Equinox Gold

[audience applauding] Thank you for the introduction. Good afternoon, everyone. It gives me great pleasure to introduce North America's new senior gold producer, Equinox Gold. I'm gonna step through just a few slides to give you a bit of an introduction to the company and give you some, uh, idea of our plans for the future and where we're going. So obviously I'll be making some forward-looking statements as I talk about the future, and you'll reference this cautionary language.

This first slide says a lot of things. Uh, first of all, it f- it points out that we are a Canadian-focused North American gold producer, producing pro forma basis full-year guidance over one million ounces per year. We also have organic growth, which will enable us to move towards two million ounces in those exact same four jurisdictions. Currently operating seven mines with the restart of Los Filos. Uh, I'll talk through the three mines that we have in Canada, the mine that we have in the United States, two growth projects we have there, the two assets we have in Mexico, and of course, our complex in Nicaragua.

Underneath all of that, uh, production and cash flow generation, almost fifty million ounces of resources that we can continue to convert into value for our shareholders. So I'm extremely proud of the company and the platform that we have going forward, starting from a very strong base of a million ounces and sequentially growing towards two million ounces, still focused in the four countries.

So the other thing that's an opportunity for investors right now is we have a lot of room to grow on the value perspective. As I mentioned, seventy percent of our NAV will be focused in Canada and the US. We think that's quite unique and something for investors to consider. We'll be building scale, but within the regions that we currently operate, which equals a manageable business. We have robust and growing, uh, Canadian production. As I mentioned, sixty percent of our, our centroid of production mass is in Canada with well, uh, uh, established production places like Musselwhite and the growing production enterprises that we have at Greenstone and Valentine as they continue to ramp up.

Predictably, we have strong free cash flow. We'll talk about how we'll invest that free cash flow in growing the value of the business, reducing debt and, and reducing the cost of capital, and finally returning to shareholders. We believe that we have an unmatched growth pipeline in a very central, uh, part of the world of North America. At eight hundred thousand ounces spread across a variety of projects I'll speak about, we can expand the portfolio without growing the share count.

Finally, in relation to our shareholders, uh, we will grow the pipeline without increasing shares, but we're also increasing dividends and purcha- purchasing shares back. Uh, we increased the, uh, dividend by fifty percent at the last quarter, and we will exhaust our share buyback program this year and increase it for next. And finally, across the jurisdictions we're gonna talk about led by a corporate team, we have a team that has a track record of finding gold, building mines, producing cash, and increasing value for shareholders.

Here's a glance at our in sequence growth pipeline on top of the over a million ounces we currently produce. We've already announced that we'll be expanding our operations in Newfoundland. I was at the groundbreaking ceremony at South Railroad earlier this week. That construction is well underway. We'll deliver that mine by the end of twenty-seven for production in twenty-twenty-eight. We'll step across the state border into California, build an even bigger heap leach operation at Castle Mountain, all the while doing the study work nece- necessary for considering our expansions in Mexico.

We have two opportunities in Mexico at our existing operations, both of them heap leach operations, one in Zacatecas, one in Guerrero, uh, that have incredible sulfide endowments below them, uh, that we will devise the best way to extract the most value from each. Some eight million ounces in Zacatecas and another eight million ounces in Los Filos that we will devise the best value creation strategy for our Mexican platform, likely doubling our production contribution from Mexico in time.

The last slide I'll leave you with is the five key takeaways I'd like you to think about as you're considering investment in Equinox going forward. We are now an absolute senior gold producer. Important, that scale, uh, for your investment consideration. Musselwhite certainly provides a st- stable base of production, but we're adding to it two brand-new mines in Greenstone and Valentine. Greenstone offering us considerable scale in Canada and Valentine offering additional growth.

Our organic growth that I just outlined on the slide before is not only internally funded but largely de-risked. Some of the projects on brownfield sites that we already have, all of it financed through our existing production platform, and, uh, and all of it will add value to the company in the years to come. And finally, I'd ask you to consider our, uh, proximity to our peers and the fact that we're an outlier on the value perspective. So our share price is on sale. I'd encourage you to buy now. Uh, as we increase value, you'll be the benefactors of that. And with that, uh, five key takeaways, I'll, uh, have a seat, and we'll answer some Q&A. Thank you. [audience applauding]

Where do you want me to sit? Here? Okay.

Well, thank you for the presentation.

Sure.

That was a great way to set the stage. Um, maybe just to drill a bit further on the most recent transaction, can you talk about the, uh, Equinox-Orla merger and why it was such a compelling business proposition to you and the team?

Yeah. I, I think, uh, you know, both companies, uh, were on a pace to, uh, to create, create value. Uh, both of us, uh, were, were already demonstrating delivery of that value. But the growth in each company, you know, uh, was gonna come in a matter of time and, and the combination of the two businesses immediately catapults us to that senior gold producer status, gives us a greater base of production and cash flow generation that allows, uh, us to, uh, to grow that value creation more quickly. And finally, we both had, uh, compelling, uh, growth opportunities in each company, and now on a combined basis.

And a question I get a lot is, how are you gonna sequence the combined, uh, portfolio? Hopefully, the slide that I just delivered give you some impression of how we're going to do that. Our intention would be to engineer, construct, and ramp up in sequence at any given time, uh, uh, one, one mine at a time. And in doing those, uh, in that staged fashion, uh, we'll create value for the years to come.

Great. [clears throat] And you've been president of Equinox for a couple of months. You will become CEO, congratulations, by the way, uh, at the end of October. Under your leadership, do you anticipate any changes to the broader strategy of the company, and, and how would you articulate that?

Yeah. The, uh, one thing I, I could offer that will change, I think the combinations, uh, that have occurred over the, the, the past several years, uh, to bring us to this state has set the stage for Equinox Gold to be exactly where it wants to be. So what I can offer probably will change is our appetite for M&A. Uh, we're where we wanted to get to, that plus million ounce producer, uh, with a growth pipeline that we don't have to acquire from others and cash generation to pay for it all.

Uh, so what we'll, uh, pivot towards is, uh, focus on execution and delivery. And what I mean by that is we need to continue, uh, to drill the ground that we have. We have four ve-very, uh, prospective jurisdictions, uh, across our, our sites that can deliver more gold. Uh, we'll need to deliver on our production commitments at the cost specified. And finally, we need to build well so that we can grow that, uh, production platform from one million to two million ounces. So our focus in the company going forward will be just to put our heads down and execute, uh, on, on the company as it stands.

Great. And, and you've mentioned that you've toured most of the sites during the first six weeks, uh, with Equinox Gold. What have you learned from those site visits? Where do you see the challenges? Where do you see the upside?

Yeah, I, I, I definitely have a perspective of learning from the ground up. Uh, so it's true. I, I've visited almost all of the sites now, uh, n-now f- you know, for the second or third time that I've been to those sites. And importantly, uh, the time that I've spent there has, has been to make sure that the team is focused on what they need to deliver. What are the targets that we need from each of the assets? What does their delivery mean for the value creation of the company?

But the other things that I've seen are that, uh, you know, a-as we knew from the due diligence, they all have tremendous potential. And, and to, uh, deliver that potential, you need teams. And what I'm very proud to say is each company, and now the combined company, has incredible teams at each site, uh, that can, that can deliver the value. Our role, uh, from the top is to make sure that we understand where the value's created. It's created at the mine site, so that's where I started. Uh, and that they understand what they need to deliver, uh, for the company. Um, and e- and each jurisdiction has, uh, uh, several opportunities.

Great. Canada is becoming, uh, your key regional hub now with three sizable operations in the country. You still have good amount of exposure in countries like Mexico and Nicaragua. How do you think about investing in each of those jurisdictions compared to what the portfolio in Canada and the US?

Yeah. So, you know, the, the 60% that we have in, in Cana-- 52% in Canada growing to 70% when we add the US to the portfolio, 70% centroid in US and Canada is certainly, you know, a good foundation. Uh, but I wanna be clear, um, Calibre, uh, was born out of Nicaragua, Orla was born out of Mexico, and so nobody can convince Darren or I that, that you can't create tremendous value, uh, from those locations. We each graduated into the United States and then Canada subsequently, and, and were able to combine these two great companies, uh, to, to form the platform that we have today.

Uh, but, but, but the simplest way to think about how we think about, uh, jurisdictional risk is, is the reward far outweighing the risk? And in situations where we are convinced that it does, uh, we'll continue to invest, and we'll continue to deliver the kind of rewards that Nicaragua and Mexico had-- has delivered for the independent companies now in a combined fashion. And where thing-- when things change in the world and, and the risk outweighs the reward, uh, then we'll have to move away fr- the investment from those particular jurisdictions. And that's as simply as I can offer that we consider jurisdictional risk. The interesting thing about the combined company, of course, is it's all North American focused. And, uh, and so there are certainly different jurisdictions around the world. We, we, we are proud to have a North American focused company.

Great. One of the things you highlighted in your slides were-- was just the tremendous growth of the company. There's very few companies that are dou- uh, nearly doubling their production. Uh, there's an ambition to get to almost two million ounces per year. What's the timeline to get there, and how realistic is this considering there'll be depletion during that growth phase? A-and just maybe touch on the funding of these projects.

Yeah. So let, let's start with the depletion part of your question, which is, you know, it's clear in our business we always have to drill, uh, to keep the business going. And, and, and we're putting our money where our mouth is. We currently have forty-five drills, uh, turning, uh, across North America. Over three hundred kilometers of, of drill meterage, uh, has been, uh, done already this year. We'll get closer to four hundred by the end of the year, and that is only gonna increase in twenty twenty-seven. Uh, we focus our drilling around the existing assets and infrastructure that we have, so we can certainly extend mine life, and that will aid us with the depletion.

Um, as it relates to the, the assets we have and, and the sequence of growth, well, we've already begun. We've begun expanding Newfoundland. As I mentioned, we've broken ground in, in Nevada and are building that asset. Uh, but then we'll methodically, over the years to come, uh, build the next assets, uh, depending on, on, uh, the value it generates for the business and keeping in mind commodity price and, and cash flow into the business.

We will always keep the business balanced such that we can invest in our own drilling and building to produce more gold, our ability to reduce the cost of capital, and still have cash left over to return to investors, all of that being done without increasing the share count. And that, depending on the, the, the movement of the commodity price, you know, a very difficult day today, uh, but, uh, depending on the movement of the commodity price, the free cash flow from each asset, and the cost of building, uh, and drilling, that's what'll decide, uh, where we're spending our money. And the timeline for that will be measured, uh, over the next three to five years.

Great. Um, and then we've talked about the growth largely by ad-adding assets through, through acquisitions. On the opposite end of the spectrum, as you think about potential divestments, would you consider some more divestments to optimize the portfolio similar to what was done with the sale of the Brazilian mines earlier in the year?

Yeah. Uh, I think the Brazilian, uh, divestiture, uh, was for a purpose. Uh, first, to, uh, reduce, uh, the debt, uh, of the company, and second, to refocus the company on, on North America. Um, when you, uh, work in different regions and as they get farther and farther away, that creates an enormous strain on, on the management team. And so ideally, if you can focus the management team, uh, regionally, like we have in North America, uh, that's more ideal. Uh, if you can reduce debt, which is what the sale of Brazil did, uh, that gives us different opportunities to grow within that North American portfolio.

So I think, you know, I work for Vale, so, so I, I, I know Brazil, but I think that the choice made, uh, to divest Brazil served the purpose it was intended to do. Uh, but, you know, I do not believe that you can divest your way to, to success. I, I do believe that we need to find gold, build mines, and, and, and grow the value of the company. Uh, but in instances like the Brazil sale and potentially future instances where it serves a purpose that increases the value of the business, uh, we'll certainly consider it.

The platform, as we, we've presented today, uh, of Canada, US, Mexico, and Nicaragua for Equinox Gold is the proposition we'd make for investors to consider. That's what's producing the million ounces a year. That's also the same place that we're gonna push ourselves towards two million ounces. So at this stage, it's all core for us.

Great. And then as you think about the back-to-back mergers with Calibre and then Orla, um, you know, thinking maybe three to five years from now, how would you, um, I guess, assess the success of those transactions looking back?

I think I'll measure it in the share price. I think that's the best way to measure our success is, is, is the share price. And I think the combinations, uh, over the past few years have put us in a position to have a platform that we can create a lot of value from, whether it's discovery through the exploration drilling, uh, whether it's, uh, building, uh, like South Railroad, you know, new mines in great jurisdictions like Nevada, which, you know, that asset alone I could spend a half an hour describing the potential of, of Nevada and what we have there. Uh, we are, we are set up as a company through those combinations, uh, to deliver tremendous value for our investors. So we'll measure the success of that endeavor by the, uh, share price and creation of wealth for our shareholders.

Great. And then finally, you know, uh, if you think about capital allocation, you've increased the dividend by fifty percent last quarter. Uh, as we've talked about, the growth pipeline requires significant funding over the next five years. Uh, you also have a buyback program, and I think there'll be quite a bit of exploration spending across the portfolio. Maybe just walk through those competing priorities and how you think about capital allocation going forward.

Yeah. I, I spoke about this in the, in the opening. I think this is not unique to, to Equinox. Uh, we as mining companies need to make sure that we have sufficient income into the business that allows us to allocate that capital back out, uh, into the business in three ways. One is invest in growing the platform of the company such that the company is more valuable tomorrow than it is today. That looks like drilling, building, and producing more. Uh, take the rest of the money, keep your debt, uh, to a reasonable level, and, and reduce the cost of capital, uh, through better instruments, uh, and, and, and, and lower debt, uh, levels. And, and, and then finally, of course, return to shareholders, whether that's increases in the dividend, uh, or share buybacks to reduce the share count.

And what I'd offer we need to consider in the years going forward is as the commodity price moves, as we move into different phases of the build cycle, as we see different profitability from different assets, we need to balance all of that so that we have sufficient free cash flow to do all three things. And, uh, and, and when we find ourselves in a situation because of the commodity price or other- Uh, we need to, uh, pull back on, on growth. Uh, we, we may need to, uh, you know, uh, utilize our revolving credit facility to get us through a period. Uh, and it'll always be in consideration of, of, of delivering more value back to shareholders. Uh, and where we need to, uh, we need to-- may need to pace ourselves more in our growth aspirations.

Okay. And then if I may, in the last 30 seconds or so, your thoughts on the gold price and the, the-

Yeah. So, you know, I, I, I am a miner, a mining engineer, and so I, I've been raised to think more long term. Uh, you, you don't build mines o- uh, overnight, and, and the value sometimes takes some time to come. Uh, I think the fundamentals for gold haven't changed. I think there's a few things, uh, in the th- in the world that are happening today that'll affect it in the short term. But as, uh, you know, sovereign nations continue to increase, uh, debt, uh, inf- inflation, uh, continues as it has been, and, and, and then sovereign nations start to move away from the US dollar and invest in gold as they have done, uh, considerably in the last few years, the fundamentals for gold are fantastic.

But we'll always run our business responsibly, much lower reserve and resource, uh, uh, prices that we utilize, making sure project economics are based upon the time that that gold will be delivered to, to our shareholders, um, and, uh, and try and make sensible choices. Uh, but yeah, as, as a, as a gold mining executive, I have a very strong conviction about the upward trajectory of the gold price.

Great. I think that's a good place to stop. Jason, thank you very much. That was excellent.

Thank you. [audience applauding] Thank you so much.