Up next, we have Ryan King, EVP of Capital Markets for Equinox Gold. Canadian mining company has a strong foundation of high-quality, long-life gold operations in Canada and across the Americas, and a pipeline to development and expansion projects. Ryan's got over 15 years of experience in capital markets and the resource sector, and I'm looking forward to another presentation from Ryan. We chatted last time pre-merger, so this is an exciting update. Ryan, how are you doing?
Hey, Arlene, good. How are you doing?
Good. Are you really in front of a truck right now?
There you go, man.
Awesome. I'll bow out for about 10 - 12 minutes, and then I'm sure we're going to have a lot of questions from the audience to run over.
Cool. I'll share my screen here. See if I can do this. Let me know if you can see this okay. I'll try to go full screen too. Yep.
Yep, we're good.
Okay, cool. We got about 15 minutes?
Yep, fire away. 15 minutes.
Cool. Okay, so, yeah, thanks everybody for taking the time to, first of all, come to the Kinvestor Conference. I know it's all virtual, but I appreciate everyone's time to come and listen to the presentations here. We're going to talk a little bit about Equinox Gold. We trade on the TSX under the symbol EQX. We also trade on the NYSE, which is listed in the United States, under the symbol EQX. I would say out of both the exchanges, we trade a significant amount of volume on the NYSE to the tune of, I think we're averaging between 10 million and 15 million shares a day. There's a significant amount of liquidity. It happens on both exchanges, but there's a significant amount of liquidity that happens on the NYSE. Who is Equinox Gold? Equinox Gold is a multi-asset gold producer.
We're in a very key inflection point within the business that is going to lead to Canadian production and cash flow growth. I will be making some forward-looking statements. We do have this presentation on our website, so please do take the time to read through those forward-looking statements, but we will be making some. I'm sure everybody would be a little disappointed if we didn't. Okay, high-level overview, Equinox Gold. First of all, I think it's really important. We are a company now that is very focused on delivering a top quartile valued gold producer in the sector. What are the key components of that? From our perspective, and it's probably no surprise to all of you, but it's quality high-margin gold assets.
High margin in this environment is not too difficult, but we would like to have a very sustainable asset portfolio that can operate in any gold price environment, located in Tier 1 jurisdictions. The majority of the portfolio for Equinox Gold now today is located in Canada, United States. Importantly, I think this is very critical, is building confidence in our product, building confidence in our ability to deliver into expectations, and that's an area of opportunity for Equinox Gold. That also is a key metric in the definition of a top quartile valued gold producer. I won't go through this in too much detail. I think probably a lot of folks that are watching this now have heard of Equinox Gold, but we've reset expectations earlier this year.
As Arlene mentioned, we just completed a merger with Calibre Mining, of which I was an executive with, now executive with Equinox Gold as their Executive Vice President of Capital Markets. We reset expectations, and this year our guidance is 785,000 ounces of gold produced to 915,000 ounces of gold produced. This does not include, importantly, this does not include Equinox Gold's new Valentine Gold Mine located in the central region of Newfoundland. As you can see here, with the chart on the right-hand side, but also in the points, we're ramping up two new Canadian assets, two new long-life assets in Canada that will lead to increased Canadian gold production, as I just mentioned, but also importantly, increased cash flow from operations. Very exciting time for the business.
First gold from Valentine was a month ago, and we are seeing a very successful, effective ramp-up there at Valentine, so an exciting time. The company does have debt. We've got about $1.7 billion- $1.8 billion of debt, sitting at about $1.3 billion of net debt. This is a period of time for the company now where we have been in capital investment mode over the last several years, but now we're transitioning to a cash harvest and deleveraging position of the company. It's an exciting time. Given that and given the rapid deleveraging we could see with these current gold price environments, we would aim to return capital to shareholders. That's another opportunity for rerating within the next 12 - 24 months and potentially sooner, all dependent on gold price, our ability to deliver, and then deliver the balance sheet.
Keeping with kind of the theme of a top quartile gold producer, we've talked a little bit about these metrics: Tier 1 jurisdiction, substantial long-life assets, free cash flow, operating track record. We know Agnico Eagle is a top quartile gold producer. Everyone is familiar with that name. I think a lot of people are also familiar with Alamos Gold, a very well-known top quartile gold producer on the TSX and in the United States. Well-known names. Not as well-known, maybe, is Equinox , but we can paint the picture here now for meeting a lot of these key metrics to obtain and get to top quartile valuation. We believe we're on that path.
We are, based on the management changes that have happened, on the tiering up of assets, and predominantly now North American focused NAV, we will be able to meet some of these expectations, but also become a top value quartile gold producer upon the delivery of production in these assets. An exciting time for the business. We've got organic growth. We traded at a significant discount, as you can see here, based on a price-to-NAV basis, based on an EV to production basis. These are current metrics. As of October 15th, reflecting some of the changes we've all seen in the gold sector in terms of share price performance over the last few months and quarters. A couple more metrics here.
I've already gone through some of these in a little bit of detail, but broadening the scope a little bit further, you can see on a price-to-NAV basis, we trade very low versus a lot of our peers and particularly the peer average. In my view, this paints an opportunity. You can see on the right-hand side, EBITDA growth, again mentioning the fact that Valentine, this new asset that will produce between 175,000 ounces- 200,000 ounces on an annualized basis, is just ramping up and not included in 2025 guidance. Again, presenting the opportunity where we trade on the low end of valuation versus peers, and we've got some of the best EBITDA growth over the next couple of years.
I'm sure there's a few folks out there that have looked at share price charts and looked at a number of companies and said, wow, a lot of these companies have moved quite significantly. Particularly, over the last three months, Equinox Gold has performed very well. I believe, as you can see here based on this chart, that it could be the beginning of a larger rerate opportunity for the company. If somebody wants to get into more details as to why this is the case, please feel free to reach out to us, equinoxgold.com, go to our website. My email address, ryan.king@equinoxgold.com, we can talk a little bit more about that. In my view, in our view, it has a lot to do with over the last few years not meeting expectations.
We've got to work through, we've got a new operating team and leadership in place to work through meeting and beating expectations and building confidence in this product so that, over time, we will be able to attract a higher valuation. I believe that that is, we're just starting that now with the closure of the Calibre deal, Darren Hall becoming the Chief Executive Officer, David Schummer becoming the COO or Chief Operating Officer. We believe that will lead to building confidence in our product and a higher share price performance over time. Let's talk about some of the assets in the portfolio. I have already talked about this year's 2025 guidance. We're on track to meet the midpoint of this guidance. An exciting time for the business.
As I've mentioned before, with the Valentine Gold Mine here, first gold a month ago, we actually just put out our Q3 production results. When I poll an analyst community of all of our different analysts, this meets, and in some cases beats, expectations for a consolidated Q3 production outlook. That is encouraging. I believe that we should start to continue to see that benefit as we move forward. Importantly, not included in that Q3 number, which was 236,000 ounces of production, is the Valentine Mine, which, this year, going into Q4, as it's ramping up, we've guided the market that we should be able to produce between 15,000 ounces- 30,000 ounces over top of this official guidance that we're giving here.
That's ramping up, which will lead to a 2026 that would have somewhere between another, call it, 150,000 ounces- 200,000 ounces with the inclusion of Valentine into this overall portfolio. As you can see, growing Canadian gold production with Valentine and Greenstone ramping up, as well as, you know, that's going to lead to higher cash flows, particularly at these gold prices. It's going to be a very significant year in 2026 for the company, with an opportunity to rapidly delever the balance sheet. Getting into some of the cornerstone assets here a little bit further, this year we guided 220,000 ounces on a revised guidance. We guided 220,000 ounces- 260,000 ounces Greenstone. That is tracking. We would anticipate to probably be at the lower end of our production guidance, but we are seeing some very positive momentum going into Q4 as we continue this ramp-up.
I'm just flipping around a couple of slides here. I know there's a lot of text here, but what is important on this slide is the bottom text here. A few things that have resulted in some continued improvements that relates to mining tons, so mined material out of the pit, as well as grades starting to increase. For example, grade in Q2 was about 0.9 g/t gold in this very large open pit. You can see here at the bottom, grade increased, well over 10% in Q3. We started to see higher grades. The average grade through Q3 at the mine was 1.05 g/t, but in September, we got into 1.3 g/t gold. We're seeing the benefit of this grade profile starting to hit the operation effectively.
Valentine, again, I said this already, but 175,000 ounce- 200,000 ounce a year production profile, average life of mine there is 180,000 ounce. The first 12 years of the 14-year life, of the 14-year reserve life, is 195,000 ounces of gold a year. It's 2.7 million ounces in reserves, 4 million ounces in pit resources. We think there's good opportunity to potentially get into more material as we unlock the opportunity here and see actual results come out of the asset. What's exciting from my perspective at Valentine is, yes, the inclusion of this into the 2026 guidance and portfolio in terms of production and cost, but we're very excited about the exploration upside. We currently have five diamond rigs operating on this property.
For those of you who are a little bit familiar, we had a discovery at the end of 2024, which included drill intercepts of 172 m at 2.4 g/t gold, completely outside of reserves and resources. This would be a new discovery. We're drilling that now, and we would anticipate to have an update in Q4 of this year. It'll be exciting to see how these assets come in and what the opportunity is there for mine life expansion, and potentially leading to maybe a new mine plan that could lead to new opportunities at the asset. Very exciting time with the Valentine asset. Where does this put us in general? As I've talked about, over the next couple of years, these are analyst estimates as of now. You can see this is going to lead to an increased production outlook, potentially decreasing all-in sustaining cost profile.
Importantly, that could lead to rapid deleveraging of the balance sheet and then lead to a return to capital to shareholders. I would anticipate, we don't know yet what that looks like or the exact timing, but given these gold prices, you could see this happening very rapidly, potentially within the next 12 - 18 months. What could that look like? I mean, there's a lot of different scenarios, but I would say, you know, a dividend policy gets put in place or potentially a buyback gets put in place. We're not going to do that at the detriment of the assets. We will continue to invest in capital, in mine development, property and equipment development, but we will also invest in exploration. Some of the highest return on investment comes through exploration.
With this portfolio, I would expect us, guidance isn't officially out yet, but I would expect us to do somewhere between $80 million and $100 million of exploration spend in 2026. Equally as important as the production profile is the additional growth. We've talked about Valentine, but we've got North American growth potential as we work through permitting of Castle Mountain in California. We do have an operating mine in California, so we've got great relationships in the state. We are on a fast 41 track now with the Castle Mountain asset, which we have been told, and it is in legislation now, that we will get a record of decision in the second half of 2026, which could lead to a positive outcome. We would anticipate a positive record of decision, and then maybe a construction start if all goes according to plan in the middle of 2027.
By the end of 2028, could lead to another 200,000 ounces- 225,000 ounces of annual gold production. Great organic growth in the portfolio in North America. As well, we've got the Los Filos asset in Mexico, and what's exciting there is that could lead to additional growth as well. Lots of opportunity for growth within the portfolio, leading to the company is not looking for any acquisitions. We've got a lot of value to unlock from the current existing portfolio. I think Arlene's about to yank me off stage here, and that was the last slide. If there's a minute or two for questions, Arlene, I don't know, but, yeah, I'm sure that's a reasonable outlook of the company, and we trade at a discount to our peers.
No, that's an excellent overview. I do have a couple quick questions here. Any of your gold production is hedged at all?
A very small portion. We have a term loan and a revolving credit facility, but I think it's in the tune of 3,000 ounces, maybe a month. A very small portion.
Very small portion. Okay, what's the current status of the Los Filos?
Currently, Los Filos is a past-producing mine. It is on care and maintenance, and we're working through final land negotiation rights with a third community. We have multi-decade agreements in place with two communities. We're working through with the third community, but at the same time, Arlene, which I think is important, we're also looking at the potential technical viability or economic viability of a two-community plan versus having the full three-community plan, which I think could present an opportunity if we couldn't get to the third community surface rights agreements. On that path, we're actually drilling at Los Filos right now. Los Filos has tremendous exploration opportunities there. Remember, Los Filos, in all categories, reserve and resources, is over 15 million ounces of gold. It's the fourth largest gold deposit in the Americas.
Very quickly, regarding your grade increases at Greenstone, what was the predicted in the mine plan and what drove the grade increase?
Some of what's driven the grade increase is the operating practice. We were behind mine tons in Q1. I believe with the inclusion of some additional human capital, how we operate this asset has led to minimizing dilution, minimizing some ore loss, because this is a brownfield site, which has led to the bump up in grade. We were always anticipated to start to get, once we got caught up in the mining, we were always anticipated to start to see a little bit better grade profile coming into the mine plan.
Yeah, awesome. That wraps us up. I'm looking forward to seeing what your next quarter is going to be. I was just talking to Adrian Day last week, and he thinks they're going to be gushing with cash. I guess a big part of that is I don't know if we've seen much inflationary pressures on these gold mining stocks in the last six months, eight months. Right. We'll see when your financials come out, but I think that's going to be a big surprise to these generalists out there is how much money these gold mining companies can print.
Yeah, it's a good point. I would expect Q3 a little better than Q2. Q4 is a little better than Q3 this year. In general, we're going to have, I mean, to your point, if we don't have too much inflationary pressures, it is going to be an unbelievable year for gold producers in 2026, assuming we stay at this gold price level environment. Even if it goes down $500, it's incredible margins we have, right? Yeah, fortunate time to be in this business. I think there's a lot of opportunity for share price performance, not obviously not just Equinox , but across the sector. There's going to be incredible opportunities as more and more generals get into the space.
100% agreed. Ryan, thanks so much for your time.