• Gold Production: 174,000 ounces produced and sold in Q3 2024.
• Revenue: $428 million for Q3 2024.
• Cash Cost per Ounce: $1,720 per ounce sold in Q3 2024.
• All-in Sustaining Cost per Ounce: $1,994 per ounce sold in Q3 2024.
• Adjusted EBITDA: $142 million in Q3 2024.
• Net Income: $300,000 in Q3 2024.
• Adjusted Net Income: $37 million or $0.09 per share in Q3 2024.
• Cash Flow from Operations: $130 million or $0.30 per share in Q3 2024.
• Operating Expenses: $268 million in Q3 2024.
• Greenstone Production: 42,000 ounces in Q3 2024.
• Available Liquidity: $168 million in unrestricted cash and $105 million available on revolving credit facility as of September 30, 2024.

• Warning! GuruFocus has detected 8 Warning Signs with EQX.

Release Date: November 07, 2024

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

Positive Points

• Equinox Gold Corp (EQX) achieved commercial production at its Greenstone mine, contributing significantly to the company's record third-quarter gold sales and revenue.
• The company reported a substantial increase in revenue, driven by higher gold production and strong gold prices, with total revenues reaching $428 million for the quarter.
• Equinox Gold Corp (EQX) successfully raised over CAD1.3 million for the Geraldton District Hospital through its Ride to Greenstone fundraising initiative, demonstrating strong community engagement.
• The company has a strong liquidity position with $168 million in unrestricted cash and $105 million available on its revolving credit facility.
• Equinox Gold Corp (EQX) is focusing on deleveraging its balance sheet, with plans to use free cash flow from its mines to pay down debt, particularly following the achievement of commercial production at Greenstone.

Negative Points

• The ramp-up of the Greenstone mine has been slower than initially expected, with some operational challenges such as multi-day shutdowns to address process issues.
• The company's all-in sustaining cost per ounce increased to $1,994, up from $1,630 in the same quarter last year, primarily due to volume-driven factors and higher operating expenses.
• Equinox Gold Corp (EQX) faced challenges at its Santa Luz mine, with volatile recovery rates and ongoing issues with the desliming circuit affecting gold recovery.
• The Los Filos mine has high all-in sustaining costs of $2,153 per ounce, and the company is in ongoing negotiations with local communities to secure long-term agreements.
• Aurizona mine experienced a temporary suspension of operations due to lack of ore, impacting production and resulting in higher all-in sustaining costs of $2,145 per ounce.

Q & A Highlights

Q: Congratulations on achieving commercial production at Greenstone. Could you explain the change in your calculation for declaring commercial production? A: Our internal criteria for declaring commercial production was more conservative than many peers. Over Q3, Greenstone generated substantial all-in sustaining cost contribution margin, with increasing throughput rates. It made sense from an accounting and operating perspective to declare it commercially producing, as it is now our largest and lowest cost mine.

Q: Can you provide some color on how the unit costs at Greenstone are trending? A: From a mining cost perspective, we are effectively on plan as anticipated. We can discuss more detailed data offline.

Q: Regarding Santa Luz, is the expected recovery rate for next year around 60%, or are you targeting higher? A: Without desliming, we're averaging about 68% recovery. We intend to continue working on desliming, which works but needs adjustments. Long-term, we aim to improve recovery rates, but currently, without desliming, we achieve decent recovery.

Q: Can you provide clarity on your plan or timeline for deleveraging? A: We plan a combination of retiring debt as it matures, such as the $140 million convertible notes, and paying down the revolving credit facility with cash flow from mines. We will also optimize debt maturity to extend and manage our debt ladder.

Q: Is there an update on the discussions with Los Filos communities and the potential timeline for resolution? A: We need to renegotiate agreements for Los Filos' long-term future. Constructive discussions are ongoing, and all stakeholders want the mine to operate. If unresolved by early Q1 2025, we may move toward suspension of operations, but we aim for a resolution.

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