Equinox Gold Q2 2026 Earnings Call: Complete Transcript

Equinox Gold (TSX: EQX ) reported second-quarter financial results on Thursday. The transcript from the company's second-quarter earnings call has been provided below. This content is powered APIs. For comprehensive financial data and transcripts, visit View the webcast at Summary Full Transcript OPERATOR Welcome to the Equinox Gold second quarter 2026 results conference call and corporate update.

As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. If you're participating through the webcast, you can submit a question in writing using the form in the lower section of the webcast frame.

Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Ingrid Rico, SVP Capital Markets for Equinox Gold. Please go ahead. Ingrid Rico, SVP Capital Markets Thank you and good morning, everyone.

Thank you for taking the time to join the call this morning. Before we begin, I would like to direct everyone to the forward-looking statements on slide number two. Our remarks today, including responses during the question and answer session, may include forward-looking information regarding the company's future performance. Although management believes the statements are based on reasonable assumptions, actual results may differ materially.

Please refer to today's cautionary statements and our most recent regulatory filings available on SEDAR+ and EDGAR and our website. Today's presentation also includes certain non-IFRS financial measures. Please refer to our MD&A for reconciliations and additional information. S.

dollars. Joining me on the call today are Darren Hall, Chief Executive Officer, Jason Simpson, President, Peter Hardy, Chief Financial Officer, and our operating team, David Schumer and Andrew Cormier. Today Darren will discuss the quarter and our operational progress. Jason will review our updated outlook and priorities for the second half of the year and then we'll open the call for questions.

The presentation is available on our website and a replay of today's webcast will be available in the presentation archive. With that, I'll pass the call over. Darren Hall, Chief Executive Officer Turning to Slide 3, and thanks, Ingrid. Good morning everyone and thank you for joining the call today.

With the completion of the business combination with Orla Mining, we entered the second half of 2026 as North America's new senior gold producer, with meaningfully greater production, stronger cash flow and one of the industry's strongest organic growth pipelines. The financial benefits of the combination will begin to be reflected in our third quarter results. Today's call will also highlight the continued operational progress we've made across the portfolio, particularly at Greenstone and Valentine. Our focus is now straightforward: disciplined integration, operational execution and delivering the long-term value this transformational combination has created.

Before I discuss the quarter, I'd like to thank our employees across both Equinox and Orla. Completing a transaction of this scale while continuing to operate safely is a tremendous accomplishment, and I appreciate everyone's commitment throughout the process. The combined company is built around a portfolio of high-quality, long-life assets anchored by three cornerstone Canadian mines, Greenstone, Musselwhite and Valentine, supported by one of the strongest organic growth pipelines in the industry. Importantly, this isn't simply about becoming larger.

It's about creating a stronger company with greater financial capacity, operating resilience and maintaining a disciplined capital outlook to unlock long-term value creation. That confidence is also reflected in the actions we've taken today. 09 per share. As a larger, more cash-generative business, we believe it is important that our shareholders participate directly in the value we're creating while maintaining the financial flexibility to invest in our growth pipeline and preserve a strong balance sheet.

Turning to Slide 4, the second quarter reflected continued improvement across our Canadian operations and increased confidence in our outlook for the balance of the year. Greenstone continued to perform well, with the mill effectively achieving nameplate through the second quarter. The team's focus is now on building on that performance while continuing to improve mining rates and grade delivery. At Valentine, we also saw another meaningful step forward.

The process plant continued to perform exceptionally well, consistently delivering above nameplate capacity during the quarter. At the same time, improvements in mining performance, ore control and grade reconciliation resulted in significantly better performance compared to the first quarter, and that positive trend has continued into July. 8 grams per tonne, providing further evidence that the operational improvement initiatives are delivering the expected results. These improvements reinforce our confidence that the operating initiatives are working, and we expect to see that reflected in stronger production and lower unit costs through the balance of the year.

Together with Greenstone's continued ramp-up and the addition of Musselwhite, we expect our Canadian portfolio to deliver higher production, lower unit costs and stronger cash flow through the second half of the year. The transaction also leaves us in a strong financial position. 2 billion of available liquidity. That balance sheet gives us the flexibility to execute our growth strategy while maintaining a disciplined approach to capital allocation.

Today's 50% dividend increase reflects our confidence in the cash-generating capability of the combined company and our commitment to return value to shareholders. With that, I'll pass the call over to Jason. Jason Simpson, President Thank you, Darren, and good morning everyone. Turning to slide 5, it's a pleasure to be joining you all on today's call.

Since the transaction was announced, I've spent considerable time with our operating teams reviewing each asset, the operating plans and the assumptions supporting our outlook for the balance of the year. Based on that work, I'm confident in the assumptions underpinning our updated guidance and comfortable with our ability to deliver it. Our updated guidance reflects 12 months of production from the legacy Equinox Gold operations and five months of contribution from Musselwhite and Camino Rojo, following the completion of the transaction on July 31st. For 2026, we now expect consolidated production of between 870 and 920,000 ounces.

1 million ounces of gold. The guidance reflects stronger second-half performance from Greenstone and Valentine, together with the five months of production from Musselwhite and Camino Rojo. As production increases through the second half, we expect improved fixed cost absorption and lower unit costs. Combined with the addition of Musselwhite and Camino Rojo, that supports our expectation for consolidated total cash costs of $1,600 to $1,700 per ounce and all-in sustaining costs of $1,900 to $2,000 per ounce, with stronger cash generation through the balance of the year.

From my perspective, the opportunity over the second half is really about execution. The operating plans are in place, the teams understand the priorities at each site and our focus is on safely delivering against those plans while maintaining discipline around costs and capital allocation. As Darren mentioned, at Valentine, the process plant continues to perform exceptionally well and has consistently demonstrated throughput above nameplate capacity. The opportunity now is continuing to improve mining performance and grade delivery.

The initiatives the team has implemented around selective mining, ore control, grade definition, dilution management and blending are beginning to deliver the expected results. We saw meaningful high-grade reconciliation during the second quarter compared to the first, and that positive trend, as Darren mentioned, continued into July. 8 grams per tonne gold, providing further evidence that the operational improvements are translating into stronger mill feed and positioning us well for the second half. There is still work ahead of us, but we are encouraged by the progress we have been seeing as we continue executing those initiatives.

We have been increasing our confidence in our ability to deliver full-year guidance and continue realizing the full potential at Valentine. Overall, I'm confident with the operating plans across the combined portfolio and confident in our ability to deliver a stronger second half. Turning to Slide 6, the completion of the Orla transaction fundamentally changes the scale and quality of Equinox Gold. We now have a stronger operating platform, greater financial capability and one of the industry's strongest organic growth pipelines.

Our immediate focus needs to be execution. That means delivering on our second-half operating plans, achieving our full-year production and cost guidance, and successfully integrating the combined organization while maintaining the operational momentum we have built. Looking beyond 2026, we have a portfolio of high-quality assets and a pipeline of organic growth opportunities that provides a clear path for long-term value creation. We'll continue advancing those opportunities in a disciplined and measured way, prioritizing the projects that generate the strongest returns while maintaining financial flexibility.

We have the assets, the balance sheet, and most importantly, the people to deliver on that strategy. Now it's about consistent execution and delivering on our commitments. With that, we'll pass it over to the operator and we'd be pleased to take your questions. OPERATOR Thank you.

To join the question queue, you may press star then one. On your touchtone phone you'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two.

If you're participating through the webcast, you may submit a question in writing using the form in the lower section of the webcast frame. Our first question is from Wayne Lam with TD Securities. Please go ahead. Wayne Lam, Analyst at TD Securities Yeah, thanks.

Morning, guys. 5 grams through 2028. So just wondering if you could outline a bit more detail on steps being taken here on the selectivity and the dilution front, and just wondering if that's still a reasonable target or does there need to be a bit of a reset in the reserve grade or expectations at some point as we think ahead to the coming quarters in 2027? Darren Hall, Chief Executive Officer Yeah, morning, Wayne, and thanks for the questions and thanks for TD's support.

I'll start with the last part of that question. First, from a reserve grade perspective, we're comfortable in the contained metal within the deposit and that's what we've quarter on quarter. For the last couple of quarters our challenges have been about reflecting the selectivity that was intimated in the feasibility study or the technical report that we released. And we've made significant improvements quarter on quarter to deliver a higher grade above a cutoff.

So the ability to deliver an average grade above an all-waste cutoff is solid. We're comfortable with that. And what we saw, Q2 over Q1, was a marked improvement in our high-grade reconciliation above an elevated cutoff. We improved reconciliation by close to 20% in the quarter and that was reflected in a stronger grade in the quarter.

8 gram grade. That has continued into August and it's only early, but we're approaching around a 2 gram grade in August month to date. If we talk about some of the operating initiatives that we're focused on, I'll throw it over to Dave and just... Dave, do you want to give a little bit of an outline of some of the things we've been focusing on over the last quarter or two?

Yeah, for sure. Dave Thanks, Darren. So we've been applying the software called OrePro 3D which helps us understand, as we blast the material, how much is displaced and helps us better outline the polygons. And we're also focused intently on improving the polygon mining compliance.

And that compliance was up in the high 90s this last month, which is a significant improvement over previous. We're focused on dilution across the board, operator training, training our technical people, et cetera. And I believe the results we're seeing are consistent with what I expect and expect that to continue through the rest of the year, as Darren mentioned. Darren Hall, Chief Executive Officer And we start thinking about the longer term, right.

You know, I see no need to reset expectations in that space. I mean, we've revised guidance for this year and the revised guidance reflects the performance that we have seen carried forward for the balance of the year. And I don't think it fully represents the improvements that we have seen and will see. We've kind of arguably set the bar arguably a little conservatively as we want to kind of increase the level of confidence in our ability to deliver into expectations for that asset.

And the production profile in the back end of the year is, you know, 80 to 90,000 ounces. So when you annualize that, you're still towards the midpoint of guidance of what would have been a full year guidance. So as we roll into 2027, we're going to continue to see those benefits improve. The realized grade increase will maintain throughput and importantly the board just yesterday approved full funds for Valentine for the phase two, which we disclosed in the release as well.

And as we implement or build that expansion that will take a lot of the issues out of the selectivity issues that we see in the short term until we have that 5 million tonne plant in place. So I think that what we're seeing is typical and normal sort of ramp-up-related issues. We were overly aggressive in terms of our selectivity for the start of the year. We're working through those issues, we're improving, we'll continue to.

And we're very comfortable and confident with the estimates we've put out there. Jason, anything you'd layer on that, buddy? Jason Simpson, President Yeah, I think. And David, Andrew and I will be down in Newfoundland very shortly to oversee and confirm our confidence in the work that's already been initiated in terms of grade control and selectivity to preferentially feed that high grade.

But in my experience with these ramp-ups, this kind of stabilization of the operation, everything from grade control to, you know, operating efficiencies of the equipment and so on, is normal course in ramping up any project. And that's represented here in Valentine. Darren Hall, Chief Executive Officer And both in the production and the costs, you know, we've basically taken a run rate that we have seen for the year, projected it forward.

So the gains that we've seen, the efficiencies we've seen in the reduction in spend, and we have not been factored into — and, you know, we'll be, you know, transparent here — is that the point estimate of our internal estimates going forward is lower than our low end of guidance for costs. Right. So we're really trying to set the asset up for delivering to expectations and not disappoint. Wayne, did we cover your question?

Is there anything else outstanding you had? Wayne Lam, Analyst at TD Securities Yeah, thanks. No, that's great. That's a lot of detail.

Maybe moving to Greenstone. You know, nice to see the improvement in the process grades quarter over quarter alongside the tonnage getting towards design. Just wondering if you had any commentary on the lag in the recoveries and then would you be able to give us some color on the timing of the installation of the trommel and expected impact that might have operationally on throughput or recoveries? Darren Hall, Chief Executive Officer Yeah, for sure.

And I'll start with, I'll start at the end of the question because I can remember that part, right, and then go backwards. The trommel is still in play here for the end of the year and we will see the benefit of that before the end of the year. And what that will do, it'll take out a lot of the tramp that we're feeding into the plant which creates unnecessary downtime and also removes and reduces efficiencies within the plant. And that was always envisaged to get us to nameplate.

But, you know, pleasingly, you know, where we see today, I mean for the average throughput for Q2, we were just a smidgen under nameplate capacity. 8 thousand tonnes for the quarter. Now for the third quarter, so through actually yesterday morning, so through the 4th of August or 5th of August, we were just over nameplate at just over 28,000 tonnes a day. So what we are seeing is all of the activities that Brian and the team have been leading over the last year at Greenstone are truly paying dividends.

So we're comfortable that we can deliver into nameplate or exceeding the nameplate without the trommel.