Equinox Gold Reports Second Quarter 2022 Financial and Operating Results
TSX: EQX
NYSE-A:EQX
Suite 1501 - 700 West Pender St., Vancouver, BC Canada V6C 1G8
[email protected] +1 604.558.0560 www.equinoxgold.com
NEWS RELEASE
Equinox Gold Reports Second Quarter 2022 Financial and Operating Results
all financial figures are in US dollars, unless otherwise indicated
August 3, 2022 – Vancouver, BC – Equinox Gold Corp. (TSX: EQX, NYSE American: EQX) (“Equinox Gold” or
the “Company”) is pleased to announce its second quarter 2022 summary financial and operating results. The
Company’s unaudited condensed consolidated interim financial statements and related management’s discussion
and analysis for the three and six months ended June 30, 2022 will be available for download on SEDAR, on
EDGAR and on the Company’s website. The Company will host a conference call and webcast on August 4, 2022
commencing at 7:30 am Vancouver time to discuss the Company’s second quarter results and activities underway
at the Company’s projects. Further details are provided at the end of this news release.
Christian Milau, CEO of Equinox Gold, c ommented: “Although we experienced operational challenges at several
of our sites this quarter, we expect improved performance in the second half of the year with increased production
and lower costs. Inflation has certainly increased the cost of consumabl es and our team is working hard to find
offsetting savings so we can maintain a strong business during this market downturn. The new resin- in-leach
circuit at the Santa Luz plant is performing well. Recoveries are consistently above 70% and as high as 82%. With
commercial production anticipated in Q3 2022, Santa Luz will contribute to increased production in the fourth
quarter and into 2023.
“During the first half of the year we achieved excellent construction progress at our Greenstone project in Ontario,
which is 35% complete and remains on schedule and on budget. The team has done an exceptional job to control
costs in this inflationary environment and is on track to have the majority of buildings enclosed by year end, which
is key to maintaining productivity during the winter months. We also strengthened our balance sheet, reduced our
cost of capital and improved our liquidity by expanding and amending our credit facility. We appreciate the strong
support and confidence from our lending syndicate.
“Looking forward, Equinox Gold is on track to deliver significant growth over the next few years. Commercial
production at Santa Luz and higher -grade ore at Los Filos should both contribute to increased production and
lower costs in 2023. The big jump will com e in 2024 when we achieve production at Greenstone, which will
contribute more than 200,000 ounces of low -cost production annually once it has ramped up to full capacity. We
also continue to advance the Castle Mountain, Los Filos and Aurizona expansions, w hich could collectively
contribute more than 300,000 ounces of annual production. As we plan for Greg Smith to take over as CEO, I am
confident that Equinox Gold has the foundational assets, the team and the leadership required to achieve its long-
term goals.”
HIGHLIGHTS FOR THE THREE MONTHS ENDED JUNE 30, 2022
Operational
• Produced 120,813 oz of gold during the Quarter; sold 120,395 oz of gold at an average realized gold price of
$1,856 per oz
• Total cash costs of $1,482 per oz and AISC of $1,657 per oz(1)(2)
• Total recordable injury frequency rate of 3.21 per million hours worked on a rolling 12-month basis, with two
lost-time injuries during the Quarter
• Temporarily suspended operations at RDM and withdrew RDM’s guidance on May 16, 2022 as the result of a
permitting delay for a scheduled tailings storage facility (“TSF”) raise; the permit was received on May 27,
2022, the TSF raise is underway and operations resumed in early July
Earnings
• Earnings from mine operations of $17.0 million
• Net loss of $78.7 million or $(0.26) per share
• Adjusted net loss(1) of $47.9 million or $(0.16) per share, after adjusting for certain non-cash expense items(3)
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Financial
• Cash flow from operations before changes in non-cash working capital of $16.4 million ($26.9 million cash flow
used in operations after changes in non-cash working capital)
• Adjusted EBITDA(1)(3) of $24.1 million
• Expenditures of $18.0 million in sustaining capital and $134.2 million in non-sustaining capital(1)
• Cash and cash equivalents (unrestricted) of $159.7 million at June 30, 2022
- In April 2022, received $75 million on closing of the sale of Mercedes and $40 million on exercise of
Solaris Resources Inc. (“Solaris”) warrants issued by the Company
• Net debt(1) of $472.2 million at June 30, 2022
Construction, development and exploration
• Continued ramp up and commissioning at Santa Luz with the expectation of achieving commercial production
in Q3 2022
• Advanced Greenstone construction
- More than 1 million work hours complete with no lost-time injuries
- On schedule to pour gold in the first half of 2024, 35% complete at July 22, 2022
- On budget, with 56% of total capital costs contracted and 26% ($315 million) of total construction budget
spent at June 30, 2022 (100% basis)
- Independent quantitative risk assessment confirmed the validity of the schedule and construction budget,
as announced on October 27, 2021, based on detailed engineering and construction progress
- Construction progress is discussed in the Development Projects section of this MD&A and documented
in the Greenstone photo gallery on Equinox Gold’s website at www.equinoxgold.com
• Exploration drilling in the 70- km-long greenstone belt that hosts Fazenda and Santa Luz identified multiple
near-mine and regional discoveries that highlight potential additions to Mineral Reserves and Mineral
Resources
Corporate
• Closed the sale of Mercedes on April 21, 2022 to Bear Creek Mining Corporation (“Bear Creek”) and received
a cash payment of $75 million, a deferred cash payment of $25 million due within six months of the date of the
close of the sale, a 2% net smelter return on Mercedes production and 24.73 million shares of Bear Creek
• Received $40 million (C$50 million) and transferred five million shares of the Company’s investment in Solaris
following the exercise of warrants the Company had granted on April 28, 2021
• Acquired 1 million shares of Solaris at C$6.75 per share on exercise of share purchase warrants. Following
the exercise of the share purchase warrants, the Company owns 13.8 million shares (12.2% interest on a basic
basis) of Solaris
• Published the Company’s 2021 Environmental, Social and Government (“ESG”) report summarizing 2021 ESG
performance and 2022 targets, launched a new ESG website portal and held an ESG -focused investor call
• Partnered with Sandstorm Gold Royalties Ltd. to create Sandbox Royalties C orp., a new metals royalty
company
- Contributed a portfolio of royalties and a note receivable for consideration of $28.4 million in common
shares of Sandbox Royalties
- Invested $3.3 million in the initial financing to hold a total of 58.1 million common shares of Sandbox
Royalties (34.4% interest on a basic basis) as a corporate investment
_____________________________
(1) Cash costs per oz sold, AISC per oz sold, adjusted net income, adjusted EBITDA, adjusted EPS, sustaining capital, non-sustaining capital
and net debt are non-IFRS measures. See Non-IFRS Measures and Cautionary Notes.
(2) Cash cost per oz sold and AISC per oz sold for the three and six months ended June 30, 2022 excludes Santa Luz results as the mine
is currently in the pre-commercial production phase and has not yet achieved commercial production.
(3) Primary adjustments for the three months ended June 30, 2022 were $39.6 million loss on change in fair value of share purchase
warrants, $17.3 million unrealized gain on gold contracts, $6.2 million unrealized loss on foreign exchange contracts, $7.9 million
unrealized foreign exchange gain, and a $5.9 million share of net loss on investment in associate.
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RECENT DEVELOPMENTS
• Updated production and cost guidance:
- Production estimated at 550,000 to 615,000 oz of gold with cash costs of $1,200 to $1,250 per oz and
AISC of $1,470 to $1,530 per oz sold
- AISC includes $171 million of sustaining capital across the sites with non- sustaining capital of $539
million, allocated primarily to Greenstone construction ($348 million)
• In July 2022, increased the Company’s liquidity by amending its credit facilities
- Increased the revolving credit facility (“Revolving Facility”) from $400 million to $700 million
• $73.3 million of outstanding principal balance under the term loan rolled into Revolving Facility,
eliminating need for principal payments through mid-2026
• $100 million of Revolving Facility drawn in July 2022; $227 million of Revolving Facility undrawn as
of the date of this MD&A(1)
- Added a $100 million uncommitted accordion feature
- Extended the maturity from March 8, 2024 to July 28, 2026 with the ability to request a one-year extension
- Decreased borrowing costs by reducing Revolving Facility interest rate by an average of 25 to 50 basis
points
• In August 2022, announced that Greg Smith, currently President of Equinox Gold, will succeed Christian Milau
as Chief Executive Officer and a Director of Equinox Gold effective September 1, 2022
_____________________________
(1) Future draws of the Revolving Facility are subject to customary security registration updates that are expected to take approximately 90
days to complete
CONSOLIDATED OPERATIONAL AND FINANCIAL HIGHLIGHTS
Three months ended Six months ended
Operating data Unit
June 30,
2022
March 31,
2022
June 30,
2021
June 30,
2022
June 30,
2021
Gold produced oz 120,813 117,452 122,656 238,265 251,919
Gold sold oz 120,395 119,324 124,712 239,719 253,268
Average realized gold price $/oz 1,856 1,862 1,806 1,859 1,796
Cash costs per oz sold(1)(2) $/oz 1,482 1,237 1,089 1,358 1,115
AISC per oz sold(1)(2)(3) $/oz 1,657 1,577 1,383 1,616 1,433
Financial data
Revenue M$ 224.6 223.2 226.2 447.8 455.9
Earnings from mine operations M$ 17.0 28.5 41.3 45.5 85.5
Net (loss) income M$ (78.7) (19.8) 403.7 (98.5) 454.0
(Loss) earnings per share $/share (0.26) (0.07) 1.37 (0.33) 1.69
Adjusted EBITDA(1) M$ 24.1 43.4 51.9 67.2 112.8
Adjusted net loss(1) M$ (47.9) (23.9) (0.8) (72.0) (4.0)
Adjusted EPS(1) $/share (0.16) (0.08) — (0.24) (0.02)
Balance sheet and cash flow data
Cash and cash equivalents
(unrestricted) M$ 159.7 151.2 333.9 159.7 333.9
Net debt(1) M$ 472.2 385.1 215.6 472.2 215.6
Operating cash flow before changes
in non-cash working capital M$ 16.4 33.5 31.6 49.9 93.6
(1) Cash costs per oz sold, AISC per oz sold, adjusted EBITDA, adjusted net income, 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 three and six months ended June 30, 2022 excludes Santa Luz results
as the mine is currently in pre-commercial production and has not yet achieved commercial production.
(3) AISC per oz sold excludes corporate general and administration expenses.
(4) Numbers in tables throughout this MD&A may not sum due to rounding.
The Company sold fewer gold ounces for the three and six months ended June 30, 2022 compared to the
comparative periods of 2021. The decrease was mainly driven by decreased production at Aurizona and RDM
and by lower gold sales at Mercedes, as the operation was sold on April 21, 2022. Lower gold production at
Aurizona was in part due to processing stockpile ore with lower gold grades as high rainfall impeded access to
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higher-grade ore from the Piaba open pit. Lower gold production at RDM was mainly due to the temporary
suspension of mining and plant operations in mid- May due to a delay in receiving permits for the scheduled TSF
raise. These reductions were partially offset by increased production at Mesquite and Los Filos and the
contribution of pre-commercial production from Santa Luz. Higher gold production at Mesquite was due to mining
the core of the Brownie ore body, resulting in higher grades and a lower strip ratio. Higher gold production at Los
Filos was due to more recoverable ounces placed due to better grades from the open pi t. Although there was a
contribution of gold from pre- commercial production at Santa Luz, the ramp up was slower than anticipated due
to modifications required to handle resin- in-leach processing at an industrial scale, rectification of some piping
and leach tank issues following construction, and also working to achieve a steady blend of ore feed. Commercial
production at Santa Luz is expected in Q3 2022.
In Q2 2022, earnings from mine operations were $17.0 million (Q2 2021 - $41.3 million) and for the si x months
ended June 30, 2022 were $45.5 million (six months ended June 30, 2021 - $85.5 million). Earnings from mine
operations were impacted by lower gold production, higher operating costs due to supply constraints, and
inflationary pressures, particularly from increased prices of oil and consumables that impacted input prices. The
Company incurred a net loss in Q2 2022 of $78.7 million (Q2 2021 - net income of $403.7 million) and a net loss
for the six months ended June 30, 2022 of $98.5 million (six months ended June 30, 2021 - net income of $454.0
million). The net losses were impacted by lower earnings from mine operations and a loss on the change in fair
value of share purchase warrants compared to a gain during the comparative periods of 2021. Result s for the
comparative periods of 2021 were also impacted by a $186.1 million gain on reclassification of investment in
Solaris, a $81.4 million gain on bargain purchase of Premier, a $50.3 million gain on sale of partial interest in
Solaris and a $45.4 million gain on the sale of the Pilar mine.
In Q2 2022, adjusted EBITDA was $24.1 million (Q2 2021 - $51.9 million) and for the six months ended June 30,
2022 was $67.2 million (six months ended June 30, 2021 - $112.8 million). In Q2 2022, adjusted net loss was
$47.9 million (Q2 2021 - adjusted net loss of $0.8 million) and for the six months ended June 30, 2022 was $72.0
million (six months ended June 30, 2021 - adjusted net loss of $4.0 million). Adjusted EBITDA and adjusted net
loss were impacted by lower earnings from mine operations compared to the comparative periods of 2021.
Sustaining(1) and non-sustaining(1) capital expenditures
Three months ended June 30,
2022
Six months ended June 30,
2022
$ amounts in millions Sustaining
Non-
sustaining Sustaining
Non-
sustaining
USA
Mesquite(2) $ 6.8 $ 2.1 8.1 3.7
Castle Mountain 3.6 0.9 10.1 3.0
Mexico
Los Filos(3) 2.4 16.2 7.2 29.5
Mercedes 1.4 0.2 6.9 0.4
Brazil
Aurizona(3) — 0.6 15.0 0.8
Fazenda(3) 3.1 0.1 6.3 0.2
RDM(3) 0.5 7.6 1.5 20.5
Santa Luz(2) — 19.6 — 39.9
Canada
Greenstone(4) — 86.8 — 126.9
Total sustaining and non-sustaining capital expenditures $ 18.0 $ 134.2 $ 55.0 $ 224.9
(1) Sustaining capital and non-sustaining capital expenditures are non-IFRS measures. See Non-IFRS Measures and Cautionary Notes.
(2) Non-sustaining capital for Mesquite for the three and six months ended June 30, 2022 excludes $3.0 million and $6.1 million, respectively,
for lease payments for haul trucks, which are considered a non- sustaining capital addition. Non-sustaining capital for Santa Luz for the
three and six months ended June 30, 2022 excludes $0.7 million and $1.0 million, respectively, f or lease payments classified as non-
sustaining until commercial production is achieved.
(3) For the three months ended June 30, 2022, non-sustaining capital for Aurizona, Fazenda, RDM, Los Filos and Santa Luz excludes $0.6
million, $0.5 million, $1.2 million, $0.1 million, and $2.1 million, respectively, of exploration costs expensed. For the six months ended
June 30, 2022, non- sustaining capital for Aurizona, Fazenda, RDM, Los Filos and Santa Luz excludes $1.0 million, $0.7 million, $2.0
million, $0.2 million, and $2.6 million, respectively, of exploration costs expensed.
(4) Capital expenditures at Greenstone represent the Company’s 60% ownership of the project.
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SELECTED FINANCIAL RESULTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021
$ amounts in millions, except per share amounts
Three months ended Six months ended
June 30,
2022
June 30,
2021
June 30,
2022
June 30,
2021
Revenue $ 224.6 $ 226.2 $ 447.8 $ 455.9
Cost of sales
Operating expense (170.7) (139.9) (323.0) (286.7)
Depreciation and depletion (37.0) (45.0) (79.3) (83.7)
Earnings from mine operations 17.0 41.3 45.5 85.5
Care and maintenance expense (4.7) (7.2) (5.1) (9.2)
Exploration expense (4.5) (4.7) (7.7) (7.7)
General and administration expense (11.1) (15.5) (22.9) (22.8)
Income from operations (3.3) 13.9 9.8 45.8
Finance expense (8.2) (11.8) (17.6) (20.5)
Finance income 0.9 0.2 1.7 0.6
Share of net (loss) income in associate (5.9) 0.4 (7.5) (2.3)
Other (expense) income (32.7) 385.2 (51.7) 434.5
Net (loss) income before taxes (49.2) 387.9 (65.3) 458.1
Income tax (expense) recovery (29.5) 15.8 (33.2) (4.1)
Net (loss) income $ (78.7) $ 403.7 $ (98.5) $ 454.0
Net (loss) income per share attributable to Equinox Gold
shareholders
Basic $ (0.26) $ 1.37 $ (0.33) $ 1.69
Diluted $ (0.26) $ 1.19 $ (0.33) $ 1.44
Additional information regarding the Company’s financial results and activities underway at the Company is
available in the Company’s Q2 2022 Financial Statements and accompanying management’s discussion and
analysis for the three and six months ended June 30, 2022, which will be available for download on the Company’s
website at www.equinoxgold.com, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.
2022 GUIDANCE
The Company has updated its 2022 production and cost guidance to reflect the disruption to mining and operations
at RDM, a longer-than-expected ramp-up at Santa Luz that has prolonged pre-commercial production and further
inflation of approximately 6% on a consolidated basis.
Production (oz) Cash Costs ($/oz)(1) AISC ($/oz)(1)(2)
Sustaining Capital
(M$)(1)(3)
Non-sustaining
Capital (M$)(1)(4)
USA
Mesquite 120,000 - 130,000 $1,010 - $1,050 $1,270 - $1,310 $38 $23
Castle Mountain 25,000 - 35,000 $1,130 - $1,160 $1,550 - $1,620 $14 $9
Mexico
Los Filos 155,000 - 170,000 $1,620 - $1,670 $1,800 - $1,840 $30 $63
Brazil
Aurizona 120,000 - 130,000 $900 - $940 $1,370 - $1,410 $61 $10
Fazenda 60,000 - 65,000 $1,050 - $1,080 $1,250 - $1,290 $14 $10
RDM 25,000 - 30,000 $1,750 - $1,780 $2,000 - $2,060 $9 $25
Santa Luz 45,000 - 55,000 $1,000 - $1,050 $1,120 - $1,190 $5 $52
Canada
Greenstone — — — — $348
Total(5) 550,000 - 615,000 $1,200 - $1,250 $1,470 - $1,530 $171 $539
(1) Cash costs per oz sold, AISC per oz sold, sustaining capital and non-sustaining capital are non-IFRS measures. See Non-IFRS Measures
and Cautionary Notes
(2) Exchange rates used to forecast 2022 AISC include a rate of BRL 5:00 to USD 1 and MXN 19.0 to USD 1
(3) Sustaining capital includes asset retirement obligation, amortization, accretion and sustaining exploration expenditures
(4) Non-sustaining capital includes non-sustaining exploration expenditures
(5) Group total is the sum or average of the individual mine-level amounts. Numbers may not sum due to rounding
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Guidance for RDM was withdrawn on May 16, 2022 to reflect the disruption to operations in both Q1 and Q2 2022,
as previously mentioned. RDM guidance has been updated to reflect these disruptions and also to reflect a change
to the mine plan to defer waste stripping and instead focus on the processing of low -grade stockpiles while the
TSF raise is completed and water in the open pit is pumped out and evaporated. RDM was in the midst of a waste
stripping campaign at the time of the suspension of operations in May. The current plan of operations minimizes
cash outflow while the TSF raise is completed and during a period in which Greenstone is in a high capital
expenditure phase, while maintaining the long- term value of RDM. Low -grade dumps are sufficient to sustain
operations for approximately two years, albeit resulting in lower gold production.
The Santa Luz ramp up has been slower than anticipated and resulted in lower gold production during the period
than expected. The longer ramp up was due to modifications required to handle resin- in-leach processing at an
industrial scale, rectification of some piping and leach tank issues following construction, and also working to
achieve a steady blend of ore feed. See Development Projects section for discussion of throughput and
recoveries, which are approaching expected levels in Q3 2022. Los Filos production guidance has been lowered
slightly to reflect a delay in accessing higher-grade ore zones in the Bermejal underground.
Guidance for the other mines remains as originally disclosed on January 25, 2022. As a result, consolidated
production for 2022 is forecast at 550,000 to 615,000 oz of gold (compared to the original forecast of 625,000 to
710,000 oz of gold).
Cost escalation for certain consumables during the first half of 2022, including diesel, cyanide and grinding media,
and lower grades processed than projected, has resulted in increased cash costs at several of the Company’s
mines. As a result, although production is expected to increase at all of the mines in the second half of the year,
guidance for cash costs and AISC per oz has been increased at all of the mines with the exception of Mesquite.
Updated consolidated cash costs are estimated at $1,200 to $1,250 per oz with AISC of $1,470 to $1,530 per oz
sold (compared to the original forecast of $1,080 to $1,140 per oz cash costs with AISC of $1,330 to $1,415 per
oz of gold sold).
Sustaining capital guidance has decreased principally due to the delayed Santa Luz commercial production which
has resulted in some sustaining capital being reclassified as non- sustaining capital and an updated mine plan at
Mesquite that anticipates less deferred stripping. Despite the reduction to sus taining capital, an increase in cash
costs per oz due to cost escalation, and changes to mine sequences driving weaker than expected production,
are reflected in a 10% increase to the AISC per oz guidance range. Non- sustaining capital guidance is generally
consistent with previous guidance with the exception of Santa Luz, where modifications to the plant have resulted
in an additional estimated $20 million of non- sustaining capital. In addition, Greenstone will spend more in 2022
on plant and mill buildings in part due to steel price inflation, although these increases have been offset by cost
reductions in other areas and there is no change to the overall construction budget.
The Company may revise guidance during the year to reflect changes to expected results.
CONFERENCE CALL AND WEBCAST
Equinox Gold will host a conference call and webcast on Thursday, August 4, 2022 commencing at 7:30 am
Vancouver time to discuss the Company’s second quarter results and activities underway at the Company’s
projects. 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 February 4, 2023.
Conference call
Toll-free in U.S. and Canada: 1-800-319-4610
International callers: +1 604-638-5340
Webcast
www.equinoxgold.com
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ABOUT EQUINOX GOLD
Equinox Gold is a Canadian mining company operating entirely in the Americas, with six operating gold mines, a
mine in commissioning, and a clear path to achieve more than one million ounces of annual gold production from
a pipeline of development and 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 [email protected].
EQUINOX GOLD CONTACTS
Christian Milau, Chief Executive Officer
Rhylin Bailie, Vice President, Investor Relations
Tel: +1 604-558-0560
Email: [email protected]
CAUTIONARY NOTES
Non-IFRS Measures
This MD&A 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 and non-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 indust ry; 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 eva luate the Company’s
performance and ability to generate operating income and cash flow from mining operations. Cash costs include mine site
operating costs plus lease principal payments, but are exclusive of depreciation and depletion, reclamation, capital and
exploration costs and net of by-product sales and then divided by ounces sold to arrive at cash costs per oz sold. 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 is reporting AISC per oz of gold sold. 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. In calculating AISC, the Company includes silver by -product credits 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 following table provides a reconciliation of cash costs per oz of gold sold and AISC per oz of gold sold to the most directly
comparable IFRS measure on an aggregate basis.
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$’s in millions, except ounce and per oz
figures
Three months ended Six months ended
June 30,
2022
March 31,
2022
June 30,
2021
June 30,
2022
June 30,
2021
Gold ounces sold 120,395 119,324 124,712 239,719 253,268
Santa Luz gold ounces sold(1) (4,978) (210) — (5,188) —
Adjusted gold ounces sold 115,417 119,114 124,712 234,531 253,268
Operating expenses $ 170.7 $ 152.4 $ 139.9 $ 323.0 $ 286.7
Lease payments 0.5 2.4 1.0 2.9 3.3
Silver by-product credits (1.1) (1.0) (1.6) (2.1) (1.7)
Fair value adjustment on acquired inventories 7.6 (5.9) (3.5) 1.7 (5.8)
Santa Luz operating expenses incurred during
pre-commercial production(1) (6.6) (0.5) — (7.0) —
Total cash costs $ 171.1 $ 147.3 $ 135.9 $ 318.4 $ 282.5
Cash costs per oz sold $ 1,482 $ 1,237 $ 1,089 $ 1,358 $ 1,115
Total cash costs $ 171.1 $ 147.3 $ 135.9 $ 318.4 $ 282.5
Sustaining capital 18.0 37.1 34.1 55.0 75.4
Reclamation expenses 2.3 2.4 2.5 4.7 5.2
Sustaining exploration expenses 0.1 1.0 — 1.1 —
Santa Luz reclamation expense incurred
during pre-commercial production(1) (0.2) — — (0.2) —
Total AISC 191.2 187.8 172.5 379.1 363.0
AISC per oz sold $ 1,657 $ 1,577 $ 1,383 $ 1,616 $ 1,433
(1) Consolidated cash cost per oz sold and AISC per oz sold for the three and six months ended June 30, 2022 excludes Santa Luz results
as the mine is currently in pre-commercial production and has not yet achieved commercial production.
Sustaining and non-sustaining capital reconciliation
Sustaining capital expenditures are defined as those expenditures which do not increase annual gold ounce production at a
mine site and excludes all expenditures at the Company’s projects and certain expenditures at the Company’s operating sites
which are deemed expansionary. Sustaining capital expenditures can include, but are not limited to, capitalized stripping costs
at open pit mines, underground mine development, mining and milling equipment and TSF raises.
The following table provides a reconciliation of sustaining capital expenditures to the Company’s total capital expenditures for
continuing operations.
Three months ended Six months ended
$’s in millions
June 30,
2022
March 31,
2022
June 30,
2021
June 30,
2022
June 30,
2021
Capital additions to mineral properties, plant
and equipment(1) $ 167.4 $ 129.1 $ 108.0 $ 296.5 $ 220.2
Less: Non-sustaining capital at operating sites (27.7) (30.3) (25.2) (58.0) (52.3)
Less: Non-sustaining capital at development
projects (106.4) (60.4) (28.0) (166.8) (36.3)
Less: Capital expenditures - corporate (10.1) (0.1) (0.3) (10.2) (0.7)
Less: Other non-cash additions(2) (5.2) (1.2) (20.5) (6.4) (55.5)
Sustaining capital expenditures $ 18.0 $ 37.1 $ 34.1 $ 55.0 $ 75.4
(1) Per note 5 of the condensed consolidated interim financial statements. Capital additions are exclusive of non-cash changes to reclamation
assets arising from changes in discount rate and inflation rate assumptions in the reclamation provision.
(2) Non-cash additions include right -of-use assets associated with leases recognized in the period, capitalized depreciation for deferred
stripping activities, and capitalized non-cash share-based compensation.
Total mine-site free cash flow
Mine-site free cash flow is a non-IFRS financial performance measure. The Company believes this measure is a useful
indicator of its ability to operate without reliance on additional borrowing or usage of existing cash. Mine- site free cash flow is
intended to provide additional information only and does not have any standardized meaning under IFRS and may not be
comparable to similar measures of performance presented by other mining companies. Mine-site free cash flow should not be
considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
The following table provides a reconciliation of mine-site free cash flow to the most directly comparable IFRS measure on an
aggregate basis: