Equinox Gold Corp. (EQX) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Shareholders of Equinox Gold Corp. Please note that today's meeting is being recorded. If you participate in today's meeting and disclose personal information, you will be deemed to consent to the recording, transfer and use of same. If you disclose personal information of another person in today's meeting, you will be deemed to represent and warrant to Computershare and the company that you first obtained all required consents for the disclosure, recording, transfer and use of such personal information from all appropriate persons before your disclosure. [Operator Instructions]It is now my pleasure to turn today's meeting over to Mr. Ross Beaty, Chairman of the Board of Equinox Gold Corp. Mr. Beaty, the floor is yours.

Thank you, operator, and good afternoon, everyone. Welcome to the Annual and Special Meeting of the shareholders of Equinox Gold Corp. On behalf of Equinox Gold's directors, management employees, I want to thank you for joining us today. The format today is going to be, we're going to do this formal business, and try to get through that as quickly as we can. And then we're going to go and have a short update on what we're up to right now for any interested person listening in today. It's a bit of a brutal day in the market today for us. We put out our quarterly results this morning, and markets were not terribly responsive to it. I'm going to try to talk to that and explain why it's an overreaction, I think, to what was otherwise a pretty good corporate development and what's going on in the company right now. We're in great shape and have some fabulous prospects. So I'm going to talk a little bit about that right after the meeting. So for the moment, we're going to go through the business and try to get through that fairly quickly. We're holding this meeting by live webcast. And after the full meeting, we're also going to have an opportunity for Q&A, so you can answer questions of me. And in the room here in Vancouver at our head office is Susan Toews, the General Counsel; Rhylin Bailie, who's our Manager of Investor Relations; Christian Milau, who is the CEO; Doug Reddy, our COO; and Peter Hardie, the Chief Financial Officer of Equinox. We're going to apply the following process for conduct of the meeting. First of all, questions about a motion can be submitted by any registered shareholder or proxy holder using the Q&A icon on your screen. If you don't know how to navigate that system, refer to the AGM guide that was mailed to you and it's also available for download at our website. If you ask a question, indicate your name, which entity you represent, and then if you're a shareholder or a proxy holder. Unless questions are procedural or directly related to motions before the meeting they'll be addressed in the company update after the formal business. We'll also address any meeting-related questions that were submitted through the website at that time. Rhylin Bailie, our Vice President of Investor Relations, will act as a question moderator. For the purposes of the meeting today, voted on all matters will be conducted by electronic ballot. To give registered holders and proxy holders sufficient time to vote, we've opened the ballots, and we'll keep them open while they present each item of business to be conducted at the meeting. If you've already voted by proxy, it's important that you do not vote again here at the meeting unless you intend to change your initial vote. So we'll now proceed with the formal portion of today's meeting, which should take about 10 minutes. I'm going to move and second all motions to expedite matters. So the meeting will now come to order, and I'll act as Chairman. I appoint Susan Toews, Equinox Gold's General Counsel as Secretary of the meeting. I also appoint Computershare Investor Services through its representatives as scrutineer for this meeting to compute the votes of any polls taken at the meeting and to report the results to me as Chairman. The purposes of today's meeting are set out in the company's management information circular dated March 22, 2022. I confirm that the notice for this meeting, the circular and the form of proxy were mailed to shareholders on March 25, 2022. The company has received an affidavit confirming proof of mailing from our transfer agent Computershare Investor Services. A copy of the affidavit will be attached to -- as a schedule to the minutes of this meeting. Unless there's any objection, I'll dispense to the reading of the notice of meeting. Copies of the circular and other materials were -- are available on Equinox Gold's website and under the company's profile on SEDAR and on EDGAR. Our scrutineers advised that proxies were received from the holders of a sufficient number of common shares to constitute a quorum. I, therefore, declare the meeting to be regularly called and properly constituted for the transaction of business. The formal report of the scrutineer will be attached as a schedule to the minutes of this meeting. As most of you are aware, at annual meetings, most shares are represented by proxies given to management. The scrutineer has advised that a significant majority of the proxies received by management have been voted in favor of each of the director nominees and in favor of each of the other items of business. We thank you for your confidence. As this is a virtual meeting, today's voting will be conducted by online ballot for all matters. All registered shareholders and proxy holders who have properly logged in with their control number or invite code and wish to vote, will be able to see under screen all items of business to be voted on at this meeting. Please remember that if you have previously recorded your vote by proxy, you should not vote again unless you wish to revoke and change your initial vote. The polls are currently open for all items of business to be voted on at today's meeting. This means, you can vote on each item immediately or you can wait until the conclusion of discussion on each item before forecasting your vote. The items of business to be voted on and your available voting options will be visible on the voting panel on your screen. Please register your votes by selecting the: for, withhold or against buttons next to the name of each proposed director and next to each of the other resolutions. Once discussion has concluded on all matters of business, we'll provide a few additional moments for you to enter your votes. I will then declare voting closed on all matters of business. As a reminder, the online voting polls open for all items of business are open. I now present to the meeting, the audited consolidated financial statements of Equinox Gold for the year ended December 31, 2021, together with the auditor's report on the financial statements. Copies of these documents have been mailed to the shareholders who requested such statements and it is not proposed to read them to the meeting, thank goodness. We would be pleased, however, to deal with any questions regarding the financial statements during my update following the business -- formal business of the meeting. The next item of business is the election of directors. Management nominates the following 9 individuals to hold office until the next Annual Meeting of Shareholders or until their successors are elected or appointed. Ross Beaty, Lenard Boggio, Maryse Bélanger, François Bellemare, Gordon Campbell, General Wesley Clark, Dr. Sally Eyre, Marshall Koval, Christian Milau. Each nominee has confirmed that he or she is prepared to serve as a director. Equinox Gold has adopted an advanced notice of policy that requires shareholders to give the company advanced notice of proposed director nominations at the Annual Director Shareholders' Meeting. Equinox Gold did not receive notice of any such nominations for this meeting -- as a result, I declare the nominations closed, and I move and second a motion to elect each of the directors. Unless there are any questions, I will move on.

We have not received any questions.

Thank you, Rhylin. The next item of the business is the appointment of Equinox Gold's auditor and moving the second motion to appoint KPMG LLP as auditor of the company to hold office until the close of the next Annual Meeting of Shareholders and that the Board be authorized to fix KPMG's remunerations. Unless there are any questions, I'll move on.

We have not received any questions.

Thank you. The next item of business is the proposed amendment to the company's restricted shares -- the restricted share unit plan to increase the number of -- the maximum number of Equinox Gold shares that may be reserved for issuance under the plan. The plan is a key component of the company's long-term incentive program provides for the ground of time-based restricted share unit awards and performance-based share unit awards to eligible employees, officers and consultants of the company and its affiliates. The company uses the plan to encourage tenure and longevity of employment to recognize and reward significant contributions to the long-term success of the company and to align participants' interest more closely with shareholders' interest. The current maximum number of shares that may be issued under the plan is 7 million. This maximum has not been increased since shareholders originally adopted the plan in 1918. The company is now seeking approval to increase the maximum number of Equinox Gold shares that may be issued under the plan to 12.4 million shares. I move and second the motion that the maximum number of shares issuable upon vesting of restricted share units granted under the company's restricted share unit plan be increased from 7 million to 12.4 million. And that any director or officer of the company is authorized and directed acting for and in the name of and on behalf of the company, to execute or cause to be executed and to deliver and cause to be delivered, all such other documents required to give effect to these resolutions. Unless there's any questions, I'll move on.

We have not received any questions.

The last item of business is the say-on-pay advisory vote. I move and second the motion that on an advisory basis and not to diminish the role and responsibilities of the Equinox Board of Directors, Equinox' shareholders accept the approach to executive combination disclosed in the company's management information circular dated March 22, 2022, delivered in events of this meeting. Unless there's any questions, I will move on.

We have not received any questions. .

These are all the resolutions before the meeting. We will provide a few more moments for you to complete your electronic ballots. And so there'll be a pause here for, say 30 seconds.

We need to wait for a few moments. [Voting]

Okay, I can now confirm on behalf of Computershare that the polls have closed.

Thank you, Rhylin. I ask that the scrutineer compile the report regarding the results of voting on all business matters. The results of voting will be included with the minutes of this meeting and will be announced in a press release later today in accordance with the policies of the Toronto Stock Exchange. Is there any further business for the formal portion of the meeting?

There are no outstanding questions related to the business of the meeting.

Okay. So since there's no further business, I move and second that this meeting now terminate and declare the formal part of this Annual General and Special General Meeting to be concluded. Okay. Thank you very much, everyone, for that formal bit of business. I'm going to go into more -- the more -- I think the more interesting part, perhaps, for some of you, which is the State of Union of Equinox Gold and our very ambitious plans to build ourselves into a world-class gold mining company focused on the Americas. In the very first -- so is stuff up in the room, people are able to see this. So on our website, I'm going to be walking you through some slides that are up on our website, and I hope you're able to follow with me. The very first page is our cautionary note and you'll notice a lot of fine freight there that says nothing I see is to be believed. It's anything that's forward-looking as a lot of caveats in it, and you should have a look at that to understand that. So today, we appointed -- reappointed all of the Board of Directors, you see on Page 3 here. It's a very strong board, a very experienced board. I'm very happy to work with everybody here. They all contribute greatly on our committees, and I want to extend my thanks to each and every one of them for their part in building Equinox Gold as quickly as we've built it so far and as strongly as we have right now with such great prospects for the future. And I'm just going to go through on Page 4, where we've come from and where we're going. It will kind of inform where we're going. We've been one of the fastest-growing gold companies in the world. We started our business at the beginning of 2018. We had one mine in -- or one gold deposit in Brazil, Aurizona. We had another one in California, Castle Mountain. And we had ambitious plans to build ourselves from nothing into a significant operating company. This is much easier said than done, but we've done -- the very first thing we did is we started construction of our Brazil mine, the Aurizona mine. We started and completed work on a prefeasibility study for Castle Mountain, both very positive. We spun out a noncore copper asset to Equinox shareholders, which was then named Solaris Capital and put under the management of Richard Warke and his team in Augusta. And then to be an operating business in our first year, we went out and acquired the Mesquite Mine. Mesquite was a big low-grade heap leach mine in Southern California or is. It had a very short life. When we bought it, we paid $150 million, give or take, to buy that, and we've made that back and significantly on top of that and yet we have a longer reserve life today than we had when we bought the mine 4 years ago. So Mesquite has been an absolutely fabulous asset for us, a very, very successful transaction. We produced 25,000 ounces in 2018 based on that one partial year at the Mesquite Mine. In 2019, we added a very important investor Mubadala, big Abu Dhabi sovereign wealth fund to our shareholder base, and they were very instrumental in financing us for the early stages of the company's life throughout convertible venture in 2019 and another one in 2020 to support our growth. We increased our Mesquite reserves. We listed on the U.S., graduated to the TSX main board, and then at the end of the year, we announced the acquisition of Leagold, which brought us 5 -- 4 operating mines and a large development project at 3 mines in Brazil, 1 in Mexico and a development project in Brazil. We produced 201,000 ounces in 2019. And then in 2020, we digested the Leagold acquisition, sold one of the smaller mines, Pilar and because of our scale, a very rapid scale, we were added to all of the gold indexes, the GDX, GDXJ TSX indexes. Aurizona came into production. Mesquite continued its reserve life expansion that was very successful. And we started -- at the end of the year, we started construction of -- sorry, then we built our Castle Mountain Phase 1 mine started operation in 2020 of that mine and then started construction in Brazil of the Santa Luz mine. And then at the end of the year, announced the acquisition of Premier Gold. What we did with Premier Gold -- or why we did Premier Gold, as many of you will recall, is to gain a scale and at a very large gold development project in Canada, a very good jurisdiction that would offset or balance the other 3 jurisdictions we have Brazil, Mexico and the United States. And that, that asset, Greenstone is going to become the core flagship asset of Equinox Gold when it's completed in a year or so. So that was a very significant transaction. It also brought with it a smallish mine in Mexico. And we, again, have been trying to improve the quality of our portfolio, the size of the mines we have and the Mercedes mine that we got with Premium Cold didn't fit our portfolio. And so we sold that, and that transaction just closed in April this year, just a month ago. In the meantime, with that transaction, we also became a material 30% or 25% or 30% of i-80.

We're 26%.

26% shareholders of i-80, a brand-new gold company focused on Nevada, run by you and Downie, the former CEO of Premier that we bought. And we watched the great success, Richard Warke and his team have had in Ecuador with the Equinox Gold copper development within Solaris Copper. So it's been very -- all of those transactions have been very wealth creating, very satisfying to watch. So in 2021, what did we do last year? Well, we began construction of Greenstone. We took a few months to kind of digest it and make sure the team was in place. We increased our interest from 50% to 60%. We have a great partnership there with Orion. And so that is now a very major construction project, and I'll talk a little bit more about that in a few minutes. We completed a feasibility study for Castle Mountain. We've moved that from feasibility now into permitting, which, again, I'll talk a little bit about that to come. We've done a lot more work at Aurizona in Brazil where we've defined a very large upside from additional open-pit targets, but also a very large underground deposit below the open pit that will be mined in future years. We've strengthened our balance sheet. We've done a lot of team building as well. We've really fleshed out our overall team. I think we have 7,000 employees now in Equinox Gold. And you can understand that when you realize also that after only sort of 3.5 years or say, 4 years of development as a company, we surpassed -- we had more than USD 1 billion in revenues in 2021. So it was a big year on the operations side, and none of that happens without building a really, really strong team. The other thing that we did in the last couple of years is we boosted our environmental, social and governance protocols and reporting. And this is a really important thing that I'm super proud of what we've done. And I'll talk a little bit more about that in a couple of minutes, but we've been really beefing up the attention we give to the environmental, social and governance matters company-wide across the platform in every mine, in every location. So it's been a really, really busy 4 years. Our team is strong. Our Board is strong. And I think on Page 5, moving to Page 5. What is important to me is it hasn't been growth just for growth's sake, but it's been growth per share. We've actually created wealth to shareholders, account on a per share basis. You can see this on the first -- the left-hand side of that, our reserves have increased per share and our resources have increased per share. Today, we have about 30 million ounces of gold resources, reserves and resources 30 million, that gives us fabulous leverage to higher gold prices on a long-term basis as we execute operating mines that will take those reserves and resources and actually move them towards production. On a cash flow -- growth in operating cash flow per share, again, very satisfying growth since we started in 2018, and you can see those numbers here in green in the middle table. And then on a production growth per share, once again, a significant increase, but what I really want to highlight here is the growth that is yet to come. So we're just midstream now, in where we are as a growth company, we're midstream, where we have a ton of internal growth, and I'll talk a little bit about -- more about that, a ton of internal growth. And as we execute these growth plans, our operator operating cost per ounce of gold produced should go down, our financial returns should go up and all of our metrics will get better. And that's really why we're growing, trying to build scale, satisfy market needs for scale right now and actually drive our operating costs down and increase all the good things that come from having a larger, more diversified mining company. Page 6 is just a little snapshot of the 6 operating mines we have to date. Mesquite in California, again produced about 120,000, 130,000 ounces or these are our -- sorry, this is our guidance for 2022. We expect it's going to produce 120,000 to 130,000 ounces this year. Quarter 1 was a very weak quarter following a blowout quarter in Q4 last year. And I really want to emphasize to our shareholders that you cannot judge a gold mining company on a quarterly basis. You can judge any mining company quarter-to-quarter. You've got to look at a longer-term time line because things happen in this business. It's a risky business. Weather happens, things break, operating challenges happen or you move into lower grade areas in ordinary mining sequence or you have higher stripping ratios, which increase your cost on a short-term basis. You've just got to look at a longer-term time line than a quarter-by-quarter review. And I think today's reaction in the market, which waxes me a lot is really a reflection of that just watch how we do in the balance of 2022. You will see much, much better results almost certainly, unless we have more unforeseen events happen, we should have a much better year to come. And that's exactly what we guided when we put our guidance earlier this year, we guided that we were going to have a weak Q1, a better Q2 and much better second half of 2022, where we'll produce 60% of our ounces in the second half and 85% of our cash flow. And that's the thing for our shareholders to remember. Q1 was guided to be weak. It was weak. It shouldn't justify the kind of major reaction we saw in our market today. Okay. So in Castle Mountain, that's a mine just up the road from Mesquite. It's a real nice unit. We have very, very similar operating conditions there. They're both large low-grade heap leach mines. Castle Mountain's run rate now is a small scale mine, but the real big expansion is going to come when we get permitted for the larger operation there that will allow that to run on a long-term basis at a much lower cash cost than it currently operates that. Further, south in Mexico, the Los Filos mine, world-class deposit in a fairly challenging social environment, and we saw some of those challenges in 2020, shortly after we concluded our transaction with Leagold. And those challenges continued in 2021. And I think it was -- one was in August or September, the social-- the last social disruption ended. Since then, it's been a fairly smooth operation. The mine is running well right now, and we hope that that's going to continue for the foreseeable future. We've done a lot more community work. We hope that the community now understands who we are, we have more confidence, more trust and that that's a reciprocal positive relationship. So Los Filos is a core asset of ours, and it's got plenty of growth potential. But at the current guidance, it's going to run between 160,000 to 180,000 ounces per year of production. Aurizona down in Brazil, 3 mines in Brazil, Aurizona, Fazenda, and RDM. Aurizona is a big open-pit mine. It's run really well. It's made us a ton of money. We've paid off our capital costs twice over, I think, now. So it's been a very profitable mine for us over the last 2 years since we opened it up. Again, Q1 was a weak quarter. It shouldn't be like that the rest of the year, on target for about 120,000, 130,000 ounces of gold per year. Just like other places in Brazil, the first quarter of every year is the middle of the rainy season. The rainy season really hammers production, but we get that back when the dry season comes along later in the year, and we expect this year will be exactly like last year when that identical thing happened. And then smaller minds at Fazenda. What is interesting about Fazenda is that it's right in a belt called the Bahia belt, very close to our new Santa Luz mine such that they're going to run kind of like Mesquite and Castle Mountain do as a unit where there's plenty of synergies. So Fazenda and our new Santa Luz mine are very close to each other in Bahia state, lots of upside there. They've been running for a long time. Each mine -- each of those mines, especially Fazenda has been running for 30 or 40 years, and we expect it's got a long life ahead of it. So our guidance this year is for 60,000 to 65,000 ounces for Fazenda and about the same from Santa Luz once it's up and running fully later in Q2. And then at RDM, RDM has been a frustrating mine. It should produce more than it has and it should do better than it has, but we've been doubled by some shifting sands in the regulatory environment in Brazil. And in that specific area, ministers is a state that RDM is in -- and so we've been having some difficulties doing what we've done for years and years in recent years permitting and having approved permits to increase selling, the tailings downs. And this year, we're adding some problems with the regulators. And it's probably, I hope, at least just a kind of a bureaucracy issue. We're hard at work on this. We've flagged today in our news about our quarter that if we cannot resolve problems, we may have to shut the mine down for a while, we're hoping that won't happen. But that's the only thing that's stopping that thing from hitting guidance from mine otherwise, is doing well. So those are the operating mines. The new -- we're full of growth. We have 5 big growth projects in the company. The 2 biggest right now are getting our Santa Luz mine up and running properly. We did our first gold pour. And I'll say, just to put Santa Luz in context, Santa Luz is the third mine that Equinox has built in the last 3 years. So we built one mine a year. Each one of those mines. Aurizona and then Castle Mountain and now Santa Luz, each one of those mines has been built on time, on budget and Santa Luz is no exception. Our budget was about $100 million. We forecast a year ago when we started construction, we'd be pouring gold by the end of Q1 and we hit that target and our budget was $100 million, notwithstanding Covid, notwithstanding inflationary pressures. So let not the gold analyst community say that inflationary pressures necessarily mean capital costs will blow out of budget. They don't always, and we posted trial for that through Santa Luz. So we're commissioning it right now. It's going to be a nice, long-life mine. We're very excited about it. It's also a very -- not unique, but it's using a technology that's really world-class. It's really leading-edge, we're using -- so we're using...

The resin.

Sorry, we're using resin, resins rather than cyanide to leach the gold from the rock and this is something we hopefully will be very proud of showing as opposed to trial for operations that require that technology as opposed to cyanide. So anyway, that's under commissioning our forecast this year, 70,000 to 90,000 ounces of gold. And then on an annual basis, about 100,000 ounces long term. Santa Luz a happy story. And then in Greenstone, this is something I have to dwell on a big. Greenstone is a great, big development project we acquired from Premier. We got construction going last October -- September, October. We had a groundbreaking ceremony. We've got fantastic social relations with 5 First Nations communities, lots is support from government, lots of support from the local community. It's a great big ore body. It's going to produce about 400,000 ounces a year for the first 5 years. It will be Canada's fourth largest gold mine. So it's a big, big deposit, low cost, long life, everything you want in a gold deposit. The problem is it's not in production today. It's under construction. And our budget for this was USD 1.1 billion.

USD 1.23 billion.

USD 1.23 billion bigger part, USD 1.23 billion. When we announced construction last October. There's a lot of nervousness by investors about big Canadian gold mine development projects because there's been a number of companies that have fallen on their face and had big capital blowouts and construction schedule delays. COVID didn't help any of this, but it's a reality. And we have had to fight that wall of doubt that we're continuing to fight, especially today because yesterday, Iamgold put out a rather disastrous announcement that their Côté project in Ontario has had big construction cost increases and schedule delays. And I think investors are just tarring us with the same brush as they now tar Iamgold. So this has caused a lot of nervousness and a lot of questions we've had today have been, are you on schedule, are you on budget? Are you okay with estimates that you've put out where we've said we would be up and running by the first half of 2024, and we're going to hit our construction budget of USD 1.23 billion. And our answer to that is yes and yes. At this moment, we're on schedule, we're on target, and we expect for all sorts of detailed reasons that maybe we can go to if there's questions here, and I'll get Doug to answer these or Christian. We are expecting this project to be a successful project currently track, we've got about 20% complete. We are tracking on schedule and on budget. And we hope that we'll have the same great record. We've had at the other 3 mines we built from scratch in the last 3 years where we will be able to say that when we complete construction in early 2024. So growth -- what are we about? We're a value stock right now. We're a growth stock. Why are we -- where are we in our current kind of growth platform? Well, we've had to grow through M&A until now because you can't grow from nothing into a large mid-tier stock without doing M&A, if you want to do it quickly. So we've done that. But what we have now, in-house, in assets we already own is we have these 5 big internal growth projects that will take our production up by another approximately 600,000 ounces. What are they? Well, the Santa Luz that, that's going to be ramping up to full capacity. It will be running at 100,000 ounces a year from sort of 2023 on, and that will have another 30 off of this year's guidance of 70,000 ounces. The big one, of course, is Greenstone. Greenstone is going to add about 240,000 ounces to our production base at a much lower cash cost. So the other thing that happens when you build scale is you drop your cost down. You have more ounces offset or more ounces to offset fixed costs, particularly overhead, for example, and these are bigger mines, they should have a much lower cost profile that will drive Equinox into a very large earning cash flow generating business, ultimately dividend-producing business in a few years. Beyond Greenstone, we have a lot of growth coming also at Los Filos. When we're satisfied about the social stability and piece there and the fact that the communities are all on the same page as we are with respect to increase in that mine, making it a longer life of mine, creating wealth for a lot of people in the local community over the long term. We're going to add about 50,000 ounces simply by going into higher grade areas in the next year or 2, where that's programmed in the current mine plan. And then we're hoping to build a carbon and leach plant, which will allow us to increase recoveries and add about another 75,000 ounces of incremental production from Los Filos. We're not going to do that until Greenstone is complete. But we think it will be a very relatively cost-efficient way to boost our production, decrease our costs and make Los Filos into the mine that we really saw it could be when we acquired Leagold. And then at Castle Mountain, we produce currently about 20,000 to 30,000 ounces a year from the small-scale heap leach operation, but we're permitting now. We just submitted our permits at the end of March to go up another 180,000 ounces to make this about a 200-and-some-thousand ounce a year mine for about a 16-year mine life on current reserves. It's a brownfield development. This was an existing operating mine during the '90s and early 2000s and we think it should generate a lot of value for communities, for governments in California and, of course, for our shareholders and yet be done in a way that is environmentally sensitive as possible. So that -- when we get the permits for that expansion, it will take another year or 2 to build. We'll do that again after Castle Mountain is finished. So we'll be looking at new production coming from Castle Mountain, assuming we have a 2-year or so of permitting window, sometime in '20, say, 2025, 2026. But that will -- that's going to sequence very well with Greenstone and then Los Filos and then Castle Mountain. And then we have a very cool growth project in Brazil at the Aurizona mine where underneath the open pit, we have a large slice of gold mineralized material, which is going -- you're going to see some results from that fairly shortly. And that should add, when we can combine that with open-pit production. We should add about 30,000 ounces a year from the underground. I personally think it's going to be more than that, but that's kind of what we're showing right now. So all those -- those are internal growth. We're fully financed for these projects. We should have one coming after the other. And when we have all done, we're going to add about 600,000 ounces. If we do nothing else, and so that's why we say confidently, we should have gold production over 1 million ounces in the relatively near future. And that's always been our strategy. 1 million notice isn't anything particular. It's just a number, but it represents scale and scale counts. And scale counts for the reasons shown on the right-hand side of that eighth slide there, you get a revaluation when you have scale. You get a revaluation because you're bigger, you're stronger, you're more diversified and you should have much higher cash flows than we have right now as you get more scale for reasons I've already mentioned. So the multiple we have today of maybe 0.6 or 0.7, should go up above 1 if we're going to be comparable to any of the other large producers when we get to that scale. So that's kind of the operational review. I'm going to finish off with 2 things. One, a little talk about what we're doing on the responsible and optical mining side and then finish off with a few words about gold. So this is something that the ESG stuff, it's just so very important today for every company, every mining company, every company period. What do you do? You look after your environment as best you can. You look after your employees, you try to have them safe, go home every day safely and not end up in the hospital, no fatalities. You have to -- we absolutely have to work in our greenhouse gas emissions, try to reduce them as much as possible, reduce our energy consumption as much as possible. We have to work with our communities. Our communities support us, and we have to support them. So it's just basic good business to do this kind of stuff. We actually have had a pretty good record everywhere. We're very proud. I mean we didn't lose any time for COVID -- during the COVID pandemic. This is very different than most companies. We had to close mines because they were having sick employees. We didn't have any production days lost. We supported community education programs, vaccination programs. Every one of our mines tested. We had doctors, nurses available and it really showed in results. And then today, we published our 2021 environmental governance and social report, which you can now read at our portal, ESG portal on our website, please read it. Look at our governance, look at the attention we spend on human rights. Look at our achievements. Don't just look at our words, look at what we've done. This is what I'm proud of. This is the focus of every single one of our senior management team around this table and beyond, and they are engaging the whole company to look after our employees, look after our communities, look after the environment as best we can. Employ good human rights policies, good grievance policies, across the board, diversity, inclusion, all that stuff. It's really important stuff, and I'm just so proud of our team for having focused on this so much. And again, you can -- we walk the talk. You're going to see those results in our report. Please have a look at it. It's good stuff. I really recommend it to you all. Okay. I'm going to end on -- and then I'll open it to questions. I'm going to end on a couple of slides on gold. This is our business. We exist to give investors leverage to gold prices, leverage immediately with a large production base. So if gold goes up $100, and we're producing 700,000 ounces a year. For example, we're going to have increased income of $70 million. It's just a straight line. And then also on the capital side, on our basic assets, our reserves and resources, if we have 30 million ounces of reserves and resources and the gold price goes up $100 bingo. That's a very, very significant bit of capital leverage for every single owner of this company. And that's why we exist. I don't think we would have started Equinox Gold 4 years ago, had we been bearish on the gold price. I mean why would you build a gold company in that market. But we weren't. We have a very bullish gold was trading for about 1350 in early 2018. And I think we definitely got that side right. All of the macro environments why gold should perform well right now, they're actually happening. Gold has responded. I confess to being disappointed that it hasn't responded as well as I expected it would. I thought gold will blow through $2,000 an ounce but it has. It's been pushing it a couple of times last year, early this year, it notes $2,000 an ounce, but it's still not done as well as I thought it would given all of these incredibly bullish macro fundamentals on the demand side. I'm going to talk about demand because most people focus on demand. And then I'm going to talk about supply because very few investors think about gold supply as a bullish factor, but it is. Well, if you look on the supply -- on the demand side, I mean, how could you have a more bullish fundamental picture for gold than we have today? You have global geopolitical crisis. You've had an absolute binge of government spending and government debasing of currencies, not just due to COVID, it happened before Cove. COVID just added field of the fire. You've had this explosion in sovereign debt. And it surely didn't take a rocket scientist to expect you would have an inflationary outcome from all that and a rise in the gold price. Well, both of them happened. Inflation is here. Inflation is here, it's going to be here for quite a while. I just don't see that the Fed or any Central Bank has any ability to really stem inflation significantly. In fact, they actually benefit from inflation because it reduces their debt to GDP ratio. It's 1 of the solutions governments have to get out of debt. But they talk the talk. The -- Paul has been talking about more rate increases, more rate increases. So that scares people and the thinking, oh, well, we're actually going to do something to reduce liquidity that has been injected into global markets and reduced inflationary impact. I don't think it's going to happen. I just don't think it's going to happen. I think even if you increase rates the way he say, he says he's going to do -- you're still going to have net negative real rates. And so why would anybody buy bonds in that environment? In terms of macro markets -- or stock markets, I think you're going to have a significantly reduced froth in major markets like we've had in the last few years. Why would anybody buy gold when major markets are going up 20% a year. That party is over. I think the crypto party has waned. Certainly, cryptos have a place. They're a form of a store of value in a certain sense. I'm not dissing the value of crypto in certain instances, but I don't think this mania of cryptos replacing gold is a logical story. We've seen the mean stocks, the technology stocks, all the things that they've all weakened. Well, they were overpriced. And I think in that environment or in this environment we see ourselves in today, gold becomes a significantly interesting alternative asset that people ought to look at. Generally speaking, on a 50-year trend, investors, institutional investors, particularly are underweight gold. A little bit of money going into gold is going to make a big difference on the price, and it's also going to protect them from weakness in other major markets. Lots of people are buying gold. The central banks are buying gold. The U.S. mine had our second record year last year of gold investors buying coins, China has consumed a huge amount of gold recently. India imported a record amount of gold in 2021. And of course, gold ETFs added a lot of gold last year. That's one of the reasons why gold has been strong. So I think that all of these reasons are reasons that should compel gold as being a continuing store of value, I don't see it underperforming outperforming in the next -- in the balance of 2022 and beyond -- and I think currently, it's last week or 2 of corrections going to be fairly quickly corrected again or recorrected, it's going to -- goals will continue to go up in price as people realize that the Fed hasn't got a lot of option and it's not likely to throw the market into recession as it increases rates, if it increases rates too much. And as soon as the market relicense rates won't be increased either the dollar will weaken or people will just go back into gold as a good, safe place to hold value as a store of value. And then on the supply side, on Page 11, you've had a lot of -- and this is really across the board for the whole mining industry. Not just have you had a lot of noise in Russian gold production and Russian mine production from the war and from people sanctioning in Russia, but the fact is that today, gold mines are harder to find. They're lower grade typically, there are more difficult places to mine and they take longer to go into production. So gold is relatively inelastic in terms of the supply response to higher prices. Price goes up, you're just not going to see a supply reaction for 5 or 10 or even 15 years, simply because of the long time it takes to discover, develop and build mines, get social license, political license and so on. And that's one of the reasons the total gold supply has been flat since 2014. So the supply side is bullish, the demand side is bullish. I'm very optimistic that in the next year or so, we're going to have continuing strong gold markets. And in that environment, Equinox Gold should be looked at as a core investment for any gold industry investor. We have diversity scale, increasing gold production, solid balance sheet. We don't need to do any more equity issues. We can finance everything we've got with our own cash flow and capital resources. And once we hit that 1 million ounce of production, we're going to click our heels and say, temporarily mission accomplished, there won't be any more M&A until we get there as far as I expect. And that's the story. We're all pretty proud of what we've built. Again, I'm very happy to deliver this report to our shareholders after only -- this is only the fourth time we've done this since we started and it's -- my joy of, and my appreciation to the whole team for getting us to where we've got to, which, as you can imagine, is a huge, huge, huge amount of work and requires a lot of talent, is only modified a little bit by the sort of knee-jerk reaction that investors place occasionally on quarterly results. I mean, a little bit -- spent a little event today that please look beyond our first quarter results to the big picture, look at the forest, not the trees. And if you look at that, you're going to see a fabulous company, well managed, well financed, tons of growth, in great shape, that's coming of nowhere and in just 4 years, has built itself into one of the world's great gold companies. More to come. With that, I think I'll close and open it to questions.

Sure, we only have one question so far. [Operator Instructions] So the only question we got so far is that it was as you've allude, you had rather roughly on the market today, what sort of catalyst can shareholders look forward to in the upcoming months that will hopefully support the share price.

Yes, it's Christian here. I'll take that. We have a period here where we're focused on execution, and it may seem a little bit boring at times. But what we really want to do is continue to show the delivery of our plans. And again, as Ross said, it's over multiple quarters, not just one quarter. So in the near term, they'll be hitting sort of a stride in Santa Luz and hitting commercial production in the next sort of quarter or so. On the back of that, we're going into the summer season at Greenstone. So there's going to be a heck of a lot of work going on there with the snow gone now and the team ready and ramped up. So you're going to see lots of photos, lots of equipment arriving, buildings going up, derisking that project in a major way this year. And we hope to get investors and analysts to site, call it early in the fall in September and see all that work for the first time ever, because during COVID, we weren't able to do site visits. So you're going to see regular updates on that. You're going to see gradually increasing production and reducing costs over the year, which will show very heavy cash flow orientation to the second half, as Ross said 85%, and costs coming down below $1,300 is the plan. And also, there will be periodic drill results as we continue to drill and mostly in areas that are prospective or shorter life mines. That will continue to happen. We also have continuing focus on studies and work at sites that have expansion projects that are a little bit further behind Greenstone. So Aurizona underground. If we get access to a portal there late this year or next year, we'll be able to start going underground and providing updates on that. Permitting at Castle Mountain, it might take 2 years plus, but obviously, any updates on that, we'll be able to provide and you'll just see the production base start to stabilize as Santa Luz comes up, the mines that were expected to have a weaker Q1 start to stabilize, call it, in Q2 and Q3 here. And so there's a lot on the go still this year despite it being more internally focused. And we'll continue to basically terminate and look after our investment portfolio and our any other small assets we have in our portfolio to service value like we've done very successfully with Solaris and i-80 in the past.

Perfect. There are no further questions. So I'll turn it to you for closing remarks, if you have any.

I have none. I think I said everything. Thank you all very much for joining us today, and I look forward to speaking to you again 1 year from now.

Perfect. Thank you, operator. You can now conclude the call.

Thank you. This concludes the meeting. You may now disconnect, and have a pleasant day.