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

Thank you for standing by. This is the conference operator. Welcome to the Equinox Gold Corporate Update on ESG Performance and Targets. [Operator Instructions] The conference is being recorded. [Operator Instructions]. I would now like to turn the meeting over to Rhylin Bailie, Vice President, Investor Relations for Equinox Gold. Please go ahead.

Thank you, Ariel, and thank you, everybody, for joining us today for our first ESG-focused investor call. We will, of course, be making a number of forward-looking statements today, so please visit our website, EDGAR and SEDAR to read the rest of our continuous disclosure documents. We will also do our best to avoid using too many acronyms, but there may be a few that pop in there. So there is an acronym slide available on the presentation deck that you can download from the webcast. I will now turn the call over to Christian Milau, our CEO, for opening remarks.

Thanks, Rhylin, and welcome, everyone, to the first call. And this is on the back of our second ESG report. So if you want to have a look at that, please go to our website. We continue to make improvements on our disclosure, and we're really proud of the work done over the last year. I just want to briefly discuss ESG management strategy, introduce the team. Mostly, it will be myself, Dennis and Georgina talking today, but most of the rest of the teams in the room is really is a team effort, and we do have a working group that's very active in ESG. And I wanted to give them all a chance to answer your questions at the end, if you have any. But I want to briefly discuss ESG strategy and importantly, our vision, which is to be a sustainability leader which comes straight from the top. We have very strong engagement from our ESG Committee and our whole Board and particularly Ross Beaty, who is an environmentalist at heart, but he also happens to be a miner. And we believe strongly in that the 2 can coexist. And again, we're temporary custodians of the sites where we operate, and we want to leave behind a positive legacy and to reclaim the sites in a good manner. And so all of that filters in and through everything that we do in the way we think here. And so we're committed to the strategy right down to the people with the boots on the ground. When I turn over on to Slide #5 here and look at our vision and values, as we say very directly there, we want to responsibly and safely produce over 1 million ounces of gold per year while ensuring that we're creating value for all stakeholders. So this is a strategy that we've had in place for a number of years now. It encompasses all the things that we believe in, and we do want to have tangible economic and social benefits that our community partners will endure beyond the life of mine as well. And when you look at our values of excellence, integrity, accountability and teamwork, which define our culture, they also guide all of our actions. And we hope that you can see that throughout the way we operate in all the locations that we're in. And also in terms of an ESG strategy, we really believe fundamentally, we're not just doing this as a window dressing or a greenwashing exercise. This has to fundamentally impact our business. And nowadays, particularly, we're seeing greater investor demand that companies reduce their impact, their emissions, their environmental impact as well and report on that progress in a very transparent manner. And many investors will just simply not invest, as you know, without a comprehensive ESG disclosure and improvement platform in place with various companies in our sector nowadays. So one key area that we've been planning and working on has been our GHG reductions today. Dennis will talk a bit more about that later. But we also believe, fundamentally, when we look at an area like that, it needs to be good business as well as good for the ESG front. And what we're doing is looking at areas where we can actually reduce our footprint, maybe save us some money, potentially reduce the tax burden in the long term. Here in Canada, there will be $170 per ton tax by 2030. We want to do our best to mitigate our footprint before that time. And also, we think in the long term, too, the cost of capital is going to go up for either debt financing or equity funding and investment in the long term if we don't address this. So it's coming very quickly, and we found in the last couple of years, the focus on this area has been very, very big. And so it's really an integral part of our strategy. And turning over to the ESG strategy and performance. I'm just going to briefly touch on a couple of slides here and then pass over to Georgina and Dennis. When I look at Slide #7 and the 2021 report card, we always report on this in our management circular in our year-end meeting that Ross attends with us. But I just wanted to highlight, we're very proud that we've been able to improve on a few of our metrics. We've improved our total recordable injury frequency rate by almost 20%. We've improved our significant environmental incident frequency rate by almost -- or over 50% with a good results over the prior year for a young company. We're also starting to implement in areas such as the Mining Association of Canada towards sustainable mining protocols. Dennis will talk a bit more about that. We rolled out an Enterprise Risk Management system across the organization, which goes from the ground up right up to here to Vancouver in the corporate office. And we also want to acknowledge areas where we haven't achieved the goals that we intended. One particular area, of course, is the blockade that we had at Los Filos in the middle of the year. We're hopeful those issues are behind us. And I know Georgina will touch more on that, and she has some intimate knowledge of that situation and will cover that in a slide later on. But we're really looking to achieve a significant improvement in our ESG ratings as well on the back of all this. And despite expanding our disclosure with quarterly online reporting and some further key metrics, we hope that over the next few years, we can just continue to evolve and address the gaps that we still have, and we acknowledge those at this stage. And over the long run, we just want to make gradual continual progress, and that's one of our key fundamental plans here. Turning over to the next slide. on the 2021 performance highlights. I'll just briefly touch on this again. We've been really working on collecting baseline data required to understand things like our energy consumption and GHG emissions. During 2021, we set some short-term targets, reducing our emissions by about 5%w, we achieved those last year. In the next 12 months, Dennis is working very hard on setting some additional medium and long-term targets. We want to take the time to do that and methodically think through that and have a plan and not just set a 2050 target for net zero and not to have a plan to back it up in the mid and shorter term. Also during 2021, I'm very proud of how all of the sites around the world actually 2020 and 2021 operated and dealt with COVID. And I think we made a positive impact on our communities and our workforce. People felt safe to come to work. We've implemented strategies that are all tailored to the local sites. And we've really had very little, if almost no disruption, a material way at any of our locations. I'm going to turn over now on to the next slide to Georgina.

Thanks, Christian. We wanted to focus our reporting efforts to the issues that are most relevant to our business and to our stakeholders. For that, we hired a firm to conduct this materiality assessment and they used artificial intelligence to identify issues of interest, relevance and impact in sources like online news and media, corporate reports of our peers, new regulation and policymaking, voluntary initiatives in the countries where we operate. And out of this extended data analysis, we came up with 23 topics that are most relevant to our business today. With those 23 topics, we then sent out a survey to our direct stakeholders that included employees, contractors, investors, directors and our community partners. And in that survey, we asked them to run those 23 topics in the order of most important for them. The results of both the external data sources and our stakeholder survey results were plotted in the matrix that you can see in this slide, ranking them from low to high importance. From that analysis, we identified 9 key issues that are most relevant for our business and our stakeholders. And although all of the topics are important, we make sure that we do report on these issues. So now we are going to turn -- to start with the governance aspect. We know that the governance is what guides our -- has our policies and guide all of our actions as a company. So as I already mentioned, we have 3 layers of ESG leadership and oversight. We have the Environmental, Social and Governance Committee in the Board of Directors that overseas performance and provides feedback to our ESG strategy. We also have ESG working group comprised of the VPs of each relevant department. And this group meets regularly to discuss, develop and implement our strategic initiatives and plans. This group is also accountable for ESG performance. And of course, we have our site teams, employees and contractors who are responsible for implementing our strategy on a day-to-day basis. If we continue to the next slide, I would like to highlight 3 key achievements on the governance side that we had in 2021. We published our environment and climate change policy as well as our social responsibility and human rights policy. These 2 policies are very important because they state our commitments that we have as a company, and it states the principles that guide our actions. Also by the end of 2021, all of our employees, directors, contractors and management completed the code of ethics and policy compliance training. This was important to ensure that everybody understands what our principles are in our day-to-day performance and actions. And this training included information on the use of the whistleblower mechanism that we have. In 2021, we received 44 submissions through the hotline. All of these submissions have been reviewed and addressed. And we can say that people are comfortable on using these to raise their issues because we see that they are indeed using the hotline. We also committed last year to achieve 30% of female representation on our Board of Directors by the AGM of 2023. If we go to the next slide, during 2020, we became members of 4 important associations that we believe are the ones that most represent our profile as a company. And as signatories of the United Nations Global Compact, we are committed to its principles for environmental protection, human rights, labor standards and ethical business practices. Also compliance with the responsible gold mining principles of the World Gold Council has been reflected in our policies and standards. We are -- also, as Christian mentioned, we are implementing the sustainable mining protocols of the Mining Association of Canada at all of our operations. And in regards to the Cyanide Code International Management Institute, we have certified 2 new mines in compliance with the Cyanide Code in 2021, and we have now 3 certified mines and are expected to certify 3 more in 2023. Regarding reporting frameworks, we have significantly increased our disclosure to include GRI and SASB indicators in our 2021 report. And last year, for the first time, we reported also to CDP and publish our tailings management overview report. Now going to the industry standards. I already mentioned the TSM protocols. We have set the target this year of achieving 75% to level A of all the indicators by the end of this year. So for that, we have conducted self-assessment at all of our operations to identify where the gaps are. So we can focus our efforts more efficiently to reach this level, and we want to complete 100% of indicators to Level A by the end of next year. In regards to the responsible gold mining principles, we are also working to achieve full compliance by 2024. This is following guidance of the World Gold Council that allow a 3-year period of implementation to the principles. As members of the United Nations Global Compact, we have also conducted an analysis of the Sustainable Development Goals that are most relevant and directly that we can impact more directly with our activities. So we are focusing initially our efforts to 4 SDGs that we believe we can have a very positive impact and contribute to the achievement of these global goals. The idea is to once we focus on this, we can be increasing our focus also to other goals. We go to the next slide. I'm going to turn it over now to Dennis, our Vice President for Health, Safety & Environment.

Good morning, everybody. Yes, probably the -- obviously, the principal highlight here is zero fatalities, and we're very, very proud of our safety performance across the company. I want to emphasize that the results that you see here, the 3.05 total recordable injury frequency rate and the 0.68 lost time injury frequency rate they're both per million hours worked, not 200,000 as is normally reported in Canada and in the U.S. because we're a more global company and because we have more mines elsewhere we choose the 1 million manhours to report against. A couple of things in the slide, we've got a couple of very good initiatives that we've started in the last year or so. One of those has been our monthly incident review where we have the C-suite, we have senior management. We have management from all sites attending a call that goes through the instant investigations of significant incidents across our company. So we're able to really analyze the adequacy of the investigation and ask a lot of questions and really make sure we get the most out of the investigations in terms of learnings for all of our sites, which has been a very positive thing for us. The other thing is we've introduced an Annual Safety Award. Our first award was our Chairman's Safety Award. It was basically the site that had the best total recordable injury frequency rate across the company. That's now morphed into not only that award but into the COOs award, which is for the most improved total recordable injury frequency rate and the CEO's award, which is a very exciting award. I think it's the safety. We have safety leaders from each site nominated to a panel at corporate, where the person selected. We have a winner selected out of the nominations. This year, we had a first, second and third nominated workers have been given these awards. And I've met each of those and has been treated very, very -- it's been very exciting to be able to meet these people and the sites are very, very proud of these people at each site. And so it's been a very positive thing being taken very well. Thanks. And now I'm going to hand over to -- on the public health side, sorry. I think Christian sort of said everything. I think things are toning down at our sites when it comes to COVID. But we're quite proud of the fact that we're able to maintain the health and safety of our workforce and not lose any days of production due to COVID. It's been a very -- we tried to handle them very successfully. Next slide. And now back to Georgina for the strategy on social engagement development.

Thanks, Dennis. Our strategy for social engagement and development is based on 3 principles: engagement, participation and collaboration. These principles are the foundation to create sustained economic development and improve well-being in the regions where we operate. And these principles also are the basis for developing all of our standards and tools, procedures that our sites have in their engagement with local communities. We now turn to the next slide. We have more than 20 communities at our sites that they consider as being local. So these are the communities that are closest to our mines. And we would recognize that local employment and procurement opportunities, business opportunities for these communities is of very important relevance and importance for them and for us, of course. All of our sites support and contribute to improve well-being in these communities from promoting programs to promote sports with health campaigns, cultural events and also in productive projects and income-generating programs. But again, employment and business opportunities at the mine is most relevant, so we are proud to say that almost 100% of our workforce comes from the country of operations and more of 80% of our workforce also comes within the state or the province where our mines are located. This is very important for us because we are promoting and are hiring or giving priority to hire locally. Also, last year, 95% of our procurement spend went to in-country suppliers and more than 20% to the local municipalities where our mines are located. So all of this contributes to the economic development and well-being of the regions where we operate. If we go to the next slide, Human Rights has been a very important focus for us in 2021. We approved, as already mentioned, our social responsibility and Human Rights Policy. These policies takes our commitment to respecting the rights of all people and contributing to improve the quality of life and sustainable development of the areas where we operate. We held last year a training course for our leadership teams and also hire independent consultant to conduct a human rights risk assessment of all our operations including 2 site-specific assessments at Los Filos and Aurizona. The risks that were identified were entered into our Enterprise Risk Management System, so we could monitor and mitigate and avoid any issues or negative impacts on human rights. These assessments also help us to ensure that our actions are not encouraging any human rights and at the same time, identify areas where we can also contribute positively for these areas. The assessments focused on the areas where we can have a greater impact for the right holders. So this includes labor and working conditions, community environmental health, community cultural, social and economic rights, indigenous people's rights, also land's rights and security and, of course, ethical business and practices. Now the next steps on this area in 2022, we are developing a human rights due diligence framework so that we can make sure that we have a system in place to regularly identify and mitigate any potential impacts on human rights. Going to the next slide, please Rhylin. Inclusion and Diversity, as mentioned, we are also very committed to it. We committed to 30% representation of women on the Board by 2023. We also recognize that diversity is a wider topic than just gender. It includes also other types of backgrounds. And we want our workplaces and our workforce and representatives from the Board to management at all levels to be representative of the communities where we operate. Currently, the percentage of female employees at each of our sites really varies very significantly. We have 10% of Mesquite and then 37% at Greenstone, for example. 14% of our direct employees company-wide are female, while at the Vancouver office, this percentage goes to 35%. So in our operations, we are in the average that is considered to be the average for the mining industry globally that has been established by the World Bank in the study conducted in 2019 to be between 8% and 17%. So what we did in 2021 in this regard was to review our hiring processes, and we make sure that we use inclusive language and promote diversity for the candidate. So we focus on removing barriers for candidates from diverse backgrounds to apply to job positions. And also last year, we started participation, and we actually just finished that program. We joined the United Nations Global Compact target Gender Equality Program where we join other companies in a journey to learn from each other, learn what has worked to increase diversity in the workplace and learn from each other. So this program is helping us in developing a diverse strategy company-wide that we are developing this year 2022. We go now to the next slide. In April of 2021, we acquired 60% interest in the Greenstone project in Ontario. We are very proud of the work that the team at Greenstone has been doing in building trustful and strong relationships with our indigenous partners there. The project already had long-term relationship agreements in place with 4 First Nations and the Metis Nation of Ontario as well. They're currently working very well through implementation committees to make sure that all the agreements in place are achieved. We are committed also to ensuring that all the community members are participating and benefiting at every type of project development and then during operations when we start operating the mine. Right now, we're only just over 6 months through a 2-year build. And so far, more than 40% of the contract value has been awarded to indigenous businesses to date and more than 20 indigenous joint ventures have been created to support project development. We are also working with our indigenous and community partners to run training programs so that community members can get the skills required to obtain jobs for the mine operation phase because we know that those jobs will last for the whole life of mine and they create longer-term opportunities either with Equinox Gold and but also with other projects in the region. Actually, if you haven't done so, we have a short video in our website with highlights from the groundbreaking ceremony conducted last year in October. And you can hear there some comments from all of the leaders of each of the indigenous communities with whom we have these agreements. Going to the next slide. From a community engagement perspective, in 2021, we focus our efforts on public health not only because of the COVID-19 pandemic but also raising awareness to other types of illnesses, and we conducted health campaigns, for example, in different sites in the different countries where we operate. We started increasing our face-to-face interactions as the restrictions of COVID-19 also started to being lifted in the different places where we operate, but we make sure that even though maybe the face-to-face engagements were being limited. We make sure that communication was always open a channel communication was always open, especially to hear any complaints or concerns from the communities where we operate. So in 2021, we received 137 complaints of which most of the concerns were regarding environmental issues, such as related to water, related to dust, noise and vibrations. And at the end of this year, all but one complaint has been addressed and resolved. And that one complaint that was still ongoing this year has been addressed already and resolved. And I think that it is important also to mention that we encourage our sites to report all complaints or concerned received by communities because what matters is that we listen and resolve these concerns. We began standardizing also last year, our reporting a feedback. So we can better analyze where areas to prioritize our efforts are, and we can minimize any adverse impacts and find areas where we can have most meaningful contributions. Next steps in this year 2022, we will be implementing or continue working towards the implementation of TSM protocols, whereas I already mentioned, our target is to achieve Level A in most of the indicators by the end of this year. And we are also working to develop our Equinox Gold social management standards that we provide a guide to all of our sites to have consistency and that can establish what are our commitments and the minimum that we want to get our performance and from there any improvements that we can make also for continuous improvement. Going to the next slide. Of course, yes, Los Filos is a very public -- we have a very public committee issued during 2021, the blockades we had at Los Filos mine. Los Filos is a complex, mine site is large. We have community agreements and land agreements and social collaboration agreements with 3 different communities. And we try to always keep a good balance between -- or among the 3 communities in the benefits that we can provide to all 3 of them. We knew that Los Filos had a history of blockades from the start of its operation in 2007. And this year, what happened is that one of the communities and one of the union sections wanted more benefits that exceeded the already accrete in contracts of the benefits that were agreed with the company. So it's important to mention that the issues raised in the blockades don't -- they don't have to do with the mine operation. It's been very clear to our communities and workers that they want the mine to be operating. But what we understand that they want to have more benefits, more employment opportunities to their own people but we need to make sure that we, as mentioned before, that we keep a fair balance to all of these 3 communities with whom we have agreements. We cannot offer benefits or opportunities to one community that would disadvantage another. Throughout these experiences at Los Filos, we have always focused our efforts in building strong relationships, regaining trust between the company and the communities and we always have prioritized open and transparent dialogue. We believe that any disagreements can be resolved through dialogue. And for example, last year in November, I think a very important meeting that we had with the 3 community leaders in the same room with Christian, our CEO; and our Chairman, Ross Beaty, where we could all share experiences and expectations and the will to take the mine forward in a different type of relationship for the years to come. If we go now to the next slide on community development. We do understand that the importance of such economic contributions that mining brings to the committees where we operate. Last year, we contributed more than $40 million in community contributions, direct community contributions that benefited infrastructure, education, sanitation, health. Also, the economic benefits through wages and salaries that as I already explained, most of our -- the vast majority are from the -- of our workers are from the communities where we operate, that reached almost $200 million last year. And that is in addition to the procurement spend that last year accounted for more than $190 million. All of these contributions is stay in the areas where the mines are located, benefiting not only the communities but state provinces and the countries where we operate. I am now going to turn it over to Christian to talk about one of our most important projects, infrastructure committed projects of last year.

Yes. Thanks, Georgina. I did want to jump in and just talk to this one about the Aurizona village and the water situation there. It's a site that's very close to my heart. It was the first project we were involved in actually here. And it's in the northeastern part of Brazil, but the northwestern part of the Maranhao state here where the mines located and it's a very subsistent farming and fishing area, and we're the major industry there. And so we're very proud to be a key part of society there. In late March last year, there was an exceptionally heavy rain period, it does rain there during that period of the year, but almost 500 millimeters of rain happened in 48 hours, which is 1 in 10,000 year rain events. And again, we all have to acknowledge that those things are becoming more common. What we ended up with was widespread flooding in the region, which washed out many roads increased the turbidity in waterways, impacted local sources of drinking water, which interestingly enough was very similar to what happened here in British Columbia late last year. Roads were washed out, turbidity in water real impact on the community here as well in a wider way. Government took the lead here in Vancouver to try and deal with that in British Columbia. We took a very responsible lead, we think, on helping to resolve the situation there in Maranhao. And the mine site team, I have to give them credit, they jumped to the situation very quickly, restored road access to the village, delivered bottled drinking water, installed and filled potable water tanks throughout the village. And we helped the repair and upgrade their water treatment facility, which was outdated and not being managed very well and really was not capable of managing that level of change in impact. We offered to work with the community very closely. We continue to deliver bottle water and potable water while we worked on that actual project. We actually delivered, and you can see in the picture there, I actually got the visit and drink the water and myself not too many months ago, and we actually delivered that towards the end of last year, and it's now fully implemented. Unfortunately, during that period, we did see significant interest on the social media front. And some rhetoric online. And a lot of it was led towards saying there was a tailings down for there, which is clearly an accurate information. And obviously, we're very closely regulated and managed in terms of tailings down. And all of our impact on the local area. It was really localized flooding of the lagoons and the rivers in the area that impacted the water, and it was nothing to do with tailings down. I just want that to be very clear. So at the end of the day, we opened up and commissioned that new facility. We've done some training with the public authorities, and we passed that back to them. It is their responsibility to take on managing that site and not our job, but we felt that we could be a good community member and actually participate along the way and provide some of the capital and expertise. And so we're really proud of the sustainable community investment project, and we think it really will support this project in the long term in an area that needs investments and I just wanted to say a couple of words on that. So thanks, and I'll pass back to Dennis on the Environment.

Okay. So Slide 28. Yes. I guess you've sort of mentioned some of these highlights, but I'll just go through a couple of things. One thing to mention, we use the significant environmental incident frequency rate to measure our performance against. It's very similar to the way you would measure lost time injury frequency rate or health and safety measure. The reason we do that is because we want to make the link between what our workforce actually does and environmental incidents. And also as we expand as a company, then we can use a rate to measure our performance without having to be too disruptive through the year against with our KPIs. Another thing that's probably worth mentioning is that we have a very prescriptive measure of definition of what significance actually is, and you'll see it at the bottom of the page there, that's our definition that we use. I guess anything that's reported or even notified to a government authority would make its way into the definition of significance. So we have quite a tight definition of significance. And even with that, we only had 13 of the 126 reported environmental incidents. We encourage reporting of every environmental incident, every spill, everything that's considered an environmental instance, we encourage that reporting. And of the 126, 13 were considered significant. And that helped us to achieve our target of, I think our target was 1.6 for the year, and we came in at 0.68. So we did very well when it came to them. This coming year, we're putting together -- actually, this year, we're putting together our environmental management standards as much as we've already got a set of health and safety management standards. Georgina mentioned that she's putting together the social management standards for the company, and we're adopting the environmental management standards as well. So the next slide to Water Management. Our objective really is in line with the traditional reduce, reuse, recycle way of managing water. We try and minimize the amount of water that we actually need to run our process. And as with most mining companies, we reuse most of the water that comes into that process. We're still gathering baseline data around some of our water metrics. So you'll see a lot more water metrics come in the future. And I guess one of the other things to mention is that we have -- well, we're sitting in vastly different settings across our company from extremely dry areas such as Mesquite and Castle and where we have a significant negative water balance. And then areas where we have a net positive water balance such as Los Filos. So we're implementing TSM this year. TSM encourages the adopters to look beyond the fence line with the water balances and to be a part of a catchment-wide conversation around how to address water-related risks and opportunities. So you'll see a lot more activity around that as we start to adopt TSM in the future. Next slide. Waste Rock and Tailings Management. During 2021, we put together our commitments document that you'll be able to find online, the tailings management overview to report. That was our first report we put out of that nature. It's to address some of the questions and queries from the Church of England letter that went around to all mines regarding tailings. So we've put that together. And I encourage you to have a look at that document. It will also show you exactly what our commitments are in terms of global standards. So the global tailings standard that's now been adopted by many companies. We're adopting it, but we're adopting it through TSM first. So we're adopting the same way that the Mining Association of Canada has addressed it, where giving priority to TSM and the tailings management protocol, which is very similarly aligned in many ways. Once we get to the point where we're where we have that fully implemented, then we'll be adopting the remaining parts of the Global Tailings Standard. I guess another thing to mention is that we have an independent tailings review board for our tailings down at Aurizona. And it's also in operation at Greenstone as well. For our other sites, we do use third-party inspections and do have third-party oversight as well. But those 2 at Aurizona and at Greenstone, we have an Independent Tailings Review Boards. Next slide. Energy and Greenhouse. So this year has been spent -- so I guess the main highlight for last year was the 5% reduction in greenhouse that we actually achieved from our first target that we set in 2021. This year, we're setting a short-term target. It will probably come in a lot lower than -- or maybe lower than 5% as we start to -- there's less low-hanging fruit in terms of energy efficiency, but we're still going to set a short-term target that will allow us to -- and which will have a real beneficial effect on that -- from the operations. Our focus has been towards producing midterm targets and long-term targets to support a net-zero target for a future date. So you'll be seeing a lot more, by the end of this year, we will set our long-term target with established milestones, which we think are very important and what investors really want to see like how you actually want to get to that net-zero milestone. Also by the end of the year, we're looking at having a TCFD report that will go through our climate-related risks and our financial risks as well as our climate-related physical risks, and anyway we'll see more of that before the end of the year. In 2021, we also reported for the first time on CDP. We'll be doing that again this year. There's been a lot of work done on different projects and some of those have been looking at advanced studies using solar and wind power and also for other projects. So we're just trying to get our head around exactly how we're going to achieve a net zero -- look at net zero time line. As far as on the next slide, you'll see a lot of graphs around our GHG emissions on energy consumption, Scope 1 and 2 emissions. Our company, as far as our benchmarking, we sit around the average overall, when you take all of our sites into account, we sit around the average for the energy-intense priority greenhouse intensity. So on a CO2 per tonnes emitted per ounce we sit around the average for the sector. On Biodiversity and Mine Closure. I think it's important to say that we have purchased and protected 7,000 hectares of undisturbed land in Brazil. That permit requires us to do that but it's very much a good conservation project and very, very positive. Also, we use progressive reclamation across all other sites. And during the year, we reclaimed 114 hectares of land. In the future, we're adopting TSM and as has been mentioned several times, and one of the things that actually promotes is looking to get other parties, third parties such as universities, to take part in research, which is a positive contribution to conservation across that area. We've got several cases of that. Well, we've got several partners that we've actually dealt with some of our sites. One of those is around Golden Eagle at Castle, like we're doing some research around it and as well as several other projects across our company. And with that, I'll turn it back to Christian?

Thanks, Dennis. And on the last slide really on Slide 34, our 2022 targets. When we set those at the beginning of the year, they're available on our website, available under management circular. We commit to those, and then we measure ourselves against them and as Ross joins us at our year-end review. So we watch that very carefully, and we manage it very carefully. And we're striving to be better every year, and we do look at how we can continue to move towards being a leader in this space in terms of responsible mining and sustainable development. We're a fairly young company. And after 2 significant acquisitions in the last 2 years during the middle of COVID, maybe we're playing a little bit of catch-up here, but I think a disclosure has come a long way in the last 2 years. When you look at our ESG report and even this call is an inaugural call. And so we're really proud of the people and processes we've been able to put in place in a very short period of time with very little interaction personally. We've been doing a lot of it remotely. And we've been able to communicate those objectives, we hope to you as an investor. We'll continue with our quarterly reporting and of our key metrics on our website, so please keep an eye on that. We'll continue to add data and information as we can and as the baseline data comes in over the next year. And we'll continue to give ourselves stretch targets. We're always improving. We're not perfect in every area. We know we've got some weaknesses in areas we need to do better in, and we'll continue to focus on those and we identify those as key risk areas. So we're keen to get your feedback. And as Georgina explained, we do reach out feedback every year to see what are areas of importance in the sector and to you as stakeholders in our business. And I do want to thank the team. It goes all the way down to the people on the ground to actually deliver what we do on a day-to-day basis. It's been a heck of a word over a very challenging last 2-year period where we've really created this company of a substantial size. And I do want to conclude by stealing a few words from Ross, which I know he loves to say, but a good company provides returns to its shareholders and a great company provides excellent returns for all stakeholders. And that is certainly our goal and hope you see in our vision and our performance. That's where we're aiming and that where we're heading in. I think I'll stop now and open it up to questions.

Operator, can you please remind our listeners how to ask the question?

Certainly. [Operator Instructions] I will now hand the meeting back to Rhylin Bailie, who will moderate the Q&A session.

Christian, we've got a question about the Aurizona water issue. There still seems to be a misconception that the Aurizona Village does not have access to reliable drinking water. Can you please address that?

Yes, sure. I think, like I said earlier, there has been some inaccurate information and probably some misleading information online in that we jumped on that situation to help the community very quickly, number one, on just providing access to water and access to the village very quickly but also trying to address the long-term solution. We approved -- literally within a few days, we approved the whole water system in that. I think Ross and myself actually stepped on the ground there in sort of late last year and basically drank the water from our facility, which was in the process of being finally commissioned and actually handed over to the community. And so now it is operating. It's got much greater capacity, and we actually found some things out as you do when you renovate a system or a home or whatever that things like pipes and access to sort of other regions of the village that really weren't getting good access could be improved. And I think we provided that. Even in the interim, we were able to provide access to that water. So I really do feel strongly that we've done the right thing there, and we've continued to provide that. And we've had good feedback from the community leaders and from the locals, which a lot of them actually work for us. We've had a lot of good feedback from them.

Thank you very much. A question about Los Filos. So do you feel you've got the stability there? Have you changed your long-term mine plan [ as a result of ] those changes? And sort of what things are you working on that you think will continue to give you stronger relationships going forward?

Yes. Let me start with that, and Georgina or Doug, please jump in if you have any comments to add. But as we all know and say, and it's very commonly used cliches, trust is built over time and it's easily lost. And unfortunately, during that period after we bought it, I'd say the trust level from both sides with communities and us has obviously dropped and we're in the process of recovery there. And we've had 3 quarters, I think, now sort of operations have been pretty steady state. We do believe that we're on the right path and things are improving. We've made some changes, partly to senior personnel and actually putting in place people who have more experience dealing with these specific type of situations with the culture, the language, operating mine in this region. And I think we've made positive strides in that sense. And Georgina was actually very actively involved in resolution there. I think we acknowledge that we want to provide as much benefit into communities as possible. And the challenge we do have there, there are 3 communities. They all want as much of the benefit as possible. And so we play almost a mediator-type role, and we have to operate a mine safely and efficiently over time. And so I think we've tried our best to be as flexible in providing as many opportunity, jobs and access to those opportunities as possible to each of those communities without any detriment to the other communities because we tend to have to negotiate on a one-on-one basis between the communities. And it was a really great opportunity for Ross and myself to sit in the room, literally with 3 senior leaders of each community in the same room for the first time in many, many years. And I think the common thing that came out, as Georgina said, is everyone wants this mine operating long term. It's a huge benefactor to the communities in terms of jobs, employment income, all the social benefits which we provide and the opportunities for long term other industries to grow around this. And we're also taking onboard, how can we also play a part in this community by doing things that are not just mining. Simple little examples. And again, I'll just please jump in and add but doing things around restoration of lands, which the communities have been asking for. The agave plants are a really important part of the local community, which are non-mining clearly and create another almost industry for them. We've been able to out restore some of those, that creates a partnership and some work outside of actually mining where there has been obviously some conflict over the last year. But I think it's also just the commitment here and as Ross speaks fluent Spanish, he was able to say very clearly to them, we want to be here for the long term. We think this is a great place to work and a great deposit. And also some great mining experience and knowledge in the region. And now we have to find a way to work together as partners going forward. And there has to be lines drawn at certain points, which we obviously did when we were going through negotiations where we can't disadvantage others. And we have to operate our mines safely and carefully, so we tend to have to draw the line when it encroaches upon our contractors and our underground and our open pit operations where it does compromise safety, health and other factors that are critical to mining.

A question about emissions. So on Slide 32, you talk about your GHG emissions. You talk about Scope 1 and Scope 2. When do you intend to address Scope 3 emissions?

Yes, there's parts of our business that are actually already reporting some of that. But unfortunately, that's not the case in all parts of the company. So we'll probably take the template that's used in, while Brazil has started to report some of us. We'll take that as we develop our energy management standard, we'll be addressing that. So I would say, within the next 12 months, we start to report some of that metric.

A question from Wayne Lam, our analyst at Royal Bank of Canada. You talked a bit about carbon pricing in Canada. Have you done any analysis what that impact might have on Greenstone? And do you have any detail on whether the tax will apply on full emissions or just a certain portion of emissions from that mine site?

I mean let me start with an overall comment on that. And Dennis or Doug, please jump in on any specifics you have. Certainly, we do take into account and we do see there is a real opportunity there to look at moving to, call it, greener power and energy sources, but it will take a bit of time. That area of Ontario is opening up, and we see real government support and focus on Ontario to moving towards those cleaner energy sources overtime. So we've been working and partnering with the First Nations with our initial energy and inputs. And I think over time, you'll see us moving towards something that's more grid and hydroelectric power oriented, but it will take time. And I don't have a defined time lines for that, but I certainly hope in the next sort of medium term here that we're moving towards that, which will reduce it very significantly. And as we've discussed probably on prior calls before, our primary emissions, 80%, 90% come from energy into our plant sites and as well into our generally diesel fleets. And as we see more and more announcements I even saw one this morning, everyone is moving towards more efficient plant input energy sources, but also now the trucks are becoming more efficient and moving to clean energy sources. And so I think those will be 2 key target areas. And in Ontario, particularly, I think that energy input for our plant site in the midterm. We are going to work hard with the government to move it across as most other mines actually in Ontario are to hydroelectric power.

I guess, to support that, so we have had an external report on what the cost of a decarbonized economy will have on the on Equinox generally. So not just in Canada but in the U.S. and in Brazil and in Mexico as well. And as I mentioned during the talk, we are putting together a TCFD compliant report for the end of the year. And when we do that, it will have not just what the costs are, but how we're going to mitigate those costs in the longer term so that we reduce that risk. So we're just working on the ways we're going to reduce that risk at the moment.

And I do think it's been a really eye open exercise to go through that process for a new young company. Potential impacts or tens of millions of dollars in the long term if you don't deal with these emissions and move towards that net zero in a reasonable period of time. And that's what's focusing the mine. And as Wayne as you suggest, Canada has been very clear and focused. So that one will be addressed very, very much in that midterm process. And I believe the other countries will follow suit to a certain degree, maybe not to the same extent, but I think this is a global phenom that's happening. And anyone who doesn't follow suit will be left behind, and I think companies will address it and move in that direction over the midterm here.

So it's sort of a follow-on question to that. So you mentioned that you're working with consulting companies to look at how to offset your emissions. Will you be reporting on that? And what kind of things are you considering like carbon credits, new technologies?

Yes, we will be reporting with that TCFD report. I guess the approach that we have taken is kind of a 3 pillar -- the first is to become as energy efficient as you can because obviously, you don't want to bring in renewables to just make wasted energy. So that would be -- that doesn't make any sense. So the first part is to become as efficient as we possibly can, as those energy efficiency projects become more and more expensive than it becomes -- it brings up more of your renewables and other more capital-intensive projects become economically more viable. At the very end of it is the carbon credits. So we're keeping our eye on that space. But it's a little gray to us at the moment, but we're doing our research at the moment because we realized at the very end of this, whatever amount of emissions we have, we may have to offset. So that's our last resort. And to be honest, it's the greatest area at the moment. So we're waiting till the very end before we actually make that decision.

But I do think that will be one of the key tools in our toolbox. But as Dennis so that will be one of the last ones we'll use, but there probably will be some residual that we'll have to deal with it and maybe through the credits process. But let us get through our mid- to longer-term planning, disclose some information, and then we can talk a little more specifically about maybe that residual ramp that we need to deal with.

Another question from Wayne Lam at RBC. Your flagship Los Filos asset is also amongst the highest emissions assets in the portfolio. Are there any easy wins that could be made there in terms of reducing emissions and is there a trade-off between additional capital that you're willing to commit to these initiatives versus the need for community stability?

So Los Filos, given that it has 3 open pits and 2 underground that feed into the heap leach pad, it ends up being the truck fleet is the big diesel consumer. We would like to be able to look at alternative trucks in Mexico. It is a bit of a hindrance right now because of the way the government policies prevent us from being able to adopt some of the new technologies for trucks. So it's counterintuitive. We would like to see that change and be able to conceive of being able to change to a more efficient truck fleet. But in the meantime, we are doing other things in wherever possible, especially on the leach pad to be more efficient, and this doesn't relate to GHG reductions. But obviously, things where we can be doing the water conservation we possibly can do or looking at alternate ways to generate power. So the team at site has been very, very proactive and putting forward lots of concepts or ideas that we're looking into. And we have a group here that's also been following on trying to do the initial engineering to see if there's any fruit that can be had through the various concepts at Los Filos, but it is a challenge at that site.

And 2 of the specific areas that I know the team is looking at and they mentioned here recent update with them. They're looking at solar power for certain parts of the sites and also looking at ways to manage the fleet and reduce consumption to make it more efficient and those are kind of low-hanging fruit that maybe don't solve the bigger problem, but they certainly help along the way in the early days.

Probably worth mentioning, we share experiences from all sites. So just as I sort of mentioned on the health and safety side in those investigations, what we trying to get key learnings from everywhere to make sure that we're better managing our sites. So Doug is part of an energy and greenhouse working group that we have that has all of the sites, all of the country heads as a part of that meeting. So yes, we're always on the lookout for energy efficiency projects at all of our sites that makes sense.

And one other thing I love is all of our electric power comes in from a grid that is being fed into by a nearby very large reservoir and hydroelectric facility, but the grid also has nonrenewable energy coming into it. So we can't call it renewable or green energy because it has portions of the power in the national grid of Mexico that come from nonrenewable sources as well. So it ends up looking worse than it probably really is given that if you look at the proportion that's on the overall grid for that region, it would be far greener, but we can't do that [indiscernible].

That's Perfect. Well, at the moment, we have no further questions. So if you do think of questions that you didn't have time to ask, please do e-mail us, and we'll get in touch with you as soon as we can. And now I will turn the call over to Christian Milau for closing remarks.

Yes. Thanks, Rhylin. And I appreciate everyone taking the time today just over an hour and for our inaugural call. We'll just continue to improve and focus on providing more information so you can keep an eye on this part of our business because it's an integral part and a pillar of what we're doing. And thanks for taking the time today.

Thank you very much. Operator, you can now conclude the call.

Thank you. This concludes today's presentation. Thank you for participating, and have a pleasant day.