• Gold Production: 122,000 ounces produced and 115,000 ounces sold in Q2 2024.
• Cash Cost per Ounce Sold: $1,747.
• All-in Sustaining Cost per Ounce Sold: $2,041.
• Revenue: $269 million from selling 115,000 ounces of gold at a realized price of $2,328 per ounce.
• Income from Mine Operations: $27 million.
• Operating Expenses: $199 million in Q2 2024, up from $193 million in Q2 2023.
• EBITDA: $510 million, including a $470 million fair value gain from Greenstone ownership consolidation.
• Adjusted EBITDA: $51 million, down from $71 million in Q2 2023.
• Net Income: $204 million, with basic earnings per share of $0.72 and $0.61 fully diluted.
• Adjusted Net Loss: $6 million or $0.01 per share.
• Cash Flow from Operations: $45 million or $0.12 per share before changes in non-cash working capital.
• Greenstone Mine Production: 16,247 ounces produced in Q2 2024.
• Updated 2024 Guidance: 655,000 to 750,000 ounces of gold with cash costs of $1,305 to $1,405 per ounce and all-in sustaining costs of $1,635 to $1,735 per ounce.

• Warning! GuruFocus has detected 9 Warning Signs with EQX.

Release Date: August 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Equinox Gold Corp (EQX) completed the acquisition of the remaining 40% of the Greenstone mine, consolidating full ownership and enhancing cash flow and EBITDA.
• The Greenstone mine achieved its first gold pour in late May and is ramping up towards commercial production, with production exceeding expectations in July.
• The company raised almost $1.2 million for community initiatives, including the Geraldton District Hospital, showcasing strong corporate social responsibility.
• Equinox Gold Corp (EQX) reported no significant environmental incidents during the second quarter, highlighting effective environmental management.
• The company has a strong liquidity position with $160 million in unrestricted cash and $105 million available on a revolving credit facility.

Negative Points

• A fatality occurred at the Fazenda mine in Brazil, leading to a site-wide suspension and highlighting safety concerns.
• The Arizona mine faced geotechnical issues, resulting in suspended mining and high all-in sustaining costs over $3,000 per ounce.
• Production guidance for 2024 was reduced due to operational challenges at multiple sites, including Arizona and Mesquite.
• The Castle Mountain Phase one operations were suspended, transitioning to residual leach only, impacting production guidance.
• The company reported a net loss of $6 million on an adjusted basis, reflecting financial challenges despite revenue generation.

Q & A Highlights

Q: How are you going to catch up in the second half of the year to achieve your guidance? A: Doug Reddy, Chief Operating Officer, explained that most sites, particularly Los Filos and Greenstone, will have a stronger second half. Greenstone's ramp-up to commercial production will significantly increase gold production.

Q: What will Castle Mountain care maintenance cost be on an annual basis? Will there be any severance payments? A: Peter Hardie, Chief Financial Officer, confirmed there will be severance payments. The company will provide updated guidance on care maintenance costs in the future. Castle Mountain will continue residual leaching through Q3, with costs updated as operations progress.

Q: When do you expect to be able to get back into mining at Piaba? A: Gregory Smith, President and CEO, stated that work is ongoing at Piaba, with plans to resume some mining by the end of the year. The focus is on remediation and safety, with a larger program planned for 2025.

Q: Can you provide details on the ramp-up of Greenstone's throughput rates and current exit rates? A: Doug Reddy noted that throughput was 40-50% of rated capacity in April and May, reaching just under 60% by July. A major shutdown addressed ramp-up issues, and operations have resumed to continue ramping up.

Q: Given the higher costs at Castle Mountain, are there similar considerations for other high-cost operations like Los Filos and Santa Luz? A: Gregory Smith emphasized that while Castle Mountain's phase one was a small operation, Los Filos and Santa Luz have long-term potential. Los Filos aims to establish new community agreements, and Santa Luz is refining new technology to improve recoveries.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.