Equinox Gold Reports Q4 and Fiscal 2023 Financial and Operating Results, Provides 2024 Production Guidance of 660,000 to 750,000 Ounces of Gold
Equinox Gold Reports Q4 and Fiscal 2023
Financial and Operating Results, Provides
2024 Production Guidance of 660,000 to
750,000 Ounces of Gold
All financial figures are in US dollars, unless otherwise indicated.
Vancouver, British Columbia--(Newsfile Corp. - February 21, 2024) - Equinox Gold Corp. (TSX: EQX)
(NYSE American: EQX) ("Equinox Gold" or the "Company") has released its audited consolidated
financial and operating results and related management's discussion and analysis for the fourth quarter
and fiscal year ended December 31, 2023. The Company will host a conference call and live webcast to
discuss the results at 7:30am PT (10:30am ET) on Thursday, February 22, 2024. Dial-in and login
details are provided later in this news release.
Greg Smith, President and CEO of Equinox Gold, commented: “Equinox Gold finished 2023 with its
strongest quarter of production at the lowest cash costs for the year, bringing full-year production to
564,458 ounces of gold at all-in sustaining costs of $1,622 per ounce. Greenstone was a significant
focus during 2023. After 2.5 years, construction was substantially complete at year end, which is a huge
accomplishment for the team. The focus at Greenstone has shifted now to hot commissioning and
operations ramp up with first gold on schedule for the first half of 2024.
"Looking forward, we expect to produce between 660,000 to 750,000 ounces of gold in 2024 with cash
costs of $1,340 to $1,445 per ounce and all-in sustaining costs of $1,630 to $1,740 per ounce. We
started 2024 with $360 million in total liquidity which, along with cash flow from our operating mines and
marketable investments currently worth about $100 million, leaves us well funded to achieve our 2024
objectives and advance Greenstone to commercial production."
HIGHLIGHTS FOR THE THREE MONTHS ENDED DECEMBER 31, 2023
Operational
Produced 154,960 ounces of gold
Sold 149,861 ounces of gold at an average realized gold price of $1,983 per oz
Total cash costs of $1,330 per oz and all-in sustaining costs ("AISC") of $1,657 per oz
(1)
Three lost-time injuries and a total recordable injury frequency rate (TRIFR)
(2)
of 1.35 for the
Quarter
Significant environmental incident frequency rate (SEIFR)
(2)
of 0.00 for the Quarter
Earnings
Income from mine operations of $38.6 million
Net income of $3.9 million or $0.01 per share (basic)
Adjusted net income of $2.4 million or $0.01 per share
(1)
Financial
Cash flow from operations before changes in non-cash working capital of $168.2 million, which
includes $75.6 million in proceeds from gold prepay arrangements ($125.9 million after changes in
non-cash working capital)
Adjusted EBITDA of $95.3 million
(1)
Sustaining expenditures of $44.5 million and non-sustaining expenditures of $99.2 million
Received $75.0 million on closing of the gold purchase and sale arrangement ("Sandbox
Arrangement")
Issued 5.0 million common shares under the at-the-market equity program ("ATM Program") at an
average share price of $5.01 per common share for total gross proceeds of $24.9 million
In November and December, entered into gold collar contracts with an average put strike price of
$1,980 per ounce and an average call strike price of $2,198 per ounce, for 11,332 ounces per
month beginning January 2024 through to June 2024
In October, repaid $166.0 million of the Revolving Facility with proceeds from the 2023 Convertible
Notes
Construction, Development and Exploration
Advanced Greenstone construction with the following achieved:
Completed more than 5.9 million hours project-to-date with one lost-time injury; 12-month
rolling average TRIFR of 2.39
Tailings facility permitted and ready for use
Hot commissioning of crushing circuit and ore storage dome complete
Wet commissioning underway in the ball mills, high-pressure grinding rolls, thickener and
leach tanks
Approximately 1 million tonnes of ore stockpiled for startup
Spent $74 million (Equinox Gold's 60% share) during the Quarter
On track to pour gold in H1 2024
RECENT DEVELOPMENTS
Provided 2024 production and cost guidance of 660,000 to 750,000 ounces of gold at cash costs
of $1,340 to $1,445 per oz and AISC of $1,630 to $1,740 per oz
(1)
Provided 2024 sustaining and non-sustaining expenditure guidance of $424 million
$212 million of sustaining expenditures, of which $196 million is sustaining capital
expenditures
(1)
$213 million of non-sustaining expenditures, of which $205 million is non-sustaining capital
expenditures
Non-sustaining capital expenditures includes $95 million to advance Greenstone through to
commercial production
Since January 1, 2024, the Company has issued 5.0 million common shares under the ATM
Program at an average share price of $4.56 per common share for total gross proceeds of $22.9
million
FULL-YEAR 2023 HIGHLIGHTS
Operational
Achieved 2023 production guidance, with 564,458 ounces of gold produced
Sold 559,481 ounces of gold at an average realized gold price of $1,941 per oz
Beat 2023 cash costs guidance, with cash costs of $1,350 per oz
(1)
Achieved 2023 AISC guidance, with AISC of $1,612 per oz
(1)
Seven lost-time injuries, one fatality; four sites had no lost-time injuries
Achieved a total recordable injury frequency rate
(2)
of 1.47, a 31% improvement compared to 2022
Earnings
Income from mine operations of $109.0 million
Net income of $28.9 million or $0.09 per share
Adjusted net income of $21.7 million
(1)
or $0.07 per share
(1)
Financial
Cash flow from operations before changes in non-cash working capital of $527.5 million, which
includes $225.0 million in proceeds from gold prepay arrangements ($358.5 million after changes
in non-cash working capital)
Adjusted EBITDA of $304.4 million
(1)
Sustaining expenditures of $129.1 million and non-sustaining expenditures of $404.1 million
Cash and cash equivalents (unrestricted) of $192.0 million at December 31, 2023
Net debt
(1)
of $733.0 million at December 31, 2023
Corporate
Strengthened balance sheet
Issued $172.5 million of unsecured senior convertible senior notes with a conversion price of
$6.30 (the "2023 Convertible Notes") and used the net proceeds to repay $166.0 million of
the revolving credit facility (the "Revolving Facility")
Completed $225.0 million in gold prepay and gold purchase and sale arrangements
Sold a portion of the Company's shares in i-80 Gold Corp. (TSX: IAU) for initial proceeds of
C$32.0 million
Issued 9.3 million common shares under the ATM Program at an average share price of
$4.48 per common share for total gross proceeds of $41.8 million
Gold collar contracts in place at December 31, 2023 had a weighted average put strike price of
$1,954 per ounce and an average call strike price of $2,166 per ounce, for delivery of an average
of 18,687 ounces per month from January to June 2024, representing approximately 30% of
estimated production during that time period
Construction, Development and Exploration
Advanced Greenstone on schedule with installation activities effectively completed at December
31, 2023 and commissioning underway to pour first gold in H1 2024
Advanced permitting and front-end engineering for the Castle Mountain Phase 2 expansion
Advanced technical studies for the Aurizona underground expansion and received a permit to
commence underground portal development in the Piaba deposit. Received a permit to develop
the Tatajuba open pit deposit
Successfully replaced reserves through 57,969 metres of reserve replacement drilling and
strategic mine planning updates
Completed 44,260 metres of step-out drilling across the portfolio with a focus on mine life
extension, and completed 16,321 metres of regional drilling to delineate new deposits
Responsible Mining
Achieved a SEIFR
(1)
of 0.29, a 54% improvement compared to 2022
Published the Company's annual ESG (Environment, Social and Governance) Report, updated the
Tailings Management Report, and submitted greenhouse gas (GHG) emissions data to CDP
(formerly the Carbon Disclosure Project)
Published the Company's first Water Stewardship Report and its first Climate Action Report,
outlining a strategy to achieve a 25% reduction in GHG emissions by 2030 compared to "business
as usual" emissions
______________________
(1)
Cash costs per oz sold, AISC per oz sold, adjusted net income (loss), adjusted EBITDA, adjusted EPS, sustaining capital and net debt are non-IFRS
measures. See Non-IFRS Measures and Cautionary Notes.
(2)
Total recordable injury frequency rate and significant environmental incident frequency rate are both reported per million hours worked. Total
recordable injury frequency rate is the total number of injuries excluding those requiring simple first aid treatment.
CONSOLIDATED OPERATIONAL AND FINANCIAL HIGHLIGHTS
Three months ended
Year ended
Operating data
Unit
December 31,
2023
September 30,
2023
December 31,
2022
December 31,
2023
December 31,
2022
(3)
Gold produced
oz
154,960
149,089
150,439
564,458
532,319
Gold sold
oz
149,861
148,231
149,386
559,481
532,137
Average realized gold price
$/oz
1,983
1,917
1,733
1,941
1,784
Cash costs per oz sold
(1)(2)
$/oz
1,330
1,363
1,206
1,350
1,315
AISC per oz sold
(1)(2)(3)
$/oz
1,657
1,630
1,523
1,612
1,622
Financial data
Revenue
M$
297.8
284.7
259.3
1,088.2
952.2
Income from mine operations
M$
38.6
25.2
32.0
109.0
85.0
Net income (loss)
M$
3.9
2.2
22.6
28.9
(106.0
)
Earnings (loss) per share (basic)
$/share
0.01
0.01
0.07
0.09
(0.35
)
Adjusted EBITDA
(1)
M$
95.3
81.2
74.3
304.4
168.0
Adjusted net income (loss)
(1)
M$
2.4
28.7
7.0
21.7
(91.5
)
Adjusted EPS
(1)
$/share
0.01
0.09
0.02
0.07
(0.30
)
Balance sheet and cash flow data
Cash and cash equivalents
(unrestricted)
M$
192.0
356.7
200.8
192.0
200.8
Net debt
(1)
M$
733.0
729.5
627.3
733.0
627.3
Operating cash flow before changes
in non-cash working capital
(5)
M$
168.2
82.6
80.0
527.5
144.3
(1)
Cash costs per oz sold, AISC per oz sold, adjusted EBITDA, adjusted net loss, adjusted EPS and net debt are non-IFRS measures. See
Non-IFRS
Measures
and
Cautionary Notes
.
(2)
Consolidated cash cost per oz sold and AISC per oz sold for the year ended December 31, 2022 excludes Santa Luz results while the mine was
in pre-commercial production up until the achievement of commercial production at the end of Q3 2022.
(3)
Operational and financial results of Mercedes are included for the period through to April 21, 2022, when Mercedes was sold.
(4)
Consolidated AISC per oz sold excludes corporate general and administration expenses.
(5)
Includes proceeds from gold prepay arrangements of $75.6 million and $225.0 million for the three months and year ended December 31, 2023,
respectively.
(6)
Numbers in tables throughout this news release may not sum due to rounding.
Gold ounces sold in Q4 2023 were marginally higher compared to Q4 2022 primarily due to higher
production at RDM, offset partially by lower production at Fazenda and Santa Luz. At RDM, the higher
production was primarily due to higher grades from the mining of in-situ ore, and reduced reliance on
rehandling low-grade ore stockpiles. At Fazenda, the lower production was primarily due to lower ore
tonnes and grades from open pit mining due to mine sequencing. At Santa Luz, the lower production
was primarily due to challenges with the elution and electrowinning circuits.
For the year ended December 31, 2023, the Company sold 5% more gold ounces compared to
2022.The increase in gold sales for the year was primarily due to higher production at Los Filos, RDM,
Santa Luz and Aurizona, offset partially by lower production at Mesquite and not having production from
Mercedes after it was sold in April 2022. The higher gold production at Los Filos was driven by
increased ore mining and stacking activity in 2023 compared to 2022. The higher gold production for the
year at RDM was for the reasons mentioned above. In addition, RDM had a temporary suspension of
operations in 2022 that affected gold production for that year. The higher production at Santa Luz was
due to a full year of commercial operations in 2023. Santa Luz achieved commercial production at the
beginning of Q4 2022. The higher production at Aurizona was due to better access to higher-grade ore
benches of the main pit and increased ore processed. The lower production at Mesquite was primarily
due to a smaller pit approach to reduce waste stripping and a longer leach cycle for some of the ore
being placed.
Revenue was higher in Q4 2023 compared to Q4 2022 primarily due to higher gold prices. The
Company realized $1,983 per ounce sold in Q4 2023 generating $297.8 million in revenue, compared to
$1,733 per ounce sold in Q4 2022 generating $259.3 million in revenue.
Cash cost per oz sold and AISC per oz sold were 10% and 9% higher in Q4 2023 compared to Q4
2022, respectively, primarily driven by higher cash costs at Los Filos and Fazenda. Cash cost per oz
sold and AISC per oz sold for 2023 were in line with 2022 results. While input costs were generally lower
in 2023, the strengthening of the Mexican Peso ("MXN") and Brazilian Réal ("BRL") compared to the
USD more than offset these lower costs in Mexico and Brazil.
In Q4 2023, income from mine operations was $38.6 million (Q4 2022 - $32.0 million) and for the year
ended December 31, 2023 was $109.0 million (year ended December 31, 2022 - $85.0 million). The
higher income from mine operations in Q4 2023 compared to Q4 2022 was mainly the result of higher
income from operations at RDM, Los Filos and Mesquite, driven by higher average realized gold price
per ounce sold at each site, as well as higher production at RDM, and lower operating costs at
Mesquite, offset partially by lower income from mine operations at Santa Luz, which was primarily due to
lower production.
The higher income from mine operations for the year ended December 31, 2023 compared to the same
period in 2022 was mainly the result of higher production at Los Filos, Aurizona and RDM, and higher
average realized gold price per ounce sold, offset partially by lower income from mine operations at
Mesquite and Santa Luz, which was primarily due to lower production. Income from mine operations for
the year ended December 31, 2023 was also impacted by the sale of Mercedes in April 2022.
Net income for Q4 2023 was $3.9 million (Q4 2022 - net income of $22.6 million) and net income for the
year ended December 31, 2023 was $28.9 million (year ended December 31, 2022 - net loss of $106.0
million). The lower net income in Q4 2023 compared to Q4 2022 was mainly due to a lower tax recovery
and higher finance expense, offset partially by higher income from mine operations.
The higher net income for the year ended December 31, 2023 compared to the same period in 2022
was mainly due to higher income from mine operations, in addition to a tax recovery of $14.1 million
(year ended December 31, 2022 - tax expense of $7.6 million) and other income of $31.1 million (year
ended December 31, 2022 - other expense of $67.9 million). Other income for the year ended
December 31, 2023 includes a $46.2 million gain on change in fair value of foreign exchange contracts
and a $34.5 million gain on sale of the Company's partial interest and reclassification of investment in i-
80 Gold, offset partially by $13.8 million in expected credit losses and write-offs. Other expense for the
year ended December 31, 2022 includes a $69.9 million loss on change in fair value of share purchase
warrants.
In Q4 2023, adjusted EBITDA was $95.3 million (Q4 2022 - $74.3 million) and for the year ended
December 31, 2023 was $304.4 million (year ended December 31, 2022 - $168.0 million). In Q4 2023,
adjusted net income was $2.4 million (Q4 2022 - $7.0 million) and for the year ended December 31,
2023 was $21.7 million (year ended December 31, 2022 - adjusted net loss of $91.5 million). The
increase in adjusted EBITDA and adjusted net income in Q4 2023 was primarily due to higher income
from mine operations, in addition to a $6.9 million realized gain on foreign exchange contracts in Q4
2023 (Q4 2022 - realized gain of $1.2 million). The increase in adjusted EBITDA and adjusted net
income for the year ended December 31, 2023 was primarily due to higher income from mine
operations, in addition to a $32.8 million realized gain on foreign exchange contracts (year ended
December 31, 2022 - realized gain of $1.2 million) and a $0.8 million realized gain on gold contracts
(year ended December 31, 2022 - realized loss of $33.0 million).
2024 GUIDANCE AND OUTLOOK
For 2024, the Company expects to produce 660,000 to 750,000 ounces of gold. The midpoint of 2024
guidance of 705,000 ounces represents an increase of more than 140,000 ounces compared to 2023
gold production. Cash costs for 2024 are estimated at $1,340 to $1,445 per oz, with AISC of $1,630 to
$1,740 per oz.
Production
(oz)
Cash Costs
($/oz)
(1)(2)
AISC
($/oz)
(1)(2)
Sustaining
expenditures (M$)
(3)
Non-sustaining
expenditures (M$)
(4)
Canada
Greenstone
(5)
105,000 - 125,000
$690 - $790
$840 - $940
$25
$95
USA
Mesquite
75,000 - 85,000
$1,345 - $1,445
$1,410 - $1,510
$5
$82
Castle Mountain
30,000 - 35,000
$2,045 - $2,145
$2,125 - $2,200
$3
$4
Mexico
Los Filos
155,000 - 175,000
$1,785 - $1,885
$2,090 - $2,190
$50
$-
Brazil
Aurizona
110,000 - 120,000
$1,070 - $1,170
$1,575 - $1,675
$58
$11
Fazenda
65,000 - 70,000
$1,195 - $1,295
$1,560 - $1,660
$25
$3
Santa Luz
70,000 - 80,000
$1,495 - $1,595
$1,720 - $1,820
$17
$4
RDM
50,000 - 60,000
$1,260 - $1,360
$1,800 - $1,900
$29
$14
Total
(6)
660,000 - 750,000
$1,340 - $1,445
$1,630 - $1,740
$212
$213
(1)
Cash costs per oz sold and AISC per oz sold, are non-IFRS measures. See Non-IFRS Measures and Cautionary Notes.
(2)
Exchange rates used to forecast 2024 cash cost and AISC per oz include a rate of BRL 5:00 to USD 1 and MXN 17.50 to USD 1.
(3)
Sustaining expenditures include asset retirement obligation accretion and amortization, exploration expense and capital expenditures. Of the $212
million sustaining expenditures, $196 million will be capital expenditures. Sustaining capital expenditure is a non-IFRS measure. See Non-IFRS
Measures and Cautionary Notes.
(4)
Non-sustaining expenditures include exploration expense and capital expenditures. Of the $213 million non-sustaining expenditures, $205 million
will be capital expenditures.
(5)
2024 Guidance at Greenstone reflects the Company’s 60% ownership of the project. Greenstone gold production guidance for 2024 includes all
ounces expected to be produced during the pre-commercial production and commercial production periods. 2024 cash cost per ounce and AISC per
ounce guidance figures are the expected costs of gold production after commercial production is achieved.
(6)
Total is the sum or average of the individual mine-level amounts. Numbers may not sum due to rounding.
The Company may revise guidance during the year to reflect changes to expected results.
Cash costs for 2024 reflect the life cycle stages of the assets in the Company's portfolio and also that,
while consumables inflation has abated, labour and equipment costs are expected to face continued
upward pressure throughout 2024. In addition, compared to many other countries the BRL and MXN
were top performing currencies compared to the USD in 2022 and 2023 and management expects
relative stability in the BRL and MXN compared to the USD throughout 2024.
Sustaining expenditures in 2024 of $212 million includes investing: (i) $60 million in capitalized stripping
programs, with the largest investments at Aurizona and Los Filos, (ii) $58 million in equipment costs, of
which $17 million relates to the Los Filos open pit and underground fleets and processing equipment
and $22 million relates to the RDM mobile fleet costs, and (iii) $40 million for tailings storage facility
("TSF") lifts and maintenance at all four Brazilian operations and Greenstone.
Sustaining expenditures for 2024 include $13 million for exploration with a focus on reserve replacement
across the portfolio. Non-sustaining expenditures include $13 million for step-out and regional
exploration, primarily at Aurizona and in the Bahia district.
Production and cash flow are expected to grow each quarter through 2024 due to normal seasonality
and Greenstone ramp up throughout the year.
The Company's primary development focus for 2024 continues to be advancing Greenstone to
commercial production, with Equinox Gold's 60% share of capital in 2024 forecast to be $95 million. In
addition, the Company is advancing engineering and permitting for the Castle Mountain Phase 2
expansion, expects to start underground portal development for the Aurizona underground expansion in
the second half of the year and is advancing dialogue with local communities at Los Filos to agree on a
long-term development plan for the mine.
Cost and production guidance for Los Filos is subject to the successful execution of new social and land
access agreements with local community stakeholders and landowners and collective agreements with
unions. These new agreements are necessary to help ensure the long-term economic and investment
viability of the mine, including the addition of a new 10,000 tpd carbon-in-leach ("CIL") processing plant
to increase recoveries from higher-grade ore. If the Company is unable to satisfactorily complete these
agreements, the Company will re-evaluate the current operation and may elect to suspend operations
indefinitely or until such time as new agreements are in place. Accordingly, Los Filos production and
cost guidance for 2024 is subject to change.
SELECTED FINANCIAL RESULTS FOR THE THREE MONTHS AND YEAR ENDED DECEMBER
31, 2023 AND 2022
$ amounts in millions, except per share amounts
Three months ended
Year ended
December 31,
2023
December 31,
2022
December 31,
2023
December 31,
2022
Revenue
$
297.8
$
259.3
$
1,088.2
$
952.2
Cost of sales
Operating expense
(198.2
)
(168.2
)
(764.2
)
(680.1
)
Depreciation and depletion
(61.0
)
(59.0
)
(215.0
)
(187.2
)
Income from mine operations
38.6
32.0
109.0
85.0
Care and maintenance expense
-
(1.4
)
(1.4
)
(9.5
)
Exploration and evaluation expense
(3.3
)
(4.5
)
(11.7
)
(18.4
)
General and administration expense
(10.0
)
(12.8
)
(46.2
)
(46.7
)
Income (loss) from operations
25.3
13.3
49.6
10.4
Finance expense
(17.9
)
(12.4
)
(60.2
)
(40.4
)
Finance income
2.4
2.6
11.7
5.6
Share of net income (loss) in associate
(0.4
)
(3.6
)
(17.5
)
(6.2
)
Other income (expense)
(1.0
)
(4.9
)
31.1
(67.9
)
Net income (loss) before taxes
8.3
(5.0
)
14.8
(98.4
)
Income tax recovery (expense)
(4.5
)
27.6
14.1
(7.6
)
Net income (loss)
$
3.9
$
22.6
$
28.9
$
(106.0
)
Net income (loss) per share attributable to Equinox Gold
shareholders
Basic
$
0.01
$
0.07
$
0.09
$
(0.35
)
Diluted
$
0.01
$
0.07
$
0.09
$
(0.35
)
Additional information regarding the Company's financial results and the Company's business strategy
are available in the Company's 2023 audited consolidated Financial Statements and accompanying
news release for the three months and year ended December 31, 2023, which will be available for
download on the Company's website at
www.equinoxgold.com
, on SEDAR+ at
www.sedarplus.ca
and
on EDGAR at
www.sec.gov
.
CONFERENCE CALL AND WEBCAST
Equinox Gold will host a conference call and webcast on Thursday, February 22, 2024 commencing at
7:30 am Vancouver time to discuss the Company's fourth quarter results and activities underway at the
Company. All participants will have the opportunity to ask questions of Equinox Gold's CEO and
executive team. The webcast will be archived on Equinox Gold's website until August 22, 2024.
Conference call
Toll-free in U.S. and Canada: 1-800-319-4610
International callers: +1 604-638-5340
Webcast
www.equinoxgold.com
ABOUT EQUINOX GOLD
Equinox Gold is a growth-focused Canadian mining company with seven operating gold mines,
commissioning underway at a new project, and a clear plan to achieve more than one million ounces of
annual gold production from a pipeline of expansion projects. Equinox Gold's common shares are listed
on the TSX and the NYSE American under the trading symbol EQX. Further information about Equinox
Gold's portfolio of assets and long-term growth strategy is available at
www.equinoxgold.com
or by email
at
.
EQUINOX GOLD CONTACTS
Greg Smith, President & Chief Executive Officer
Rhylin Bailie, Vice President, Investor Relations
Tel: +1 604-558-0560
Email:
CAUTIONARY NOTES
Non-IFRS Measures
This news release refers to cash costs, cash costs per oz sold, AISC, AISC per oz sold, AISC
contribution margin, adjusted net income, adjusted EPS, mine-site free cash flow, adjusted EBITDA, net
debt and sustaining capital expenditures that are measures with no standardized meaning under IFRS,
i.e. they are non-IFRS measures, and may not be comparable to similar measures presented by other
companies. Their measurement and presentation is consistently prepared and is intended to provide
additional information and should not be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. Numbers presented in the tables below may not sum
due to rounding.
Cash Costs and Cash Costs per oz Sold
Cash costs is a common financial performance measure in the gold mining industry; however, it has no
standard meaning under IFRS. The Company reports total cash costs on a per oz sold basis. The
Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain
investors use this information to evaluate the Company's performance and ability to generate operating
income and cash flow from mining operations. Cash costs are calculated as mine site operating costs
and are net of silver revenue. Cash costs are divided by ounces sold to arrive at cash costs per oz sold.
In calculating cash costs, the Company deducts silver revenue as it considers the cost to produce the
gold is reduced as a result of the by-product sales incidental to the gold production process, thereby
allowing management and other stakeholders to assess the net costs of gold production. The measure
is not necessarily indicative of cash flow from operations under IFRS or operating costs presented under
IFRS.
AISC per oz Sold
The Company uses AISC per oz of gold sold to measure performance. The methodology for calculating
AISC was developed internally and is calculated below. Current IFRS measures used in the gold
industry, such as operating expenses, do not capture all of the expenditures incurred to discover,
develop and sustain gold production. The Company believes the AISC measure provides further
transparency into costs associated with producing gold and will assist analysts, investors and other
stakeholders of the Company in assessing its operating performance, its ability to generate free cash
flow from current operations and its overall value. AISC includes cash costs (described above) and also
includes sustaining capital expenditures, sustaining lease payments, reclamation cost accretion and
amortization and exploration and evaluation costs.
This measure seeks to reflect the full cost of gold production from current operations, therefore,
expansionary capital and non-sustaining expenditures are excluded.
Prior to Q2 2023, the Company's calculation of cash costs included the principal portion of sustaining
lease payments. Commencing in Q2 2023, to improve the comparability of the Company's financial
performance measures with its peers and align to the standards outlined by the World Gold Council, the
Company has excluded sustaining lease payments from its calculation of cash costs and has included
them as a component of AISC. The calculations of cash costs and AISC for comparative periods have
been adjusted to conform with the current methodology and are different from the measures previously
reported.