Earnings Call Transcript - EQX Q3 2020

Operator, Operator

Thank you for your patience. This is the conference operator. Welcome to the Equinox Gold Third Quarter 2020 Results Conference Call and Webcast. I would now like to turn the conference over to Rhylin Bailie, Vice President, Investor Relations for Equinox Gold. Please proceed.

Rhylin Bailie, Vice President, Investor Relations

Thank you very much, and thank you very much, everybody, for joining us on the call this morning. We will, of course, be making a number of forward-looking statements today. So please do take the time to visit our continuous disclosure documents on our website, on SEDAR and on EDGAR. I will now turn the call over to our CEO, Christian Milau, for opening remarks.

Christian Milau, CEO

Thanks, Rhylin, and welcome, everyone, today to our third quarter results webcast. It’s been a heck of a day Friday and today. And certainly, the world is not a dull place, so stay tuned. We had a very solid quarter overall in Q3 and pleased to present that to you today starting on Slide 3. Our health and safety record, again, for the quarter was very good and strong. We had two lost-time injuries in over 3 million hours worked, so good performance again by the team. In terms of COVID impacts, there were no COVID-related restrictions during the quarter, so all the mines operated. Q2 is when we had our disruptions. Los Filos was ramping up during the first part of Q3. We've really put in place strong protocols. We've been proactively testing in each of our sites, even instituting labs where needed, or accessing private labs, so we can ensure that we're proactively testing our workforce. We've seen the case load come down very significantly. Both Ross, Doug, and I had a chance to visit most of the operating mines in the past few weeks, and we were very pleased with the protocols we observed. The teams have really stepped up and operated in a very safe and positive manner during this difficult environment. In terms of operating results, we sold 128,000 ounces and produced just under 125,000 ounces—a very respectable quarter considering we didn't have any production from Los Filos in September. As alluded to in the press release, all the mines were operating in line with guidance, except for Los Filos, which was temporarily suspended due to a community blockade that we announced in early September. I'll discuss that a bit more and give more color on that later. Other things that happened corporately include getting Board approval and announcing official construction at Santa Luz. This continues the trend we've had of internal growth and measured external growth. We've built one mine per year over the last few years. Aurizona came into production in 2019, Castle this year in 2020, and Santa Luz should be constructed close to the end of 2021. We're really pleased to be able to continue to deliver on that clear strategy we set a few years back. We also poured first gold at Castle Mountain—kudos to the team, Tom, Doug, and the guys in California, who did a good job in a challenging environment with COVID really kicking in during the height of construction. They were able to deliver that mine basically on time, so really well done. We're also really pleased to see Mesquite mineral reserves and resources increase very nicely with the recent results. Kudos to the team, Scott, and the guys in California, who were able to deliver that, and we'll talk about that a little later. Congratulations to Doug Reddy, who was promoted to COO on September 1. He'll be discussing Santa Luz a bit later in this call after Peter Hardie talks about our financial results. Our Board is continuing to evolve; Sally Eyre joined the Board just a week ago at the end of October. She brings some technical experience and a wealth of knowledge in the Americas, so we're really pleased to have her on board. I'll now turn it over to Peter Hardie to cover the next couple of slides on financials.

Peter Hardie, CFO

Thanks, Christian. Moving to Slide 4, we'll highlight our Q3 financial results. Despite the issues at Los Filos, Equinox had a strong financial quarter, exceeding its Q2 results on virtually every financial metric, including revenue, earnings from mine operations, profitability, and cash flow. Revenue for the quarter was $244 million from the sale of 128,000 ounces of gold, an increase of almost $30 million over Q2 revenues, with the key driver for the company's financial performance being the gold price. We had an average realized price per ounce in Q3 of about $1,900, which is an increase of almost $190 over Q2's $1,712 per ounce. Earnings from mine operations for the quarter were $98 million, EBITDA was $71 million, and on an adjusted basis, it was $99 million. We improved our profitability with income of $12 million and $39 million on an adjusted basis. This translates to earnings per share of $0.05 and $0.16 on an adjusted basis. Cash flow from operations before changes in working capital was $90 million—essentially $1 million a day—compared to $61 million in Q2. This shows strong performance for the quarter. These strong financial operating results for Q3 further strengthened our balance sheet. As of September 30, we had $311 million in cash, even after paying down $200 million on the revolving credit facility, leaving the company with over $500 million in liquidity. Net debt was $232 million at the end of the quarter, including convertible notes that are well in-the-money, with an average exercise price of $6.50 per share. If you assume those notes are converted to shares, as of September 30, we actually have a net cash position of $22 million. Our investments are also strengthening our balance sheet. We equity account for our investment in Solaris Resources. It has a book value in our financial statements of $9 million. On Friday, the market value of the 26 million shares we hold in Solaris was $109 million or CAD 142 million. Another item to contribute to our liquidity going forward are warrants that expire in October 2021. They have a $15 strike price and are exercisable for 16 million shares, which could bring up to another $180 million under the balance sheet. Overall, we had a good quarter, and we maintain a very strong balance sheet. Now let's start with operational results by mine on the next slide. Generally speaking, with the obvious exception of Los Filos, we're very much on track at our mines. Aurizona was the star of the quarter, producing and selling 33,000 ounces of gold at low cash cost and all-in-sustaining costs that are well in plan. The low cash cost for the quarter is due to higher volumes, better grade, and favorable foreign exchange. The increase in all-in-sustaining costs was expected with a planned tails lift and planned stripping. I'll note it's actually still lower than what our guidance is for the year. The other Brazilian operations are stable and performing right on plan. Mesquite itself produced and sold 31,000 ounces of gold, which is lower than the prior quarter, but planned as we started stacking non-oxide material, which has a longer leach cycle, and Christian will speak to that in a moment. The cash costs and all-in-sustaining costs are on track. The increase over Q2 is due to water well improvements for pumping that will aid in increasing irrigation volumes for the leach pad. In total, we've produced 341,000 ounces of gold, sold 337,000 ounces, resulting in $590 million in revenues. Our year-to-date total cash cost across the company is $854, and our all-in-sustaining cost is $993 per ounce. So overall, we're performing right on target for what we hoped in the absence of Los Filos. I'll turn the presentation back over to Christian to continue the operational results by mine.

Christian Milau, CEO

Thanks, Peter. I want to walk everyone through each of the mines briefly here and give you a glimpse of what we've seen and what we plan to see in the near term. Starting with Los Filos on Slide 6, we were suspended in Q2 due to government restrictions and COVID. It was ramping up in July and August, but we obviously went into suspension on September 3. So it has been down for almost just over six months this year. I want to give you context on the situation at Los Filos. As announced on September 4, mining activities have been suspended since the 3rd due to a blockade by members of the Carrizalillo community, one of the three primary communities from which we draw our workforce. We had a land access agreement and social collaboration agreement in place, both signed last year and running until 2025. However, the community is now asking for increased benefits under the social collaboration agreement and more control over employment and contracts. We continue to have regular and respectful meetings with the community to understand and discuss their grievances and concerns. Unfortunately, to date, the blockade remains in place. We continue to seek a resolution to the blockade so that Los Filos can resume normal operations and continue to provide substantial benefits to all stakeholders. We are seeking a long-term solution, not a quick fix. This situation does not affect our ability to operate effectively and meet all health, safety, and governance obligations. As background, Los Filos is a significant employer and economic contributor in the region, employing almost 2,000 people and utilizing more than 100 local businesses to support mine activities. Throughout its production life, Los Filos has provided significant benefits to Carrizalillo and neighboring communities through social collaboration agreements covering education, medications, health care, cultural programs, and infrastructure enhancements. While we believe we can accommodate some or many of the community's requests, others could affect health, safety, and proper contracting processes or impact good corporate governance practices. In particular, we must be able to screen our potential employees for standard health and safety checks, conduct background checks, and ensure adequate training before hiring individuals to work underground or operate heavy equipment. These are norms we expect to have throughout all our locations, and we will apply the same standards here. We also use local businesses as much as possible and support local contractors and equipment suppliers. However, we cannot bypass legal requirements, as there are new trade agreements between the U.S., Mexico, and Canada that prohibit certain types of sole sourcing and monopoly services and pricing mechanisms. We must effectively operate, control our processes, and comply with corporate governance policies. Any amendments to the existing social agreement must result in a fair, long-term solution for all community partners. We're choosing to be patient and resolve this correctly, rather than rushing to restart operations and ending up with issues again down the line. In short, we believe all stakeholders desire a return to operations, and we remain optimistic and open to constructive dialogue. Our preference is to achieve a resolution through face-to-face discussions with the community, as we believe this is the best approach to building a long-term positive relationship with our partners. We've been keeping important stakeholders like the governor, union leaders, and other communities informed as well. We appreciate everyone's patience as we work through this and seek a long-term resolution with the community. Despite this, Los Filos has produced just under 50,000 ounces this year, and we have withdrawn guidance as Peter mentioned earlier. The one aspect that will be impacted moving forward is we were set to work on accessing higher grades in the Guadalupe open pit and Bermejal underground. Those efforts were planned for the bulk of this year but will likely be pushed into mid-2021 or later. Now, turning to Aurizona in Brazil. As Peter mentioned, it was a strong quarter. We're really pleased to see the mill averaging almost 9,000 tonnes per day, which is almost 10% above nameplate. During this dry season, we're working on stockpiling ore to prepare for the rainy season, which comes in the early new year. We're aiming for about 600,000 to 700,000 tonnes in stockpile and are about two-thirds of the way there. Exploration is ongoing, with a focus on both the underground and extensions along the strike. We also started the pre-feasibility study, which we hope to issue publicly next year. Mesquite in California is also performing well and has exceeded our expectations since the acquisition in late 2018. As Peter mentioned, it's transitioned to non-oxide material, leading to a slightly lower quarter in Q3, but we expect an increase in Q4. We're pleased with the almost 30% increase in mineral reserves and the almost 100% increase in the M&I resource. Thanks to the team, Scott, and the crew in California for their focus on this effort. We allocated funds for further drilling and expect to see continued results as we move forward. When we purchased this mine in 2018, it had about a 2.5, maybe 3-year mine life. We're nearly at that point now and still have visibility to another 3-plus years of mine life. We'll continue investing in this site and allocate exploration dollars, while we also plan to invest in a new fleet next year. We are really building confidence in this asset. Turning back to Brazil, Fazenda had a strong Q3 as noted by Peter. It will receive more attention in terms of exploration. There’s a district belt between Fazenda and Santa Luz that we plan to explore over the next few years. RDM had another strong quarter as well, with improved recoveries. We have sufficient water to operate continuously throughout the year. When Ross, Doug, and I were down there, it was raining, so we were pleased to see that our water reserves were filling up. A key milestone we achieved in the quarter was receiving the permit for the pit pushback. This was significant as it will allow us to access higher grade ores in the next 18 to 24 months. There will be elevated stripping over that same time frame as we work to move waste and access the ore. Pilar also had a good quarter with higher mining volumes and overall good mine performance. Turning to Slide 8 regarding guidance, as Pete mentioned, the guidance for Los Filos has been withdrawn, but we expect to meet all other targets this year. Please note that all Leagold assets are included here only from March 10 onwards since the acquisition closed in that time frame; thus, it’s really 3 quarters of performance for those assets. Moving to Slide 9 for growth and development projects, we have a quick update. Castle Mountain poured gold on October 15. Congratulations to the team. We expect to produce 5,000 to 10,000 ounces this year in 2020, and that will scale to about 40,000 ounces per year on average from 2021 onwards. The pre-feasibility study for Phase 2 is expected in Q1 next year. We're working on optimizations that will demonstrate a 200,000-plus ounces per year production for many years to come. We're excited about the Castle Mountain project in the long term. The expansion at Los Filos in Mexico has the potential to increase average production to about 350,000 ounces per year. As mentioned, we're opening up a new open pit and underground mine there. Those plans are slightly delayed due to the current suspension but could be operational by mid-next year. The new study will be released as soon as it’s completed, indicating an 8,000 tonne per day CIL plant that could process higher-grade ores. Currently, due to the suspension, there’s no further investment as we speak, but as we reach a resolution, we intend to look at reinvesting in this project. Now I’ll turn it over to Doug to provide the Santa Luz update.

Douglas Reddy, COO

Thank you, Christian. Turning to Slide 11, Santa Luz has a construction period of 14 months, with first gold scheduled for Q1 of 2022. The project will involve mining 1.3 million ounces in reserves at just over 1.3 grams per tonne. We’ll be mining by open pit using contractor mining. The strip ratio is 4.7:1, and we’ll be mining at 7,400 tonnes a day, which equates to about 15.5 million tonnes per year for both ore and waste. Based on a gold price of $1,500 per ounce, the average gold production for the first five years will be just over 110,000 ounces annually and an average total of 95,000 ounces per year over the life of the mine. Gold recovery is expected to be 84%, with an initial mine life of 9.5 years and an initial CapEx of $103 million. Cash cost is projected at $776 per ounce and an all-in-sustaining cost over the life of mine at $877 per ounce. The after-tax NPV at a 5% discount rate is $305 million, increasing to $475 million at a gold price of $1,800 per ounce. The IRR after tax is 58% or 85% at $1,800 per ounce, with a payback period of 1.6 years. Moving to Slide 12, as this is a brownfield project, it has a low initial capital requirement, with most of the infrastructure already in place, including grid power via a 138kv power line. Additionally, there are tailings and water storage facilities already established at the site, along with a CIL plant. The required alterations and the total CapEx are projected at $37.5 million to convert the plant from CIL to resin-in-leach. We'll be conducting a tailings and water storage facility raise this year totaling $7.5 million and a pre-stripping cost of $20 million, bringing the initial capital cost to $103 million. The water storage facilities have already 3 million cubic meters available for when the project start-up commences. The operating cost for mining is $2.41 per tonne mined, with processing costs at $13.43 per tonne processed. Additionally, G&A is $2.75 per tonne processed. The plants will consist of a two-stage crushing process, incorporating both jaw and cone crushing; a two-stage grinding process, including a SAG mill in conjunction with a ball mill; a gravity circuit; and importantly, the ore feed will be blended to maintain 0.6% total organic carbon from the dacitic and carbonaceous ores to achieve the 84% recovery rate. If we refer to Page 13, regarding project sensitivities, it is most sensitive to gold price, operating costs, foreign exchange, and capital costs. The base case has been presented at $1,500 per ounce with an upper limit of $1,800 per ounce for the sensitivities here. As shown, the NPV shifts from $305 million to $475 million, and the IRR increases from 58% to 85% based solely on changes in the gold price. Turning to Page 14, there are additional opportunities at Santa Luz. We can look at developing the C1 deposit, which is the main deposit being mined, and going down dip, where a preliminary economic assessment has already been prepared for the underground deposit. As Christian mentioned, we're conducting a large exploration program in the Santa Luz to Fazenda belt, which is about 70 kilometers of greenstone belt between the two mines. Scott Heffernan and Carlos Paranhos are embarking on a multi-year program that will target several promising areas in that greenstone belt, which could extend life at Santa Luz and add to resources and reserves at Fazenda. This program is set to begin this year. Regarding the underground PEA, it was updated based on a $1,500 gold price, projecting total potential production of over 0.5 million ounces, with a mining rate of 2,500 tonnes a day and a gold grade of 2.6 grams per tonne. The initial life of the PEA is 9.5 years, with a pre-production capital of $74 million and an estimated net cumulative cash flow before tax of $289 million, with an after-tax NPV of $178 million, and an IRR for the project of 39%. There's additional progress to be made on advancing this opportunity. Lastly, looking at Page 15, I am pleased to announce that our Board has approved construction, with a budget of $103 million in CapEx. We plan to invest $10 million in 2020. We've already initiated early works, including clearing and leveling the plant site. Detailed engineering of the processing plant is 99% complete. We are also advancing engineering efforts for the tailings and water storage facility expansions, which are nearing completion. Most major equipment is already on-site, and long-lead-time equipment has been ordered. Our operational team has mobilized on-site, and contractors will be mobilizing in November. The first gold pour is targeted for Q1 of 2022. As illustrated in the chart below, we have a 9.5-year initial mine life, and we look forward to extending that through additional exploration opportunities, including the underground potential.

Christian Milau, CEO

Thanks, Doug. In conclusion on Slide 16, I want to highlight our near-term catalysts. A lot has been achieved this year, and we're looking forward to the gold pour at Castle and getting construction started at Santa Luz. This is a low CapEx intensity project—really fitting within our sweet spot—complete over the next 15 months. We also aim to commence the Aurizona underground pre-feasibility study, which we are excited about regarding its potential. The upcoming catalysts we want to focus on include getting Los Filos restarted after we resolve its current issues, though we will ensure to take our time and do this correctly. The expansion study for Los Filos will follow in the new year, along with the Castle Mountain Phase 2 feasibility study, expected early next year as well. Exploring at Mesquite and Aurizona is building momentum, and we intend to put focus on the shorter life mines to extend mine lives, as we think many of our operational mines are quite prospective and require attention starting in 2021. Corporately, we've accomplished much this year—the Leagold merger and integration has proceeded well, despite the COVID situation. We're included in several indices, have commenced our ESG reporting more publicly, and have begun harmonizing and combining reporting processes, which you will see more of on our website as we move forward. We remain focused on accretive M&A on a disciplined basis. Although we are concentrating on internal growth, we’re keeping our eyes open for attractive opportunities in the market, whether they be producing mines or development projects that align with our pipeline as we continue delivering on putting mines into operation annually. Assets of interest would enhance our portfolio quality and diversify our holdings. Overall, I'd say we had a strong operational performance in Q3, maintaining a solid balance sheet as Peter outlined earlier. We'll continue to focus on our disciplined growth to achieve our strategy of becoming the premier Americas gold producer. Thank you for your time, and I now open the floor to questions.

Rhylin Bailie, Vice President, Investor Relations

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

Operator, Operator

Thank you for your time. I now open the floor to questions.

Rhylin Bailie, Vice President, Investor Relations

Thank you. We do have a few questions from people online. One thing I've been getting a lot of over the last couple of months is inquiries about why we haven't been providing more regular updates about Los Filos and in response to some of the things that have been said in the press.

Christian Milau, CEO

Thanks, Rhylin. Certainly, we'll update the market when there are any material changes, both positive and negative. But we firmly believe that we do not want to negotiate in the press or media. That is not part of our strategy. We much prefer respectful dialogue, face-to-face discussions with the community to work through the challenges at Los Filos, and we believe this has been the most effective method thus far. We remain optimistic and continue to work on those local discussions, and we won't be negotiating through the press. You can expect updates as material changes occur.

Rhylin Bailie, Vice President, Investor Relations

We’ve also received many questions regarding allegations of water contamination at Los Filos. Can you address that?

Christian Milau, CEO

Sure. Historically, there's a water source that was relocated for the local community, about 3 kilometers away from the mine site, approximately 150 meters above our current elevation. Goldcorp initially implemented the system to access that water, which may need some updating—something we have agreed to undertake. This was outlined in the social collaboration agreement last year to upgrade the system. Once we're able to resume operations, we'll continue with that process. The local community has grown substantially, and we plan to implement upgrades that will enable them to access water for years ahead. There have been a few allegations in the press regarding arsenic in the water. It's important to clarify that we do not use arsenic in any of our processes, though it might occur naturally in trace amounts in the local rock and area. This is why there's probably some naturally occurring arsenic in the water. However, it is safe to drink. We are satisfied with the standards we've established, and with regard to our operating permits and health and safety requirements, we regularly report to the regulators. We monitor it closely to ensure our communities have access to clean and healthy water. We remain committed to working with the community on upgrading that system, but the current water sources are safe.

Rhylin Bailie, Vice President, Investor Relations

Thank you. Operator, we’ll take some questions from the phone lines, please.

Operator, Operator

Our next question comes from Dalton Baretto of Canaccord.

Dalton Baretto, Analyst

I want to start with the Los Filos blockade as well. I appreciate the commentary you provided in the scripted remarks, but there are many things that remain unclear to me. My first question is, what triggered this?

Christian Milau, CEO

Here's the challenge—we can never know for sure. Certainly, with the change in ownership and alterations in senior leadership down there, communication channels might have been disrupted. I can't speak for the community or their desires. They're clearly looking for enhanced social collaboration benefits, and perhaps this is an opportunity based on the change in surrounding circumstances with COVID and management that triggered it. We want to ensure we maintain an open dialogue to reach a long-term resolution, with team members both from Vancouver and our senior leadership down there actively engaged in discussions.

Dalton Baretto, Analyst

You mentioned some of their requests, which sound incremental to the current contract. But it appears their stance suggests you’re not fully meeting the terms... Is this merely posturing?

Christian Milau, CEO

Yes, there are standard grievance mechanisms incorporated in all contracts around the world, and this is no different. We have established a regular review process in place. It is disappointing to see this escalate and request additional benefits outside that framework. However, we can work collaboratively with them to ensure community support, education, and extra benefits where possible.

Dalton Baretto, Analyst

Lastly, given that you are still meeting with them regularly, what needs to happen for progress? Are they firmly entrenched, or is there some flexibility on both sides?

Christian Milau, CEO

There is quite a bit of give on our side, and we’ve been engaged in frequent discussions—I'd estimate almost daily interactions lately. However, there are certain areas where we can't compromise, especially regarding health and safety and governance policies. We must ensure all employees go through proper screening before they're hired, especially for positions involved in heavy machinery and underground work. We also need to maintain control over operations and be cautious around contract sourcing- some requests might conflict with this. There are other social benefits where we can afford more flexibility and support for educational efforts.

Arun Lamba, Analyst

Congratulations on the quarter. Regarding Los Filos, I have two quick questions. You discussed M&A potential; how do you view the portfolio? Would you consider divesting some of the smaller assets since they may require the same amount of time as the larger ones?

Christian Milau, CEO

Thanks, Arun. In this environment, we have the luxury of all assets performing nicely, including the smaller operations, so we're pleased with their cash flow contributions. Over time, as the portfolio diversifies and grows, we might consider divesting an asset or two. But for now, we’re happy with the performance of all our assets.

Arun Lamba, Analyst

You mentioned Solaris—a notable increase in value. Is the plan still to hold that long-term? Given that your balance sheet is largely net debt-free, would you consider a divestment?

Christian Milau, CEO

We’re certainly happy shareholders right now. Richard and Dan are doing an admirable job there. We were delighted when they took over recently, as we believe Solaris has considerable upside potential. We have no plans to divest anytime soon as we've committed our shares to escrow for a couple of years, so we remain highly supportive.

Kerry Smith, Analyst

I have a question regarding the underground at Santa Luz. Did you only update the gold price in that PEA without changing the costs?

Douglas Reddy, COO

Sure, that’s correct. We updated the project economics, including both gold price and costs, but there’s more work to be done. We will require more drilling to improve our findings and thus need to improve the entire study.

Kerry Smith, Analyst

On that underground PEA, the 511,000 ounces of recoverable gold—what percentage of that is inferred? Is it all inferred, or is there any indicated?

Douglas Reddy, COO

I’ll need to double-check, but I will get back to you on that.

Kerry Smith, Analyst

What’s the plan going forward? Are you planning to complete an infill drill program to convert some of the inferred and then undertake an economic study?

Douglas Reddy, COO

Yes, we will conduct an infill drilling program when it won’t interfere with construction. The plan will be reviewed by Scott Heffernan and his team to develop a logical approach and follow-on drilling that can move us towards a PFS. Right now, we’re waiting while construction progresses to minimize interference.

Kerry Smith, Analyst

Considering the timing, will it take another 18 months of drilling and engineering work before making a decision to start the decline?

Douglas Reddy, COO

That timeline seems fair, but we also have many other open-pit targets in the vicinity that we will look into as soon as possible. While we'd love to synchronize the underground with the open pit, there are convenient nearby open-pit opportunities to pursue as well.

Peter Hardie, CFO

Yes, it’s Peter speaking. The quarterly holding costs for Los Filos during this blockade are about $750,000 a week.

Kerry Smith, Analyst

Is that solely for asset protection? I assume you’re also still covering employee salaries?

Christian Milau, CEO

We've suspended payroll for certain individuals who cannot access the site or work. Over time, we've gradually reduced that payment, and we’ll continue to minimize it further if necessary. Therefore, there is flexibility in the number that Peter provided.

Kerry Smith, Analyst

Of that $750,000 per week, how much correlates to payroll?

Peter Hardie, CFO

I don’t have that figure offhand. I’ll get back to you on that. I would estimate around 50-60%.

Kerry Smith, Analyst

How did you decide which workers are not on payroll? Is it half of the personnel who are no longer receiving payment?

Christian Milau, CEO

Most operations personnel cannot access the site, which means they're currently not working or receiving pay. However, select management staff and security personnel critical for site safety remain on payroll. As for the timing of the PFS for underground Aurizona, we’re wrapping up our drill programs right now. While we’re targeting Q2 for release, I’m not entirely certain on that. It depends on how productive the current drill program results are this quarter. By the way, to address your question regarding the percentage of inferred resources at Santa Luz, the indicated underground is 484,000 ounces and inferred is 461,000 ounces. A significant portion is likely inferred, but I would need to validate it back.

Rhylin Bailie, Vice President, Investor Relations

We’re nearing the end of time for this call. I’d like to pass it back to Christian for closing remarks.

Christian Milau, CEO

Thanks, Rhylin, and thanks everyone for the time. A lot of good questions today point to an exciting future ahead. Keep an eye out; we have multiple catalysts on the horizon, and several projects are set to launch. We aim to reach a resolution on Los Filos soon, so follow this space, and we look forward to speaking with you at year-end. Thank you.

Operator, Operator

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