so far we haven't delivered on that. It's not for lack of trying.
We have made offers on three mining companies, current producers, because we think right now at our scale, an existing producer would bolt into these two big development projects really, really well. It would tie in really well, give us a decent income statement today, increase the size of the company, get us a different rating. We've been really working on that strategy on the M&A side. Of course, we are also sort of a frugal group, and we aren't interested in growth just for growth's sake. We're actually trying to make some money. The acquisitions 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 that have said no. The ones we've bid on, we haven't been successful in. There's interesting reasons for that.
I wouldn't say anybody necessarily has, these are certain targets that we think fit us really well. For one reason or another, we haven't managed to conclude deals. We are still working on a couple of projects really actively. I would say, watch for news. It's still a pillar of our strategy to try to acquire good deals, particularly now, because we think really it's a buyer's market right now, and if you're a buyer, you're really going to get great value. There's a lot of distressed companies. The market has disappeared for a lot of these smaller gold producers. I described already that I don't think it's going to last for very long, 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.
We're not going to overpay. We're not going to do a stupid deal just for doing a deal, and we'll see what happens. That's all I can say on that.
No follow-up questions, Dave? You always have a follow-up question. Well, we have the moment. We have no questions on the phone and no questions on the webcast, we're doing pretty well. You guys must have done a very good job explaining things. Oh, you have. All right. Where's Kerry Smith when you need him, eh?
Yeah. Just on exploration, I know it's important to You're in the development cycle. You're developing a couple of mines. You obviously like the exploration a lot. Maybe if you could expand on how you're kind of balancing building while exploring.
Well, if I could start, maybe Christian and Scott, you can add to that, it is a balancing act because we don't have unlimited money. Every penny we spend, we have to raise at this moment by selling shares or borrow them. Neither of those is terribly palatable if you think your share price is going to be higher or if you think you don't want to over-leverage the company. 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 Castle Mountain, for example, either by equity or by debt or a combination.
We have great ambitions for exploration programs. Wait until you see some of our plans in Aurizona. I think we'll roll out some pretty interesting results in the next quarter at some point. Along with those results will come a need for more capital to advance those really awesome opportunities we have. We will need more capital than we have right now. We've got enough to build Aurizona. We've got enough to do what we're doing at Castle Mountain. Of course, we don't have unlimited money at this moment, and we will have to raise more.
I think until we are in production, increasing cash flow, we want to be really careful. It's the hardest thing to do is to starve Scott of money because I think he can actually make a huge impact. I don't know, Scott, you want to just comment. A couple of things you're doing that are impactful, we're not spending a lot of dollars on it at this stage. We're getting ready to, if we need to.
No, exactly. As we de-risk the building of Aurizona, more money's going to trickle towards exploration. It's a bit of 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, a couple of kilometers long strike. You saw earlier in the year us hitting 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. As funds are freed up and are 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 Zeitzer, a shareholder.
Yes. Thank you very much. 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 Warke was the predominant, the largest shareholder. When the merger was announced, it was said that he stayed on as a strategic investor of Equinox Gold, but he's not on the board. My question is Richard Warke still involved in this company, and is he still a shareholder?
Yes. A very simple question. If you didn't hear it was, is Richard Warke, who was the principal shareholder behind NewCastle, still involved in Equinox Gold, and if so, in what way? I can tell you he is a shareholder of Equinox Gold, and I would be almost certain in this, although I haven't asked him, but he owns every single share he originally owned, and I think he actually added to his position just recently. That's from a shareholder standpoint. In terms of his involvement, I can also tell you, I speak to Richard two or three times a week regarding Equinox business. He is extremely involved, extremely engaged, absolutely involved as a strategic advisor to the company, 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 a listener online. This is about Warintza. When do you think you'll be able to start drilling at Warintza, 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 Warintza, and I think we could probably summarize where we're at on that. Hop in.
I think our hope and our plan is really here to get an agreement, an access agreement this year so that we're ideally drilling, if all permitting and all that goes well, in the first half of next year would be the ultimate goal. There is some flex in that timeline. Obviously, we'd prefer it to be end of this year, but certainly, early parts of next year. We set ambitious timelines, but I think we've done that for all parts of the company, so it should be treated no differently.
With Warintza, we're really trying to step back, I think, and come at it with modern, basic principles. The very first one 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 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 about a we, and trying to help the community, provide jobs for them, provide a long-term sustainable income. With Federico's involvement actively, he's down there all the time. I think we're hitting those targets pretty well right now. End of the year, early next year, that's the timeline.
Thank you. Are there any other questions from the room?
I thought there was actually a comment or question.
Yeah, I have one. My name is Don Lee. I'm a shareholder.
Oh, you got the mic. Okay, great.
Just wondering, when Solaris is spun off and a value has been established, what will be the tax implications for shareholders?
Tax implication for shareholders.
For every shareholder, it'll be different and individual. Depending where you are jurisdictionally in the world and that, it'll be different and how your structure is set up. I think generally for most people, it won't be a taxable event. I can't comment on each individual. Particularly, if you do have a specific question, I think it's best to send it to us and we'll address it for you.
Like a Canadian.
Yeah.
Wasn't there a fair bit of discussion on that in the information circular?
There is, yeah.
Susan, maybe 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 info circular itself that talks about tax consequences of the transaction. For the most part, I can't speak for people, but it shouldn't be big consequences for anybody. It does depend on where you live.
Thank you.
For a Canadian, would that be a zero cost base then when it's spun off?
Yeah, you'll need to seek advice from your tax advisor for that. We really can't provide too much detail about that. I understand that there was a follow-up question to the Warintza exploration question.
No, there was another component to that question for seasonality.
Oh, sorry.
To the seasonality, you can work all year round at Warintza, no problem. You're in the jungle, so it's always damp, and there are two rainy seasons, May, June, and October, November are particularly damp. You can work year-round.
All right. We have a question from an online listener. It's a two-pronged question. I'll give you one. Phase 2 of the project requires further permitting. Can you please provide an update on your progress?
It's referring to the Castle Mountain project. Phase 1, we have a permit for, it's a past-producing mine. We've got an area of disturbance, an EIS in place that we work within. For phase 2, we're going to plan to work within the exact same footprint effectively, but we do need to disturb a bit more area, and it'll be a larger project. We are starting, and Marc's starting basically as we're doing phase 1, the permitting work, all the baseline studies, et cetera, to get the EIS upgraded, amended. Certainly, our view is, 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 U.S. to go through the permitting.
We don't see any red flags, it'll take time, there is a little uncertainty on the time. We've got a plan in place and Marc's already on it.
Just the second part of the question was, I think you alluded to this, we had a really great map in the Castle Mountain pre-feasibility results, which is July 17th. We webcast that, it's on the website. He's just asking about whether we're going to have to increase the size of our land package and encroach on the surrounding monument.
No. Marc's already shaking his head here, no, we don't. I'm thinking of the map, it's got a green line effectively on it. It's our EIS area. 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, that's what the plan is. When you look at and fit the maps together of Marc's new plan, it still fits within those EIS boundaries. We've made sure that we can work within what we already have on the ground. We're not going to be in the monument or the preserve, I think that's probably the key crux of the question. That's a good point.
We do not need to work in the monument or the preserve to deliver a 16-year mine life at 200,000 ounces basically a year.
All right. Are there any other questions from the room? Yes, one there.
I'm Carolyn Gilbert, a shareholder.
Okay.
Carolyn Gilbert, a shareholder. When the Solaris shares are made available, how will warrants be also made available?
Are they automatically attached to the shares?
Yeah.
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've normally, but instead, you will get one share of Equinox that you would've been entitled to, and you'll get one-tenth of a Solaris share at that time. You don't have to do anything at this stage. It's just going to be at the point that you go to exercise.
There will be a Solaris warrant.
Yes.
Yes.
Not a warrant.
It's a subtle difference. You still will have your existing warrant.
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 the one-tenth of the Solaris share.
Oh, okay.
You are not going to be issued a new Solaris warrant. What happens on the warrant side of things is that when you exercise, you get Equinox and you get Solaris one-tenth.
Susan, just to be clear on that, because some of the Equinox warrants trade
That's correct.
If you bought those Equinox warrants and then ultimately exercised them, you would end up with a proportionate share of a Solaris warrant plus your Equinox warrant.
For those warrants.
Yeah. Yes.
For the tradable warrants, you'll end up with one Equinox share and one-tenth of a Solaris, just like any of the other warrants.
Which is a proportionate.
Yes. Proportionate.
Good.
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.
Yes.
We've got one at the back, Steve. First. Thanks.
Emily Davies 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 wouldn't say there are, and I'll say why. If you think about these companies, there's a very significant difference between building an exploration company that's in the business of exploring, quantifying and selling its asset to some bigger company. The Lumina Group were involved in these huge copper deposits that required billions and billions of USD to build. That just wasn't the business plan of those companies to finance those things and spend the four or five years to go through the permitting purgatory and all the stuff needed to build those huge mines. Those companies, the mission, the strategy was to sell those companies. With Pan American and with my first company, Equinox Resources, and with the energy company, these were producing companies.
These were companies with operations, with lots and lots of employees, with a good income statement, with a balance sheet that paid dividends. That's what we're trying to do with Equinox Gold. Over the long term, I hope if we do this right, that Equinox will live longer than I do and be worth a hell of a lot more.
All right. We had a question in the middle of the room there, please.
Yes. Just wondering if there's any updates on the Lumina greenfields area with Anglo.
Do you want to share?
Sure thing, Scott. We continue to advance number of targets. Anglo's cumulative expenditures to this point are somewhere in the order of nine and a half million dollars. It's a challenge, but they are making good progress. They've had to come in from a clean, fresh start with no infrastructure, no setups. They've had to establish camps, base of operations, put all their big company systems in place. We've done the airborne geophysics. There's been a lot of work reprioritizing large tracts of land. On a much bigger scale than I am challenged with at Aurizona proper, there's where you want to go, then there's where you can go, and there's where you have to go.
Where you have to go is, with permits expiring, that sort of stuff. 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 to get to a positive final exploration 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, your access agreements. There's targets that we just aren't going to get access to. They continue to work diligently on the ground. We hope to be giving a bit more of an update here in short order.
The only overlying comment I'd say to that is they have changed their whole greenfield approach globally. Their head of exploration, I think he was based in Perth, is gone. Their Brazilian head has moved on. Also, they've sold a lot of their greenfields in Colombia. They've certainly de-emphasized it. We hope they'll keep committed, but you never know. They're spending $9 million, $10 million on it. We're getting all that work and geophysics for free effectively, which has been really good.
Okay. We have a question from an investor in the U.S. 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 even jurisdiction. We are able to screen fairly effectively. The size is something in the range of 100 to 150,000 ounces or plus or minus, in operation today or quickly could be scaled up to that. That's the size. The overall cost in the range of a couple of hundred million dollars. That sort of size, which would be funded through a combination of debt and equity and potentially other means. In terms of location, my personal trap 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 Argentina, that main area. However, Christian and his team from Endeavour Mining, that whole success really came out of West Africa.
We have 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 gold mining companies in the last 10 years. I would not exclude something there, although it wouldn't be my first choice personally. 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 a company there. We didn't succeed in it. Actually, nobody has yet. I don't exclude it, but it's definitely not part of the plan. Clearly, the two jurisdictions, the United States and Brazil, would be even more preferred, I guess, because we are already there and have all of the human resources, infrastructure to be able to capitalize on another acquisition in those locations.
It's also true that diversification, I think, is a very good strategy for us, a third jurisdiction would be okay, too.
All right. Are there any other questions from the room? One at the back.
Yeah. My name is Teal Linde. I'm manager of Linde Equity Fund. 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 it to the office, "Hey, everybody, you got to watch this." In it, you provided a demand case for silver and that 10% of the demand-
for silver is now for photocells-
it was 0% maybe a dozen years ago. You made the case for copper being a sort of an energy metal.
I'm just wondering, I appreciate that gold equities have been beaten down and there's an opportunity there, but I wonder if you can comment on what your thoughts are in terms of a demand case for gold that would sort of support or raise the price going forward.
Well, the demand case for gold is 3,000 years of human history. It's, of course, cyclical. There are times when there's more demand and less demand. Gold is money. Gold is really the ultimate store of value, I think. That's been proven by, as I said, 3,000 years of history where it's maintained its value despite paper currencies continually being devalued and devalued and devalued. Really, I don't see anything different today. There's an immense amount of devaluation of paper currencies happening. U.S. debt particularly is going up and up and up. Global debt, generally speaking, is increasing. Inflation is on the verge, I think, of returning. I think whether you have a devaluing U.S. dollar, you're going to have a strong gold price. Whether you have increasing inflation, you're going to have a strong gold price. Neither of those has actually really happened yet.
The dollar is still strong. It's just being chipped away at right now. I think that's why you're seeing a little bit of movement in the gold price the last couple of days. I don't know when it'll happen. It might be tomorrow, it might be two years from now. I just don't know. I am very strong in my conviction that gold will return as an asset of demand by financial investors as a store of value. When that happens, you'll see a rapid rise in the price. It's bumped up against a 1,350 ceiling five or six times in the last year or so. It'll get through that. It'll run to $1,400, $1,500 an ounce on its way through the previous high of 1,800.
As I said, when it happens, I don't know, but we want to be positioned as having great and growing and greater leverage to the price of gold for that exact time when it happens. I go back to my silver company, back in the time when I started in 1994, I was sure. I looked at the demand supply fundamentals for silver, they were not dissimilar to gold today. I was sure silver was going to be double its value by the end of the decade, six years later. Well, it was actually lower than it was in 1994. It went down, not up. I was thinking, it's challenging, all these certainties that I had. Then it rounded to $44 an ounce from four. I can't predict when, but I have conviction it will happen.
When the bigger financial markets crack, I'm sure they will, you'll see a big correction, particularly in the U.S. markets. When that happens, I think that's going to be very good for gold, particularly on a relative basis. 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 through exploration success, building good mines that run well at any reasonable gold price. If we have this happy occurrence of gold going up, that's just going to be icing on the cake. That's really been the story of my other companies. I just don't see what's wrong with the model we have. It's going to happen, and I hope it happens quickly.
Far, seven months in, we're doing pretty well hitting our targets, I think you're going to see that continuing solid growth. Simple plan, simple mission, well executed. You're going to end up with a greater shareholder value by the end of that.
I think we probably have time for one more question because I promised Ross I'd keep it under an hour. Anything else from the room? All right. I'll pass it over to Ross and Christian for closing remarks.
Anything to say, Christian?
I just want to say thanks for all your support as shareholders here over the last few years, because some of you I know have been in this room several times. Building a business isn't always a sprint here, and unfortunately, financial markets expect that. 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 young company on a big adventure to build a world-class company. Thank you all.
Thank you for joining us today.