Equinox Gold Q1 2023 Earnings Call Transcript

Quartr
Provided by Quartr
May 3, 2023

Key Takeaways

  • Equinox Gold produced just over 123,000 ounces of gold in Q1 and maintained its 2023 guidance of 550,000–625,000 ounces with cash costs of $13.76/oz and AISC of $16.58/oz.
  • The Greenstone project is 73% complete, remains on time and on budget, and is slated to deliver first gold in the first half of 2024.
  • The company bolstered its financial position with an unrestricted cash balance of $285 million, $130 million in undrawn credit, a $140 million gold prepay, hedges on 164,000 ounces, and net debt down ~$80 million.
  • Equinox received acknowledgment of completeness for its Castle Mountain permit amendment to trigger formal environmental analysis and expects Aurizona’s underground feasibility study by mid‐year.
  • At Los Filos, high copper oxide ore has delayed gold recovery due to increased cyanide consumption and extended leach cycles, shifting production into later quarters.
AI Generated. May Contain Errors.
Earnings Conference Call
Equinox Gold Q1 2023
00:00 / 00:00

There are 9 speakers on the call.

Operator

Welcome to the Equinox Gold First Quarter 2023 Results and Corporate Update. 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. If you are participating through the webcast, you can submit a question in writing by using the text box in the lower left corner of the webcast frame. I would now like to turn the conference over to Rylin Bailey, Vice President, Investor Relations for Equinox Gold.

Operator

Please go ahead.

Speaker 1

Thank you, Ariel. Thank you, everybody, for joining us this morning. We will, of course, be making number of forward looking statements today, so please do visit our continuous disclosure documents on our website, on SEDAR, on ANEIGR. I'm now going to turn the conference call over to our CEO, Greg Smith.

Speaker 2

Thanks, Raline. Good morning and thanks everyone for joining us today. On the call with me is our COO, Doug Reddy Our CFO, Peter Hardy our EVP of Exploration, Scott Heffernan and our VP of Investor Relations, Rylind Bailey, of course. For those new to the company, Equinox Gold is a diversified Americas focused gold producer. We have 7 producing mines across Brazil, Mexico and the United And we also have several growth projects including our large scale Greenstone Gold Mine in Ontario, which we are constructing now with our 40 Thank you, Mr.

Speaker 2

Chairman. Today, we are discussing our 2023 Q1 financial and operating results. I'll start with a broad overview for the quarter and then turn the call over to Pete and Doug for more details. During the Q1, we produced just under 123,000 ounces And so just over 123,000 ounces of gold. Cash cost per ounce sold was 13.76 All in sustaining cost per ounce sold was $16.58 This is a good start to the year for us and we're on track to meet our 2023 production and cost guidance of 550,000 ounces to 625,000 ounces of gold with cash cost between $13.55 $14.60 per ounce and all in sustaining cost between $15.75 $16.95 per ounce.

Speaker 2

Over the course of the quarter, construction at our Greenstone mine continued to advance on time and on budget for First Gold Power in the first half of twenty twenty four. I was there just a few weeks ago with a few of our directors, and I can say that while The progress that Eric and his team have made over the course of the winter is impressive. At the end of the quarter, we were 73% complete Overall, construction was 65% complete and the team is now primarily focused on mechanical, piping Just a quick word on Castle Mountain and Aurizona. At Castle Mountain, we have now received acknowledgment of completeness of our permit amendment application from the state, county and federal regulators. So permitting will now start to advance through the formal environmental analysis and work on the environmental impact statement is expected to start later this year.

Speaker 2

At Aurizona, the feasibility study on the addition of an underground mine at Aurizona is progressing well, and we expect to have results On the corporate side, we did take some steps this quarter to fortify our financial position as we continue through The Greenstone build, these actions resulted in an unrestricted cash balance of $285,000,000 at the end of the quarter. That's up $85,000,000 from year end, plus approximately $130,000,000 available from our credit facility for a total of $415,000,000 in available cash People go into more detail on this later in the call. Finally, I am pleased to report we also continued our excellent safety record during the quarter with a continued reduction in our 12 month rolling total recordable injury rate. We also had good environmental performance during the quarter. And in February, we announced Our greenhouse gas emissions reduction target of 25% by 2,030 and that's as compared to a business as usual case.

Speaker 3

Details of

Speaker 2

that are laid out in our Climate Action Report, which is available on our website. Finally, actually shortly following this call. We will also publish our 2022 ESG report, which will be available on our website. This report is very detailed, has loads of information on all things ESG at Equinox, and so I'd encourage everyone on this call to check that out. With that, I'd like to hand the call over to Peter Hardy to run through our financial results.

Speaker 4

Thanks, Greg. We're now on Slide 6 in the presentation. As to our financial highlights for the quarter, we received an average realized price of $18.95 per ounce on the sale of 123,000 ounces of gold, generating $234,000,000 in revenue. We had $172,000,000 in operating expenses in Q1, which is similar to the $168,000,000 of operating expenses from Q4 2022, But an increase compared to Q1 2022 is $152,000,000 The increase from Q1 last year is consistent with the inflation Equinox experienced in the first half 2022. On a per unit basis, cash cost per ounce increased in Q1 2023 to 13.76 per ounce from $12.38 per ounce in Q1 2022 and all in sustaining cost per ounce increased to $16.58 per ounce from $15.78 in Q1 2022.

Speaker 4

Key consumables unit costs remained stable from Q4 to Q1 2023. From Q4, we saw small decreases in key consumable prices in Brazil, which were offset by small increases in consumable price Since early 2022. As Greg mentioned, our Q1 gold production and cost results have us on track for our 2023 guidance. Our EBITDA in Q1 was $65,000,000 or $57,000,000 on an adjusted basis. We had net income of $17,000,000 for basic earnings per share of $0.06 or $0.05 per share fully diluted.

Speaker 4

On an adjusted basis, we had a loss of $8,000,000 or $0.03 a share. The main adjusting items to income are the reversal of a $35,000,000 gain on reclassifying our holdings in I80 Gold from an investment in associates to marketable This reclassification results from selling a portion of the I-eighty Holdings, which moved us to below 20% total ownership. In addition, there are adjustments of $13,000,000 for unrealized gains on foreign exchange contracts and $15,000,000 for our share of losses on investment and associates. Those are related to IED and we won't be incurring those going forward. Cash flow from operations before changes in non cash working capital was $195,000,000.63 per share included in that cash flow from operations is the receipt of $140,000,000 from the gold prepay arrangement.

Speaker 4

If you back out those prepaid funds, Equinox generated $55,000,000 in cash flow from operations or $0.18 a share. In terms of liquidity and capital position, we ended the quarter with $285,000,000 of unrestricted cash and $127,000,000 available to draw on our credit Giving us a total of $412,000,000 of liquidity. Our cash position was enhanced with the gold prepay arrangement we announced in March. For the $140,000,000 we received under the terms of that arrangement, which is recorded as deferred revenue, Equinox will deliver approximately 80,000 ounces of gold at equal monthly installments from October 2024 to July 2026, which represents less than 5% of forecasted production for that period. Deliveries start after Greenstone construction is complete and gold can come from any of the mines to satisfy the obligation.

Speaker 4

Deliveries will be credited at $2,170 per ounce of gold as it is delivered. And we note that for purposes of the debt covenant calculations, The prepay will not receive deferred revenue treatment and will be included as debt. The prepay was led by ING During the quarter, we also bolstered cash by realizing total investment sales proceeds of $77,000,000 with $53,000,000 received on the sale of our remaining Solares shares and the $24,000,000 on the sale of the I-eighty shares. Net debt decreased about $80,000,000 from the end of December to 5 $48,000,000 at the end of March. To further strengthen the company's financial position during Q1 and into early April, we put in place gold hedge collars.

Speaker 4

There are approximately 164,000 ounces hedged from Q2 2023 through the end of Q1 2024 with a floor price of $19.10 per ounce And significant upside participation up to a ceiling of over $2,100 an ounce and that represents a little under 25% of our production through that period. Moving to Slide 7, what does that all mean for Greenstone Funding? Based on construction progress at the beginning of Q2, Equinox's share of the remaining construction budget is about $260,000,000 We expect to fund this amount with our cash balance of $285,000,000 our ongoing operating cash flow and the undrawn revolving credit facility of $127,000,000 Additionally, the 100,000,000 The preceding feature remains in place on the revolving credit facility. With those and other sources of liquidity, we're well funded to complete Greenstone Construction. I should note also, as we stated previously, we paused the use of the at the market facility in January after drawing about $25,000,000 from So there's $75,000,000 remaining on the ATM that's available.

Speaker 4

With that, I will turn the presentation over to Doug for a review of our operations.

Speaker 3

Thanks, Pete. So we're on Slide 8. For the operations, all the mines are working on continuous improvement programs that are Just on productivity improvements, consumable usage reduction and also procurement savings. Specifically looking at Mesquite during Q1, the focus was on stripping in the Brownie and the Vista East pits, And that will provide us ore for the remainder of 2023. Due to the emphasis on stripping in Q1, we did have a relatively low number of new ounces that went on to the pad during that period.

Speaker 3

And yet, Our ounces were as planned for the quarter and that's in part due to contributions that we got from re leaching and side slope leaching of the pad in previously leached We are continuing our exploration and permitting efforts looking for mine life extensions at Mesquite. At Castle Mountain, we were placing both run of mine and crushed and agglomerated ore on the heap leach pads. We had an increase in the overall We continue working on increasing the overall crusher throughput with the intent to put all of it through the crusher and agglomeration system. We are advancing our permitting and met test work in support of Phase 2, and I'll mention some more on that later on. At Los Filos, we're currently mining in the Los Filos and the Guadalupe open pits as well as the Los Filos underground mine.

Speaker 3

We've had improved productivity with more tonnes being placed in the quarter and with higher grades coming from both open pits and underground mines. However, recovery was impacted for some of the ore coming from Guadalupe open pit. Some of the ore has a high copper grade, specifically copper oxides, and they are cyanide consumers, and they delay our overall gold recovery. So we've now been separating that ore. We're using a higher cyanide dosage, and we anticipate an extended leach cycle for the recovery of the gold from that ore.

Speaker 3

So that's going to mean that the ounces from that ore will be dragged out over subsequent quarters. Also of note, we did suspend the Bermejal Underground during the quarter, and that was due to the prolonged development period and investment period and the lower We will develop the revised mine plan to be able to match The timing for restart so that higher grade ore will be fed into the CIL plant. Turning to Slide 9. At Aurizona, we had good mine production as we move through the peak of the rainy season. Our contractor brought trucks during the quarter.

Speaker 3

We also mobilized a second contractor so that we can catch up on the material movement as the rainy season begins to abate. The process plant maintained a higher throughput than planned and we produced slightly higher than planned for the quarter overall. At Fazenda, the mine performed well with open pit mining contributing higher grades and more tonnes which helped to offset lower production from the underground mine while we catch up on development headings and bring on additional stopes in the underground. Both throughput and plant recoveries at Fazenda were above plan and the mine was ahead overall on ounces being produced. And I note our exploration work at Fazenda continues to provide good resource and reserve replacement.

Speaker 3

As per each year, we focus So doing that to extend the life of Fazenda. And exploration has also been following up on the Greenstone Belt between Fazenda and Sandalusa. At RDM, we restarted the process plant in January, January 19, after a permitting delay, And we're doing owner mining with our own equipment supplemented with a rental equipment fleet, and mining is ahead of prior quarters We're processing this combination of in situ ore plus supplemented by low grade dump material. Recoveries are almost 90%, which is a couple percent above plan and the mine intends to catch up on full year production as Projected for the year. The final TSF raise is in progress.

Speaker 3

In our current TSF, we're optimizing the volume that we have available by cyclone in the tailings, and we've entered into the permitting process for Filtered tailing storage facility at RDM. Moving on to Santa Luz, We had lower recoveries in January, but over 65% was being achieved in February March as we kept the ore blend steady And modifications were being completed on the detox system, which is critical to maintaining recoveries at Santa Luz. Recoveries are now over 68% I do note the resin leach plant is achieving higher recoveries overall than what would have been possible Moving on to Slide 10 and on to the development side. Greenstone, This will be one of the largest gold mines in Canada with 5,500,000 ounces of reserves. Annual production for the 1st 5 years will be 400,000 ounces a year, 14 year life and first production coming in the first half of twenty twenty four.

Speaker 3

I just want to take a moment to acknowledge the focus on safety at all of our mines, but especially as a construction project at Greenstone, they've passed 3,000,000 hours just after the quarter end with no lost time injuries. So, good that they keep their focus on safety. Moving on to Slide 11 and looking at the construction information. The project is on budget and on track. Overall, the project is 73% complete at the end of Q1.

Speaker 3

You can see the various other items for construction procurement concrete structural steel. Capital spend is 65% complete and we have around $260,000,000 remaining as our share of the spend on the project. Project progress was really good during the winter months as Greg stole some of my thunder and talked about how well things have been going. All of the buildings were enclosed and being heated by the end of the quarter. Ball mill installation Ball mill installation has commenced as per the schedule.

Speaker 3

And as you can see in the photos, a lot of the buildings now We have major installations underway, mechanical, electrical, piping being a focus. All major equipment is on-site with the exception of the HPGR, which is on route to the site at the moment. And on the operations side, We started mining in Q3 last year with 4 trucks and 1 shovel. We moved to 20 fourseven operations in Q4 And by the end of Q1, we've moved 6,000,000 tonnes of material. We now have 7 trucks on-site and 2 shovels.

Speaker 3

And I note that we will be doing an analyst visit in September this year. So moving on to our other Expansion projects, they include Castle Mountain Phase 2. We'll see an increase to over 45,000 tonnes a day going on to the leach pads And production of around 218,000 ounces a year for a 14 year life. As Greg noted, we submitted our permit application in March of 2022, we've had our notices of completeness from the permitting agencies, and we'll continue to work through the process and should Environmental assessment work happening during 2023. For Piava Underground at the Aurizona mine, we're working on the feasibility study that involves mining from both the underground at the same time as the open pits.

Speaker 3

The feasibility study should be wrapped up will be wrapped up by mid year. We have permits for 3 portal locations. We will, upon completion of the feasibility study, look at timing for an exploration ramp. That would give us Underground drill stations and the ability to mine on the ore, and we'll be looking to assess geotechnical and hydrogeological parameters, And also, it will ultimately serve as a production decline. At Fazenda, as noted, we We're looking at construction of the CIL plant.

Speaker 3

We'll be making a decision on the construction once we're through the higher CapEx period With that, I'll hand it back to Greg.

Speaker 2

Thanks, Doug. I think that covers the quarter well. I should say, Quite recently, we did launch a new website. On there, you can see a whole bunch of pictures of all of our sites, but also of the progress at Greenstone. As Doug said, we haven't had anybody at sites in September last year.

Speaker 2

We will be doing a site tour in September of this year. But in the meantime, the website has plenty of pictures that you can kind of track progress that way. I think I'll just make a final comment to thank the entire Equinox here in Vancouver and at all of our sites who, as always, are working hard for all of our stakeholders and, of course, also for the continued support of our shareholders. I'll finish up there and pass it back to Ralind for Q and A.

Speaker 1

Perfect. Thank you. Operator, can you please remind people how to ask the question?

Operator

Certainly. If you are participating through the webcast, you can submit a question in writing by using the text box in the lower left corner of the webcast frame. We will pause for a moment as callers join the queue.

Speaker 1

Thank you. We'll take a question from online. Can you give any further clarity on when you're going to pull

Speaker 2

Well, what we've been guiding to the market So far is that we'll pour gold in the first half of twenty twenty four and that's the guidance we're going to maintain for now.

Speaker 1

Okay. Can you please take some questions from the phone?

Operator

Certainly. Our first question comes from Wayne Lam of RBC. Please go ahead.

Speaker 5

Yes, thanks guys. Just want to ask on the progress of the results of the quantitative risk assessment At Greenstone, I just wanted to understand the rationale behind the recent hedging and the prepay. Is that kind of just showing up the balance sheet as you guys look to wrap up construction or is that based on some of the results from the risk assessment?

Speaker 3

So we started the QRA in April, so we're still working our way through. We've got initial feedback, but we have to work through It's the same thing that we did last year. It gives us a good whole view of the site and make sure that all of our progress is on Track that we've accounted for all of the materials and we'll make any adjustments going forward.

Speaker 4

And then on your Wayne, it's Peter. On your question on hedging and prepay, you hit the nail on the head. With respect to the and I'll refer to it Very short term hedging. Those hedges expire and run through Q1 next year. It's to lock in we were on two occasions to take advantage of the Ford Gold curve that was at the end of January and the beginning of April, Where we locked in profits during our CapEx intensive period.

Speaker 4

And then I would add, We still have meaningful exposure. It's just under 25% that's hedged through that period. The ceiling is very high at 2,106. And of course, We have full exposure on the unhedged 75% that remains on the short term hedge. And then with respect to the prepay, yes, it's to add liquidity now During the CapEx period, again, with a really high locked in forward rate at $2,170 an ounce Throughout the delivery period.

Speaker 4

That's just under 2 years. And again, post Greenstone startup.

Speaker 2

Yes, Wayne, I think it also helps just to To add some additional context and if you go back to late October, early November, gold was 16.50. We're in the middle of a very substantial capital build at Greenstone. We've taken a number of incremental measures Just to make sure we've got as strong a balance sheet as possible as we move through that build. So we've done a number of different things, which has included some hedging, the prepay, We sold some securities. We did tap our ATM.

Speaker 2

We worked with our lenders and relaxed our covenants. And all of that was designed To just decrease risk over the build period. So that was just one more part of an overall strategy to do that.

Speaker 5

Okay, great. Yes, I agree. It looks like some prudent risk management. Maybe at Mesquite, I was just wondering if you might be able to discuss The lower cash cost quarter over quarter, is that in part related to the kind of optimization in Moving to the smaller pits, and just wondering if that's sustainable relative to where the guidance was?

Speaker 3

Well, yes, it is specifically that. I mean, that's why we moved to the smaller pits at Mesquite and we continue to look at Opportunities to be able to extend life overall. So that is the approach there.

Speaker 5

Okay, great. Thanks. And then maybe just last one for me. Just at Castle Mountain, on the permitting front, can you help us understand the impact of the designation of the National Monument across that access road and how does that impact the progress on timing in terms of the permitting for Phase 2?

Speaker 2

It should have zero impact on the timing of permitting. And actually if you go to the language of the proclamation for that national monument, it's very detailed in its, I guess, exclusion from any restrictions on any existing right of ways, Whether it's roads, utilities, power, other infrastructure that might be in the monument. That was obviously a key interest to us, and we're very, very pleased with the language that they ultimately used in the monument. We don't expect it to have Any effect on permitting at Castle Mountain. And we were in very Ongoing, I guess, conversations with the regulators as that monument was being put into place.

Speaker 2

And not just us, there's lots of infrastructure On the Nevada side of the California Nevada border there where that monument was put in. So all in all, I think it was a good result for everybody, And we're happy with the way that turned out.

Speaker 5

Okay, great. Congrats on a good quarter and thanks for taking my questions.

Speaker 2

Thanks Wayne.

Operator

Our next question comes from Anita Soni of CIBC World Markets. Please go ahead.

Speaker 6

Hi. Good morning, Greg, Doug and Peter. So a few questions. Firstly, the inventories. They've been climbing for the last couple of quarters and I just wanted to understand Some of the how the inventories play into the costs.

Speaker 6

Am I correct to assume, because I looked read through the notes, correct to assume that It's a function of some of these higher cost higher unit costs will take some time to wind its way through Or is there something else at play there?

Speaker 4

Anita, it's Peter. One of the main contributors to the increase in overall inventory is at Los Filos where there was Quite a bit of stacking activity both in Q4 and Q1 with a longer recovery from inventory. So those costs remain in inventory, of course, until they come off and we sell the gold, but that's the biggest contributor to the increase in inventories.

Speaker 6

Okay. So it's been about $30,000,000 per quarter for the last two quarters. So that should come out over the in the back half of the year? Like what's the leach cycle at Los Filos?

Speaker 3

Normal leaf cycles, 120 days. I mean, most of the gold comes out in the 1st 60 days, but 20 days, but for the higher copper ore, we're looking at 180 days, so a third cycle to get it all. So hence, it drags out. So

Speaker 4

yes, if you're building that into your model, yes, it's pushing it into kind of later Q2 and Q3.

Speaker 6

And then just an overall question in terms of as we think about the costs that you delivered this quarter and then increasing production over the course of the year that you had previously mentioned. Do you anticipate that the that that will have a overall, I guess, will cost be flat to this quarter? Will they be rising from this quarter? Would you expect them to decline?

Speaker 7

Well, I

Speaker 2

think it's fair to say we're not shooting for the high end of our cost guidance. We're shooting for the low end of our cost guidance. And as we Traditionally at Equinox, just seasonality, Q1 is usually a lower production quarter for us and we typically see increasing production quarter over quarter. Expect this year to be the same and along with that increase in production, we have a corresponding decrease in costs.

Speaker 6

Okay. That's my question But now can I move on to Greenstone? So just in terms of the deliverables, I think you had mentioned that when we had our Mine were about 9 months ago that at the end of Q1 you would have been around 80% complete. And I do notice that in Q2 and Q3, you do have some pretty good productivity improvements. But according to the schedule right now, you're only supposed to deliver about, I guess a little over 10% in Q2.

Speaker 6

So is it do you expect to make up the shortfall in the completion over Q2, Q3? Or will that kind of push out into Q1 and Q2 into 2024?

Speaker 3

No, it is exactly as you say that the intent is to catch up by we were looking at Q2, I think coming through the winter, we're looking at Q3

Speaker 6

All right. And then a few specifics. So I guess you've got 7 trucks at this point. Is that correct?

Speaker 3

So far, operating, yes.

Speaker 6

Yes. And then by the end of the year, you're supposed to have 18 that you need for operational readiness. Is that the case?

Speaker 3

We have another 11 coming. I'd have to check the delivery dates, but it's all per our schedule. We've doubled down and checked to make sure we're going to achieve everything we need to do for material movement.

Speaker 6

Sure. And then just moving on to the TMF, I just wanted to clarify, it is a downstream tailings facility, right, not a modified centerline?

Speaker 3

Downstream With a and we do have a cutoff wall that's deep soil mixing and we're doing an abutment or embankment On the TSF as well, which is where a lot of our material goes to right now for the waste that goes down onto the TSF.

Speaker 6

And then the other deliverable that I was thinking about for this quarter, did the crushers get delivered yet?

Speaker 3

Crushers.

Speaker 2

You talked about high pressure grinding rolls or the crushers? Crushers.

Speaker 3

Crushers are there.

Speaker 6

The crushers, yes, it was listed as crushers in terms of what we've in our mine tour book from last September that the crushers should have been delivered?

Speaker 2

Yes, crushers are there, yes.

Speaker 6

Okay. All right. And that's it for my questions. I'll pass it off to somebody else.

Speaker 7

Thanks, Nita.

Operator

Our next question comes from Arun Lamba of TD Securities. Please go ahead.

Speaker 7

Hey, guys. Just a couple of quick ones on Greenstone. It's kind of largely been answered. But I guess first, can you just remind us when the timing of that independent study is going to come out? I'm guessing it's before the site visit in September.

Speaker 7

And then just lastly, you mentioned, I mean, all the buildings are enclosed, equipment on-site except the HPGR. In your view, it could be Greg or For anyone, what's the critical path item right now to kind of keep everything on schedule?

Speaker 2

So on the QRA assessment, we're in the mix of it right now, I think that will be done probably sometime in May and we can update the market probably in May or June, So long before the September site visit. And Critical Path has been the same since basically the start of construction, which is Through the milling facility. So really

Speaker 3

East end of the process plant building, which Getting it enclosed, which was done in Q1 was critical, starting the ball mill installation, which has commenced on schedule. It remains a critical path until we get through the commissioning of that because it is the core piece of But we've got the 2 mills being installed in parallel. Previously, they're scheduled for cereal, so that should be able to keep everything on track there.

Speaker 2

And Aaron, I think when we spoke in, I guess it was January, you asked me what kept me up at night at Greenstone. And it's going really well, but the same thing I said then is the same thing I'll say now, which is we just have to maintain the productivity level of the Aren't enclosed at this point. They're all enclosed. We're moving past winter at Greenstone now and things are actually starting to move very quickly there. That's the main critical path, keeping that productivity up as we get the mill installed, but things are looking really good.

Speaker 3

I'll just double check, crushers are on-site and secondary crusher installation work is underway. So, yes.

Speaker 7

No, that's great. And then just quickly, just on the SandBox potential up to $75,000,000 Do you have an Estimated time of approximate completion for that or is it just kind of a bunch of variables, it's still kind of unknown?

Speaker 2

Well, we in the non binding term sheet that we signed with SandBox, it had an outside date of September of this year. And so the team at SandBox is And Equinox is working on the final documentation, and then that would lead to SandBox doing a financing and then closing that transaction. Right now, the outside date is September, and that's the date that was in the term sheet.

Speaker 6

No, that's great.

Speaker 7

Thanks a lot and congrats on a good quarter.

Speaker 2

Thanks Aaron.

Operator

Our next question comes from Mike Parkin of National Bank. Please go ahead.

Speaker 8

Hi, guys. Thanks Thanks for taking my questions and congrats on an earnings beat for the quarter. Most of my questions have been answered. Just can you give us a bit more color At Mesquite around the permit with respect to mining and the path forward there in terms of what you expect At the asset, say, next year and the year beyond?

Speaker 3

Well, the permitting for Mesquite relates To every time we do a drill program, we have to permit them. So that always is in the queue is to get every single drill program being able to be permitted. So It's a stepwise progression. We are looking at one of the areas where we would like to be able to mine that will involve some Modifications to infrastructure, so that's underway. And we also had applied for a pad height increase, which we So there's always permitting modifications to be done on a relatively tight footprint and a very large mine.

Speaker 8

So, it sounds like it's fairly low risk of being an issue for 2024?

Speaker 3

Well, yes, essentially, I would say the key thing is looking through 2024 into 25, I mean we need to get all drill programs done that would be able to support productions that goes from the end of 2024 into 2025.

Speaker 8

Okay. And then just flipping back over to Greenstone, can you just give us an idea of where you are at staff? Are you at peak contractor employment or is that still yet to come this year and that can support Increased productivity in terms of like your monthly completion rates?

Speaker 3

Well, we peaked through the summer, but due to a combination of operations and construction personnel, That was to be expected. And we've been through all the housing plans and everything. And it will be tight, but it's part of the plan.

Speaker 8

And then in terms of like for your regular worker staffing, how is that going? You were Kind of highlighting some wins in terms of looking to be kind of the employer of choice given the long mine life in the area. Is that still tracking nicely?

Speaker 2

It's tracking nicely, but it's not without challenge. We're The team at Greenstone is working hard to get everyone they need for the operation. And I know they're attending a lot of different employment shows and Conferences and we're very actively hiring and so if anyone is interested in a job at Greenstone, you can check our website or the Greenstone website. We'd love to hear from you. The biggest challenge is the more technical roles, mill operators, Electricians, heavy duty mechanics, those types of roles are certainly challenging.

Speaker 2

There's a lot of competition. But it is going well and we're keen to talk

Speaker 3

And our peak will be June for personnel on-site. We're about 870 at the moment, But June peaked at just over a 1,000.

Speaker 8

Okay. Looking forward to tracking the progress on that one. Thanks, guys.

Speaker 1

And it looks like we have one follow-up question from Anita.

Operator

Our next question comes from Anita Soni of CIBC World Markets. Please go ahead.

Speaker 6

Hi, thanks. I was just going to ask about the project CapEx Look, you're on schedule in terms of the CapEx spend at around 65% at the end of this quarter. But given that you're a little bit behind on the actual progress, I guess, as you try to catch up over the next couple of quarters on the progress, will that have any impact to the overall capital for the capital spend pattern over the next couple of quarters?

Speaker 4

Yes, Anita, it's Peter. We don't believe it will.

Speaker 6

And so could you provide some color on why it won't?

Speaker 4

We believe within our Budget overall contingency for those kinds of items that might be taking more hours than originally planned, that contingency is sufficient to satisfy No, an increase if necessary.

Speaker 6

Okay. And how much of the contingency remains? I think when we were on the tour, I believe some of it had been used up already, but I don't really have an update on what the contingency was since then.

Speaker 3

That is part of the QRA that we're going through right now. So I'm sorry, again, I just have to wait for us to finalize that work that we're doing.

Speaker 6

Okay. And I just want to dig a little bit more on this on the tailings dam. I guess what I'm trying to drive at is, You've got 7 trucks right now. I think you were supposed to have about 9 by the end of this quarter. And then to me the Truck delivery is kind of critical to making sure that your TMF is built on time and available for when you start production.

Speaker 6

So could you give us a little bit of a timeline over the next 6 months, 9 months about when you're expecting the trucks and what needs to be done on the TMF to be in order to be ready for QQ for the first half of twenty twenty four?

Speaker 3

Yes. The TMF is to be available for use as of the Q4 of this That doesn't change. I have to go back and check on actual truck numbers, but Daryl Deventra with our Nicole Services team monitors what David Newhook on the operations side at Greenstone has for progress. I'll come back to you on that one.

Speaker 6

Sure. I mean in the technical report, it said it was 9 by the end of this quarter and 2018 by the end of next quarter. So, yes, because obviously you've got to do a lot of moving of earth in Q2 and Q3, so you need those trucks.

Speaker 3

Yes, we also modified the mining plan, which we've talked about last year that we I think the original plan was about 41,000,000 tonnes. We modified the plan for the 1st period to be About 30,000,000 tonnes, which meant that we could push off some of the trucks and it had no impact overall for the 1st 5 years of operations. They just pushed some of the tons into the operating period.

Speaker 6

And that was for the stripping, right? That was so you've basically given yourself, I guess, 10,000,000 tons of wiggle room on the

Speaker 3

Yes. So sorry, there's the disconnect for you. I can come back and check on the delivery times for it and we'll come back with an answer for you. Okay.

Speaker 5

Thank you.

Speaker 4

It's a good point. And just kind of further to your point, we've actually put in Orders in advance on the trucks that we need and shovels. So we're very comfortable that we're going to have all the gear we need In the time that we needed as we've kind of accelerated the ordering and made commitments on that gear.

Speaker 6

Okay. Thank you.

Speaker 1

One question from online, if you got all the permits that you need now at RDM?

Speaker 3

Yes, with the exception of the Permit for the filter tailings storage facility. We do have one permit, which was for Some additional low grade dumps that we were looking at topping up our feet. We know that the permit's We're just waiting for the signed version of it to be delivered, but we consider that to be in hand. So just The filter tailing storage facility, which for us is a shift at RDM and obviously is the way to go in Brazil because all mines are shifting towards filter

Speaker 1

Great. Do you have any closing remarks?

Speaker 2

No, I think that sums it up well. And as usual, I'll just say if anyone has any further questions, you can always reach out to Raline or myself The website, all of our contact information is there. And thanks again for attending the call.

Speaker 1

Perfect. Thanks everybody for joining us today. Operator, you can now conclude the call.

Operator

Thank you. This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.

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