Why the Market is Loving the Equinox Gold and Caliber $1.8 Billion Merger
Summary
Merger Overview: The $1.8 billion merger between Caliber and Equinox Gold aims to create a company with a near-term vision of producing a million ounces of gold annually, leveraging a strong leadership team and asset portfolio.
Strategic Rationale: The merger combines Caliber's exploration strengths with Equinox's asset base, addressing past underperformance by focusing on execution and shareholder value creation.
Operational Focus: Equinox 2.0 is prioritizing operational excellence and realistic expectations, aiming to deliver consistent shareholder value through improved execution and strategic asset management.
Asset Portfolio: The combined company will evaluate its asset portfolio, potentially divesting non-core assets to focus on high-margin, tier-one jurisdiction projects like Greenstone in Ontario and Valentine in Newfoundland.
Market Positioning: The merger positions the company to capitalize on higher gold prices, with a focus on quality over quantity, aiming to become a top-tier gold producer in North America.
Leadership and Vision: The leadership team, with significant personal investment in the company, emphasizes transparency, operational delivery, and a clear vision of becoming a $20 billion company with a $30 share price.
Future Outlook: Investors should watch for updates on asset divestitures, production milestones at Valentine, and exploration results, as the company seeks to enhance its market valuation and shareholder returns.
Transcript
How could you not want a guy that looked like Ross Bey? >> Sure. >> What a great person to have. >> Mhm. >> Right. What was his single largest frustration is if we hadn't yet surfaced the value. You had Caliber which was a deliverer of You had Equinox which was an M&A. You're putting this together and you can create a lot of value out of this portfolio of assets. This is J. Martin. >> Darren, it's so good to have you back in the studio, man. Good to see you. >> Yeah, appreciate it, Joe. It's been a while, but great to be back with you. >> It's been a while, and a few things have changed since the last time uh you and I sat down together. So, normally I like to begin these conversations getting your thoughts, unpacking the gold market a little bit, what you're paying attention to. Uh, today I just want to actually jump in to the recent transaction and then we're going to end up talking gold market anyways. So, we'll get there, but obviously the big news since the last time you were in front of my audience is the $1.8 billion merger between Caliber and Equinox Gold. And the reason I want to I want to headline this to begin our conversation is because investors should be paying attention to this. This is a new company with uh sights on a million ounces of production in the near-term vision. Um you've taken the helm as CEO. Uh you've been on my show many times talking about your previous company and the success with that organization. Ross Bey is staying on as chairman and Ross has been on my show talking about Equinox a few times. Um, and so this is like a great marriage of leadership and assets. I think 1 plus 1 becomes three. But I want to unpack it a little bit here. So let's begin with the why. Why did this transaction happen, Darren? >> Well, I guess it's it's there's two components to it. If you're looking at from a caliber perspective, you're looking at it from an equinox perspective. Right. As a caliber perspective, you know, we had a great reate opportunity with the birth of Valentine coming up, which we're seeing today. We've actually started processing or at Valentine in Newf Finland. We'll see first gold coming out later this month. So, we're in really good situation. So, but what next for Caliber? You know, we're an explorer backed by, you know, quarter million ounces a year of production. So, we saw good run rate, but how do we continue to grow shareholder value? So, we looked at Equinox and saw there's a great asset base, but there's something missing from Equinox. It hadn't developed the credibility in the market that the assets really should have should have seen. >> Sure. >> Right. And you know, Ross is a great steward of and Ross and Greg had done a great job over the previous decade of bolting those assets together, but it really hadn't surfaced value from those assets. So, we looked at it and thought, well, why had Equinox 1.0, you know, I'll call it, you know, performed basically flat for the last 3 years on a share price perspective when we'd seen a great run in gold. We'd seen a peer group from a GDXJ up 80 90%. What what what why was that? And it was really that the organization hadn't been able to deliver into expectations. So if you look at the marriage that comes from right, we bring some human capital into an asset base with some assets. They bring a bigger asset base together. We end up with a great product that has significant opportunity to create share shareholder value through cash flow but also organic growth and we have a combined team that's much stronger than the parts. >> And that combined team is Equinox 2.0 which we're going to talk about. >> I'd love to pull in a thread though. Why do you think it was that Equinox was unable to meet expectations over the last few years? Gold prices were rallying, a lot of the best-in-class miners were rallying alongside that. GDXJ up, uh, legendary management at Equinox, uh, one of the most successful mining entrepreneurs that's ever lived. What was the issue, Darren? >> Yeah. No, and it's again, if we measure the success by share price appreciation because ultimately that's the reason we exist, right? Why does any company exist? We're a financial instrument to create shareholder value through share price share price appreciation. That's the reason we exist. That is the measure and we hadn't as equinox. Why hadn't we? Because we created expectations that hadn't delivered into and there had been a rapid series of M&A over that five year particularly the last 5year period and there hadn't really been the focus on execution delivery against those expectations. So there was a gap in the portfolio and that's what Ross recognized when we first started discussions. It was like there was something that I could add to and complement the existing management team to be able to round out what was a good team into a great team. And so we end up with a much stronger portfolio of human capital that allows us to deliver into and that's where they really struggle right was about how do you and you know I'm not an M&A guy that's not my space right my space is really about creating realistic expectations having the organization align behind delivering into those and then deliver into those expectations and that's where I see the value creation the value creation is delivering on the dream Ross is about creating the dreamm So we're we're a good partnership in that space. >> Yeah. Okay. Was there any resistance to this transaction from either shareholder base at Equinox or at Caliber? >> Yeah, there was. And and there wasn't one side more than the other, >> right? >> It was an equal level of which to me then sounds that that's like a perfect situation if you had an equal level of disgruntled shareholders on both sides of the equation, right? It wasn't that, you know, most of the Caliber shareholders or most of the Equinox. It was a small portion of both cuz what was Caliber shareholders concerned about? Well, we were poised for a reate opportunity. We we we struck the transaction at just over $3 on an impacted price today, uninfected price today. We're at $440. So, we've realized that value that they were concerned about us not surfacing by getting together with Equinox. Why Equinox shareholders, the ones that did have resistance to were further dilution, >> right? because you hadn't seen that share price appreciation now issuing more stock which is then dilutive why well we look at the recent performance of the the equity we've done really really well right so I think that the concerns that existed on both sides of the leisure have evaporated pretty quickly which is again a sign of that it was a good transaction and going into it like I say there was an equal level of concern from a small portion of so to me it I I I think what we've got to was as close as you could imagine as a perfect transaction. >> Okay. Okay. So, just to unpack that a little bit on the Caliber side, if there was resistance, it was maybe shareholders who had uh been along for the ride, they now feel like um Caliber success was meeting the right market and they were about to get rewarded for that. Right? Nicaragua was producing over 200,000 ounces per year. Valentine was coming soon. That's another 200,000 ounces. Why would we change the model now? Right? We've done everything right and now the market's arrived to us. >> Yeah. We've gone through the pain of building an asset in Valentine, a Valentine asset in Newf Finland. >> We're now on the cusp of realizing that opportunity in terms of production. >> Totally. >> And now you want to get that. It's like we're close to why do it now? Well, because you can't time M&A. We see a great opportunity with with with Equinox >> and >> it's like why now? And then it's like with who? Equinox is underperformed, right? Underperformed expectations. So it's then educating the caliber shareholders as to why and what we can add. >> And then that's pretty quickly what we've been able to do through the entire base is come out and the first step in this whole transaction was to recalibrate expectations about what 2025 looks like. >> Yeah. >> And then deliver into which then starts to reframe the product, right? which then stops the doubting about the individual assets. We have a great portfolio of assets and the different assets at different jurisdictions at different levels of their life but it's a great portfolio. So it's like the focus on delivering into those expectations. So step one was to reframe what to expect from the product. >> Yeah. >> Then deliver into which we did with Q2. We've continued to in Q3. We'll have another positive performance in in Q3 actuals when we come out. Acts of God notwithstanding between now and the end of the quarter things are shaping up quite well. >> Mhm. >> There was a perception of Equinox is it was an M&A focus growth >> company. Yeah. And what we're focused on is surfacing shareholder value through quality, not quantity. And there's assets within our portfolio that can surface more value for our shareholders in someone else's hands. And we demonstrated that with a recent um transaction on PAN and disposing of that asset which will close here at the end of September. >> Yeah. >> Right. So you it's like all of a sudden it's creating a little positive confusion within the market. You had Caliber which was a deliverer of you had Equinox which was an M&A. you're putting this together and you can create a lot of value out of this portfolio of assets, right, with the right human capital in place. >> Yeah. And that that is a Okay. So, I and I appreciate how you juxtapose those two. Not to say that because caliber was focused on quality over quantity that Equinox wasn't. I that's not what you're saying, but there is a bit of a distinction there in that caliber model. Very specific. Right. And now when you say we, I've got to like Ky we caliber know we Equinox 2.0 right now. You jumped into the CEOC. This is your company now. You're running this uh much bigger portfolio, nine producing assets right now in Equinox 2.0. >> Yep. >> And are you okay? Actually, before I get to that, I want to ask you one more question about the transaction itself because a lot can go wrong when two companies merge like this in the mining sector and very often shareholder expectations are not met at least in the near term. Now, that hasn't been the case for you. So, we can talk about bit of shareholder resistance on the caliber side. we're in this fastmoving car. Why would we jump in bed with this lagard? And on the equinox side, why would we dilute right now? Right? Uh but the market is the um inevitable truth teller and the market is telling us they love this transaction and you're being rewarded for it. Um what are the most common reasons however that transactions don't meet investor expectations and what did you do differently? >> Yeah, and I think it probably comes back to the genesis of where this comes from as well. If we think about how did this acquisition come? This wasn't a process. This was a conversation that was had between Blaine Johnson, right, and Ross Bey a year ago that was like, "Hey, you're doing something. We're doing something. How could this be something that's better together?" And it kind of evolved organically. Yeah. And then when I started conversations with Ross, which was probably September of last year, >> it was like that was the first time I'd met Ross, but we spent some time together and it's just like, >> "Right, let's have a conversation." Mhm. >> And I think that was we had a common focus for what frustrated Ross, right, is is that Ross wanted to create shareholder value. He had all the bits but hadn't been able to. So having a discussion with myself and Blaine and Doug, Ryan then demonstrated, hold on, if I add this into my product, I'm going to end up with a stronger product. We have a portfolio of assets that we can surface more value from from our existing shareholder base and the Equinox shareholder, right? So, it was a bit of a perfect marriage, right? It wasn't a forced marriage. It was just like, hold on, this makes sense >> because because Equinox had underperformed because Caliber was on the verge of putting these things together, you know, with a much stronger product. I think that was kind of the genesis of and you've never heard anyone talk about synergies as a consequence of the transaction as well, >> right? You know, and we've talked about this before. We talked about it when we did the marathon transaction for Valentine is that I despise the word synergies >> because it's typically what I found in my 40 years of history is it's a word that people use to justify why they did the transaction. >> And you can never synergize your way to success, >> right? You got to look at it and you say what is the potential for that asset right what can that asset generate and then you say okay how do we then surface that and we surface that by ensuring that our organizations understand what it is we want to deliver and they're enabled and empowered to be able to deliver into that if you want to call that the synergy that's great but if you're talking about an M&A savings there's never enough GNA savings from an M&A to be able to warrant the justify the the costs associated with the transaction Yes. Okay. Right. >> Okay. >> And because you do get into that growth for growth's sake, but there's an opportunity that's created with the opportunity to grow, but you got to deliver into the expectations. >> Yes. >> Right. And a lot of organizations fall into the trap that the value is created on the promise. In my simple mind, the value is created on the delivery into the expectation. So, underell the expectation, deliver into it. And I think you'll surface a lot more value. >> Yeah. And >> because again, if I can come in and I can talk to you about a product that's going to produce, take a greenstone for example. >> Yeah. It's your Ontario asset. >> Ontario asset, right? If I look at that and it's going to produce 300,000 ounces a year, just say at a $1,500 margin, I say, is that attractive to you? Yes, it is. So, if I can explain what that asset looks like and I don't have to come out and say, "Well, it could be 350,000 ounces at $1,250 an ounce, right? If I have to entice you to invest into it, then there's probably more disappointment that can be had than positivity." If you can look at the asset in a kind of a more conservative view and say, "Yeah, that's an asset I want to be in." And then we overperform, there's more value to be created. If we have to torture the asset to confess an answer that you want to see, there's probably too much risk in that delivery. Yeah. >> And then you got to really assess as to whether you really want to be in that asset base, whether your risk tolerance is. Right. what we I think in my simple mind the value is about demonstrating operational excellence delivering to those expectations because you're as a my my issue as an investor is is that is deployment of capital right when I look at this and I'll step back take a breath and step back if I look at caliber coming into Equinox I looked at as an investor I have three quarters of my net worth invested in this So what you're interested in truly fascinates me because I'm aligned with. So I looked at it and said, how can I create value for our shareholders because that's creating value for me. And I look at those assets and I say with the right management in place and the right focus, we can surface more value out of that from a share price perspective. That's the value and that's the way I look at it. I take that view that it's it's you know the next 12 months, 18 months, 2 years. It's not the next quarter by quarter. >> Yes. >> But I'll create the opportunity out the next 18 months by delivering in quarter by quarter expectations. Look at Caliber, right? Caliber, we're in we're an operator for what 22 23 quarters and all but one quarter we delivered into expectations. >> Mhm. That's an amazing track record, right? by the way. >> And when we look at what that meant when we created that opportunity at the end of 2019 when we partnered with B2 Gold at 60. >> Yeah. >> Right. To raise the capital to purchase the Nicodagan assets and then vended them into Equinox just here a few months back at north of $3. That's a that's a healthy return. >> Yeah. Yeah. That's fascinating. And 22 out of 23 quarters. Correct. >> Right. Um Okay. is a couple different directions I want to go here and first actually one more question on you mentioned you met Ross September of last year that was about 12 months ago >> I have two questions out of that when did you and I it sounds like you inspired this conversation right maybe you instigated the initial conversations of the merger >> no it was really sitting with with uh Blaine Johnson >> yes >> and Ross that's the genesis of >> that's the genesis of >> right it was the two chairmans coming together and going, "Okay, >> we're aligned in the same thing. We want to create shareholder aid. >> How do we do that? >> Could these two things be >> Yeah. >> And one of the things that clicked pretty quickly is we have an asset base, but we need to get that right portfolio of human capital together to surface it." >> Yeah. So then it became pretty important as given that I have a little DNA in caliber that how was I going to blend with Ross and the team at Equinox to be able to create a product that can deliver into those expectations. Ross was looking for a solution. His his issue he'd put together these bits but >> they hadn't quite delivered into what was expected and that's why the share price was lagging. >> Yeah. >> So then we need to have the conversation about how do we think we'd interact. It's about the chemistry. So, we have each other's back. If you're looking for a a steward or a statesman, as you kind of foreshadowed earlier, you know, how could you not want a guy that looks like Ross Bey? >> Sure. >> Right. What a great person to have. >> Right. What was his single largest frustration is that we hadn't yet surfaced the value. >> Yeah. >> What can I do? How does it look? Well, Darren, could could that be part of the solution? So, that's where we looked at the 1 plus 1 equals 3. It was like how do we blend these two organizations together and you know we look at the change that's happened and if we think about from an operating perspective there's been no changes in people at an operating level as a consequence of the transaction. >> Okay. If we think of from a corporate perspective, we're talking about between both organizations, there's four people who today were employees of Caliber or Equinox 6 months ago that aren't today. >> Okay. >> That's an insignificant amount of change. >> Yeah. >> And you look at that, you go, so there's a huge and great human capital components about now aligning that behind. Right. Again, we had two CEOs, we need one. Right. So, there's some obvious things. >> Mhm. >> Right. We had two HR leads, we needed one. That's the level of change when I'm talking about the four people. Otherwise, everyone else is. So, now we have this human capital. We said, how do we align that human capital behind creating shareholder value? So, that's what Ross and I and the board have been working with the leadership teams is that our reason to exist is to create shareholder value. >> Yeah. >> Right. Through share price appreciation. What is it? It's not to produce a mean ounces a year, right? That's a means to an end. Our means to an end is to ensure that every person in our organization is aligned behind our vision of creating a 20 billion company. >> There it is >> right at a $30 share price. >> Yes. >> Is it reasonable to expect? And we can I can go through and we can talk about the comps and do a comparison with respect to half a million an ounces out of Canada and do the comps with respect to Alamos and TW times the market cap and the other half of me ounces which I'm happy to talk about. But it's reasonable to expect that over the next couple of years that we could be a $30 share price. So what do we want people to do? We want everyone to be aligned behind that $30 share price and then create a little bit of positive confusion. People go, "Well, I don't really impact anything." I said, 'You do because if your role doesn't impact our ability to deliver, by definition, the role shouldn't exist. >> Mhm. >> If you're in a role that doesn't add value, then we need to repurpose that human capital. >> Yeah. >> To be able to align it behind >> because people get confused. They look at it and they go, "Well, how do I impact?" >> Well, if you're in a fly and fly out site, you're only a bad meal >> or a misflight away from chaos. >> Right. >> Right. So the person who's feeding you, right, and the catering contractor is a critical part of that puzzle, right? And people say, well, if it's it's a lower level position. Yeah, it is, but it's critical. It takes the the village of people aligned behind and it's having everyone understanding how they contribute to. >> It's not talked about often enough in this business. what you're seeing right now is that like very focused um you know solid entrepreneurship. You're looking at everybody on the team and making sure they're clear on how they're contributing to the northstar. In this case it's the $20 billion valuation >> at a $30 share price. >> At a $30 share price. Yeah. Yeah. And that's clutch because as we know it doesn't always work out that way, right? You can quintuple your market cap and the share price sometimes doesn't move, right? If you've been a bit too free and loose with your issuance. Um, and you also mentioned 75% of your net worth tied up in the company. And I I kind of like sat with that statement for a while. I loved hearing it because your livelihood is so tied to the success or failure of this endeavor, right? You're on the bus fully. It's very important. >> No, abs. Absolutely. And and it's because, you know, I don't spend a lot of time looking at markets, looking at other investments. I don't have enough time. >> Yeah. My reason for being is to be able to surface shareholder value. That's why they pay me what they pay me to do that. And if I'm distracted by anything outside of that, >> then it's destructive to my shareholders. >> Okay? >> And >> I got to be unrelenting and looking for opportunities, too. That's why I don't get distracted by I don't invest in any other products. Not because I don't like them. It's because that's not my role. My reason for being is to do this and I'll back my own product. >> Okay. Okay. So what I want to hear from you now is you mentioned the refreshed Equinox 2.0 vision, right? And what's what's different right now? What what's the highlight, Darren? >> Yeah. No, I think what it is is getting that organizational capacity of align behind that north star because everyone comes to work every day wanting to do a good job. Their jobs are important to them and they want to go home rewarded for a day's work and be associated with something that's good. And if we get those hearts and minds and souls behind the product and they're making they're thinking and making decisions like owners, we're going to end up with a really great product. So that is the premier sort of everything's subordinate to that. And then we say, okay, now what's our portfolio of assets? So if I can get those people in thinking about what those assets are, they look at everything a little differently. they can bring us lots of good ideas and then we can then make decisions together about what is the right approach to be able to surface value because people are under the misconception that Darren's going to come in and fix things. >> Sure. Right. It's like no, all I'm going to do is provide the opportunity and the environment that allows for things to be fixed. And I do that by ensuring the organization is engaged raising issues and we address things. >> Right? Cuz the people who are running the business understand the business much better than I do. >> What's your That's a great question. What is your core purpose if you were to distill that as simply as possible as the CEO of Equinox Gold >> is to ensure that the vision of where we want to get is clear and then be a resource to the rest of the organization to remove the obstacles that get in the way of them delivering into that. That's my only reason. >> Yeah. >> It's not to make decisions. If it needs to come to me, I will. But the the intensity is is that is the decision should be made as lower level in the organization as they possibly can because arguably they're the best people who are informed and capable of being able to make those decisions. My role vision and enabling that decision- making and removing ambiguity for the business. The single largest cancer in any organization is ambiguity. Not knowing where% and why. >> 100%. You echoed something that a mentor shared with me like 10 years ago u when I was trying to learn how to be a CEO of our organization and effectively they said look you're you have one job. It's to find the best possible people on the planet and then get out of their way right and if you can do the first part right the second part takes care of itself. It's obviously a massive simplification, right? There's more moving parts and complexity and risk and things to think about, but the spirit is the same and that's effectively what you shared. Set the vision, make sure the people are aligned behind it. Then your job is to clear the obstacles, make sure the trail is clear, right? >> Yep. >> Is to remove the ambiguity and ensure that they're adequately resourced to be able to deliver into those expectations. >> Yeah. >> And that starts with fundamental things like clarity and roles and responsibilities. >> Yeah. ensuring that accountabilities are clear. >> Yeah. >> And then ensuring that the appropriate levels of authority are delegated so you can hold them to account. >> Okay. >> Cuz you know the other thing I see is within organizations is people confuse responsibility and accountability. >> Yeah. >> And effectively they're very similar except accountability has a consequence. >> You know we operate in Brazil, we operate in >> Nicaragua countries, right? in Mexico. >> Now, a little known fact is that in Spanish and Portuguese there is no word for accountability. Doesn't exist. This responsibility that >> okay, >> right? There is no accountability. Right? So even those Latin countries or Latin language which is a genesis of English, it doesn't exist. So you got to make it clear what is the difference because people people use them interchangeably. The difference between responsibility and accountability is consequence. It doesn't mean it's negative. It doesn't have to be weaponized. It's a positive thing. There's a positive result. Let's reward it. Let's take a moment, respect the past, right? How do we get here? Let's embrace the present. >> Mhm. >> But let's spend most of the time shaping the future. And we create that environment. And you'll find that people will take the hill. They really, really will. And if you can get that organization line, that's why we've seen we've seen pretty quickly >> some changes even with an Equinox 1.0 and some of the assets. >> Greenstone, we've added a little resource out there to help from a human capital perspective and a little bit of equipment, >> but really what is is creating the environment that allows for those people to take intelligent risks and deliver into expectations. And also that if we need to reframe the product, let's reframe the product. Nothing breeds success like success. So if you're always trying to defend why you didn't deliver into it creates a pretty costic sort of environment. But if we can allow some people to have some success, it'll create that ground swell. That's why critical part of our success in reframing the product was to reset expectations from a guidance perspective. Mhm. >> And we're starting to see people instead of looking at their shoes starting to be a little bit more upright. >> 100%. 100%. >> Right. And it's like so then they're starting to and they'll make mistakes and that's okay. >> Yeah. >> You know, I have I have a term in our in our organization. It's not about making the right decision. It's just making the least wrong decision we can. >> Yes. >> Because we'll make a decision today and in a month from now the decision we made may be different because the environment's changed and you need to adapt to the environment. doesn't mean you need to forgo what you thought was the goal. Yes. >> But if the environment doesn't allow you to or there's an opportunity to do better or less than what you said, you need to adjust to to make sure that people can feel good about what they're doing to deliver into. >> Okay. I want to talk to one of your people cuz I noticed today you brought in Ryan King who last time you and I chatted when it was Caliber, right after the marathon transaction, I spoke with both of you. >> Yes. >> Uh Ryan's a vice president at Equinox Gold. Can I bring him in? Can we chat? >> Yeah, absolutely. Absolutely. >> All right, let's get Ryan in here, guys. >> Ryan, you want to sit down? >> I'll sit down. >> I'd love to chat with you, man. Come on. >> Good luck. >> Big big, man. Take care. >> All right. Have a seat. >> Okay. Um, it was super fun just jamming with Darren uh because he's such a visionary. I find I actually like find myself very inspired as an entrepreneur when I chat with him. You know, it's uh and he's the guy to um facilitate the merging of cultures between these two organizations. Um you didn't have to stay, Ryan, but you're you're here, right? You're with Equinox Gold clearly for the long haul. Now, I want to break down the value as you see it because the investors are going to be asking that question, right? Where, you know, bit of upside after the transaction? Has the train already left the station? What's in the future for me? Right. Now, obviously there's something in the future for you, but you wouldn't have taken the seat. >> So, I felt it' be a good time in the conversation to swap out Darren, bring in you. >> I want to walk through the assets. I want to walk through in a bit more detail the refresh 2025 vision from a production standpoint and um and what's got let's just start there like how do you feel about this transaction? Why do you stick around? What's the upside for you? >> Yeah, I mean it's a a really good question. And I think Darren also pointed out the amount of equity that he owns in this business. So this isn't just about a, you know, a salary and a job. This is a big portion of our net worth, right? And being involved in the direction of which way that goes is important particularly to me and I know it is for Darren. For me, I mean, I I again, this is probably close to over 75, maybe 80 plus percent of my personal network. >> This one company. >> I love that. >> Um, and it's it's obviously it's a big number. >> Yeah, I was going to say, is that scary? >> Um, for me, and it's it's it is it it drives a level of behavior as an owner in the business to be focused and diligent, but also uh ethical and transparent about how we do things. But um that's really the driving force behind this is that not only do I see an opportunity in the gold sector as a whole because I do believe that we'll likely see higher gold prices, but also the unlocking of value within this portfolio now today with the with the leadership that's in place with the experience and the expertise to unlock and deliver this portfolio now. And I think this has kind of been holding back Equinox a little bit. And now with Darren, Dave, and others that have had tremendous years of experience in operations in big, you know, maybe it's lower grade, but big large open pit assets to be able to unlock that and also but look at the assets from a different perspective. Maybe there's a different opportunity. Maybe there's a different way to do it that could unlock that value. And I think that's really important. So that's kind of what drives me. Also learning from Darren, Dave, and other people in the business >> is also a driving force for me. >> Can we I want to unpack that uh unlock concept a little bit and get a little bit granular. We can get to the assets, but maybe it's better to start with the portfolio, right? Because if if I look at it today, there's nine producing assets in Equinox 2.0 portfolio. And um you know the the highlight reel would probably be Nicaragua producing 220 to 240,000 ounces per year thereabouts. Obviously Greenstone in Ontario and the soon to be in production Valentine in Newf Finland. And then there's a handful of assets that are producing less than 100,000 ounces per year. Now fresh set of eyes on that portfolio. Do you like what you see? Do you expect to be making any adjustments? Right. And if so, what can you speak to? >> If we look over the last 10 years as Equinox 1.0, I know they've done a great job of assembling a large portfolio and I believe that the complement of the addition of caliber is is uh pretty significant. Right now during this period of time we're in a interesting inflection point. Put the gold price aside but we look at the portfolio. We're going from more of a Central America, South America portfolio tearing up in terms of jurisdiction. So when we look at those types of companies in tier one jurisdictions, they trade at a premium versus companies that trade in non-tier one jurisdictional uh locations. >> So we're in the process of going from >> I don't know exactly what percentage but probably north of 60 maybe 65% of our net asset value tearing up in terms of its jurisdiction to Canada to the United States etc. So I think that's an that's an inflection point that investors will be watching. >> Yes, >> institutional investors, analysts are watching obviously various various forms of family offices and retail. But um so that allows us now to sit back obviously not sit back and just you know rely on that but also look at the whole portfolio and say what else could then shift the narrative and the value. So could a Central American asset suite like a Nicaragua or a South American asset suite like Brazil be better off in someone else's hands in someone else's portfolio? >> Sure. >> Right. So driving that sort of more North American centric uh asset base could it be could be potentially. Um so you're always looking at the portfolio to see what is the right mix. what could add value for our existing shareholders by maybe not owning an asset whether it be because it doesn't have a huge mine life whether it be because it has a higher cost profile what whatever the reason maybe there's an opportunity there so we're always looking at that and I think now is the time where we're probably more looking at the divevestature angle >> yes >> as we've recently announced the divevestature of our smaller pan asset in the portfolio a great asset an enduring great location >> but smaller in the portfolio of the company now as we're a you know call it a million ounce a year roughly portfolio a producer. >> So what was the pan production? >> Yeah 30 to 35,000 ounces a year. >> Yeah >> annually. Yeah that's right. So, so a smaller uh producing asset in the portfolio, but nonetheless it was a contributor, but uh that that just shows an opportunity and maybe the the thinking is changing a little bit in terms of um the strategy for Equinox. It's not just about growth, but it's about looking at the portfolio and what is going to drive share price performance. You know, that's a key for us is looking at all the share price uh per share metrics to drive that valuation. And so you look at the, you know, we've been investing capital into Valentine, uh, Equinox 1.0 has been investing capital into Greenstone in Ontario. So Greenstone in Ontario, Valentine and Newfoundland. What's also interesting is that we're at this inflection point where that capital investment is now going to slow down and we should start to harvest yes the results of that time and that effort into unlocking the value of those portfolios. So in a cash harvest and then allowing us to delever the balance sheet as we've you know put that put those uh tools in place to be able to build those. >> So that's the season right now for Equinox, right? Both companies have been growing aggressively, applying different strategies, allocating capital into future productivity. And now it's time with this marriage to reflect on the company as a whole and cleanse it a little bit and say, are we okay, we've got a lot going on. We got a lot of assets. We're in five countries. We got things happening in Newf Finland and Ontario. Are we the absolute best million ounce producer that we could be? And let's be that now and then probably look at growth again in the future. And and you also have to then look and reflect what does make a top quartortile valued gold producer. What makes that? And when we've done some of our analysis, it's the tier one jurisdiction. It's a >> an Australia, it's in North America, key jurisdictions like that. >> It's a high quality, high margin asset. >> And then it's really likely the team that is able to deliver on those assets. Yeah. So when we look at we've been tearing up in terms of the quality of the assets, the jurisdiction of the assets and now we have the team to deliver these assets. So we're right at that point in time now where it's like okay you've done all the investments, you've assembled the team, you've got it here together now, now let's see what can be done with this portfolio and what else could be divested of. >> So okay, I like I like how you did that. You kind of outlined the three points. You got to have the tier one jurisdiction. You know, it is more important now than ever to investors and I think for good reason. And you and I both know many investors who um aren't concerned about jurisdiction. They're just concerned about asset. And they say, "Look, the political risk in Canada is just different from the political risk in Niger, right? They both have risk. It's just different, right? You could be stuck in a coup or you could be stuck in policy uh and permitting." Um but you know I think what you said is absolutely true and reflected in the share price of the companies which is what you got to pay attention to right and so we're upgrading the tier 65% of the asset base now in tier one jurisdictions so you feel like you're ticking that box. Um, jumping down to point three, the leadership. I just have to agree with you based on the track record of both yourself, not just with caliber, but with new market prior to, uh, Darren, of course, who I just spoke to, and then you're marrying the team at Equinox, led by Ross Bey, the broken slot machine in the mining sector. 14 companies under his belt. All 14 have been 10baggers. That's remarkable. And this is his swan song. So, I know he wants to go out with a bang, but talk to me about point two there. upgrading the quality of the asset base. So we're talking about margin. So where should people pay attention here? What justifies that point? >> So when we look at taring up in terms of the asset quality, if we look at the portfolio, there are assets that are mature. They've been around a long time. Um they were originally built on what was the resource or the reserve and over time they've had depletion. They've had costs go up. So now we look at the quality of a greenstone in northern Ontario or Valentine in central region of of Newfoundland. What what I'm excited about here >> is um the fact that they're new assets. So there's long lives in front of them. >> Yes. >> I think that's really important as a probably also to into the mix of the the quality is the where they are in the cycle of their life. >> Yeah. Yeah. 100%. >> So brand new and based on reserves, we know that there's decades in front of them. Okay, >> we also look at, you know, something like a greenstone. It it has had expiration, but there's a 100 kilometer belt where there hasn't had a huge amount of green fields type exploration. And we look at Valentine. Valentine itself is a brand new mine, but it's a a green fields project, meaning there's never been past production there in the past. Mhm. >> Meaning that um also at the same time there's been probably a fair fairly limited amount of exploration along this multicometer big fractured fault going through this property. Meaning that there could be an opportunity where there could be a lot more gold there. And in fact, I go back to uh 2024. Caliber acquired the asset, closed the deal of Marathon Gold in January. By the end of the year, we had already discovered a new zone within that property about a kilometer south of a of a known resource. So what what we always look for what adds share price performance is those three critical things that we talked about, but also finding new >> expansion >> expansion of the resources. >> And we're in some fantastic areas where there could be tremendous amount of upside. And I think back to to to the times at at caliber or even new market and what drove the share price performance was yes the gold price was robust and increasing at the time but the biggest value driver in my view was delivering on the operations and finding new >> finding new resources discovering areas right >> even within an operating portfolio it has a tremendous impact. >> Yes. Yes. And that is kind of an addition to the Equinox culture that wasn't super present for the last few years. Not to say Ross hasn't demonstrated that with previous companies, but the Equinox model was the buy and build. And so we're bringing this uh culture to marry that, right, which is the uh learn and expand present assets and find out what else is under there. And I remember like we were chatting maybe a year ago last time we had you and Darren in the studio and you're like Darren always says at the end of the day uh when you're in the pit you're minding the resource not the reserve right you keep going as long as the rock's there right >> um so so uh at a high level Ryan uh somebody who's looking at this today and I actually want to ask you have you guys become super clear internally has the grand vision for Equinox changed and are you clear on that yet or is there still some integration and learning that you want to do first. >> It's only been a couple months. >> Yeah. >> Right. It's only been a couple months. So, >> it's happening quickly. Okay. >> The vision is happening quickly. I mean, Darren's done a tremendous job of >> pulling the board together and then leading the organization to the north star, which is that multi-billion 20 billion plus company. >> There it is. >> Based on share price appreciation, not on going out and acquiring and diluting the shares further. Um, so I think people are getting a little bit more excited. >> They're getting a little bit more confident. >> So that actually helps drive the organization to being a little bit more confident about everything they're doing on on a daily basis. Yeah. >> Which I think >> well they should be right because if you had any apprehension on either team after the merger, you can look at the market response and have conviction that like this was the right decision. Let's go. I mean, yes, but at the same time, we've had, you know, some wins in the gold price in the in the short in the short term. But >> to your point, I think yes, because people are starting to get >> even in a period of a short, you know, what has it been 2 3 months, >> we've gone through a reset of expectations from a production and cost perspective. And then for the first quarter of that postreset expectations, we delivered into that. >> Yeah. and we foreshadowed what what is expected to come in the future. So there's that little bit level of buoyancy in the market going, "Hey, wait a second. This was a tremendously undervalued equity." When you put the two together, it looks like there's an opportunity here. And to your point, I mean, the market is starting to see >> Okay, that's that there's an opportunity here. >> Yes. >> And we are seeing a shared price um react as a consequence of what we've done. >> Okay. So, I feel like we covered some of the smaller assets in enough detail. You're looking critically at them. you're keeping the best. You might make some decisions with some of them. We'll wait and see on that one. There might be some divesting, but we'll wait and see. The three big assets, uh, the one I want to ask you about now is Valentine. That's the next to come online. So, just walk the audience through the timeline, what they can expect to come out of your Newfoundland Valentine asset, which is forecasted to do over 200,000 ounces per year. >> Yeah. Yeah. So where we sit today, um we just recently put out some news on first ore through the plant. So ore is now going through the plant. Um we've got a tremendous team in place there that has uh experience uh commissioning plants, commissioning mines. >> Um we've got we've got people that have operated mines all around the world, whether that be a a a process plant manager, mine manager, uh overall site manager in Jason's here. We've got a great team in place that that we'll be able to manage through the process of a ramp up. So, you know, a ramp up is not an easy process. You're turning a let's call it a billion dollar plant to produce metal. >> Yeah. >> So, there's always going to be things that come up along the way and there have been some of those already that they've been able to react quickly to and then, you know, make short-term or even medium long-term fixes within the plant. So they're they're and they've already been able to anticipate what could be some of those issues that have come up and got in front of it so that there's not those issues. Right? >> So that ramp up process we we've told the market we would expect to be at the name plate capacity. Now keeping in mind that original feasibility study name plate was going to be about 2 1.5 million tons of throughput through that plant a year which would result in a life of mine or the first 12 years of a life of mine reserve life of mine average of about 200,000 ounces a year. Okay. >> Okay. So that's that's so we would expect to be at that name plate by say the end of Q1 maybe sometime in Q1 of next year if all goes well. Okay. >> But uh I think it's worthwhile pointing out as well that when Caliber first did a capital cost update, we also included some additional tankage in that update which could allow for the plant to maybe go to 3 million tons of throughput. So there is that potential flexibility to go a little bit to push the plant a little bit beyond the 2.5 million ton original throughput. So let's see how that goes. that could be, you know, maybe uh a little bit of an opportunity for the company to see to maybe realize that that upside. So, walking through that ramp up, getting us to name plate, let's call it uh let's say we we get it there by the end of Q1 of next year, you're looking at about 150 to 175,000 ounces in that $1,300 to $1,500 range. We haven't given any guidance for that, but that's probably where we're going to end up. Um, as part of this process, there is a phase 2 that was in the feasibility study that would take the mill from 2.5 million tons from the original, you know, technical report to 4 million tons. >> Okay. >> Um, so Darren and the technical team have also been looking at, well, is there any opportunity to maybe push that tonnage even further, >> right? And so there there there's been a bunch of technical studies and analysis done now where it is likely to be able to push it further, but we're just obviously monitoring and watching how this first ramp up goes and then we'll start providing the market with some additional clarity. >> So I believe that we're actually I mean and again when we compare this against a Greenstone, it's smaller. >> It's not as a complex plant as a Greenstone plant. So we would anticipate that we should be pretty effective uh in ramping this this this operation up getting it to its name plate capacity. >> We are in the process of of doing quite a bit of exploration work across the property. So let's see how that unfolds as well. Um and you know I think in the beginning here I said that this is a 12 year of a 14-year mine life. I want to be careful with that because it's a 12 the first 12 years is about 200,000 ounces out of a 14-year reserve life as it was based on the feasibility study. >> And you made the comment, you know, when Darren's out there, he's mining to the resource. >> Yes. >> This is a five plus million ounce in all categories. So 4 million ounces measured and indicated another million ounces of inferred um and plus we haven't even talked about you know some of the some of the drilling that's happened outside of that that could lead to additional mine life. I would anticipate we're here for quite a lot longer than what that kind of snapshot in time feasibility study looked at. So that's why I'm excited about Valentine. I would expect the same out of greenstone as well. >> Okay. >> Um as we continue to invest in these assets. So, we're going to be generating a significant amount of operating cash flow, >> right? If we stepped back and we said, let's call it a million ounces of gold a year. This isn't official guidance, but let's just say that's, you know, when you put the big chunky bits together, it's around a million ounces. And let's say the let's just be very conservative here and say our our allin sustaining cost to produce those ounces of gold is somewhere around $1,800 to $1,900 an ounce. Let's just say that. Yeah, >> plus you've got some growth capital, plus you've got some other expenses. But say all in, it's somewhere around $2,300 an ounce. Just allin exploration, capex, financing expenses. Well, here we are today at at $3,500 an ounce gold. You're talking about 1.2 1.3 billion of operating cash flow. >> Mh. >> So, a tremendous amount of cash flow generation. as we just talked about that significant investment into the portfolio is now going to really start reaping the benefits. >> Yes. Okay. Yeah. I like how you colored that. So for people who are looking at this story now, I think and they're looking forward for future news flow. Every investor, what they really want to know is what's going to make the share price go up, right? What have you done for me lately? Absolutely. >> Um and what they can look forward to is kind of like I'd tell them to look three different directions right now. Um, pay attention to the smaller assets because there might be some decisions made there. There might not be, but it's something under consideration with the team as we talked about. Uh, pay attention to Valentine in Newfoundland because we're still exploring. We're still hoping to expand and that should be uh hitting name plate production by Q1. And so that's the metric, the milestone that we should look for. And we're still investing in Greenstone in Ontario. Same thing. And so it seems like it's a season of of um do less but better at Equinox 2.0, right? You're focusing on what you have. You're refining what you're doing and you're cleansing the operation if necessary, but getting really good at delivering on that million-doll ounce um uh I don't want to say promise, but that's the that's the hope, right? That's the expectation. >> Well, that's the that's the goal now with this portfolio. It's not necessarily the goal. I should say that's where we're at with this portfolio. Yeah. It may be 800,000 ounces. Sure. And it may be u a tiered up in terms of jurisdiction, whatever. It's not necessarily the ounce number. It's more about the quality and where and and what could drive that share price performance. So, we're always looking at that. >> Yeah. Okay. And you know, as a consequence of that, we're looking to harvest, right? And that harvesting for you right now at your uh you know 2,300 estimate cost of production, you're all in um at today's gold prices equates to 1.2 1.3 billion of cash flow per year. >> Yeah. >> Yeah. Okay, >> Ryan, it's exciting time to be uh to be an Equinox shareholder. Man, I >> I I think so. And you you started off the conversation by asking me why I'm here. And so it's these types of things right at the crux of these inflection points that I think and so so it's twofold. It's the business that it's coming into its own to realize and harvest this cash and then hopefully be in a position to return capital to shareholders in a short period of time, >> but it's also what's happening from a macro landscape as well with the gold price. >> Yeah. >> So it's the convergence of these two where I think man we could really see some share price performance uh over the next couple of years. And that's why I'm excited and that's why I have most of my net worth in the company. >> Yeah, dude. I like it. I love the team. I love the direction and it's been so good jumping into the vision with you. So, thanks for making the time. Uh, so great chatting with Darren as well. So, I wish you guys all the best and we'll be watching the story closely for sure. >> Excellent. Thanks very much, Dave. Appreciate it.
Why the Market is Loving the Equinox Gold and Caliber $1.8 Billion Merger
Summary
Transcript
How could you not want a guy that looked like Ross Bey? >> Sure. >> What a great person to have. >> Mhm. >> Right. What was his single largest frustration is if we hadn't yet surfaced the value. You had Caliber which was a deliverer of You had Equinox which was an M&A. You're putting this together and you can create a lot of value out of this portfolio of assets. This is J. Martin. >> Darren, it's so good to have you back in the studio, man. Good to see you. >> Yeah, appreciate it, Joe. It's been a while, but great to be back with you. >> It's been a while, and a few things have changed since the last time uh you and I sat down together. So, normally I like to begin these conversations getting your thoughts, unpacking the gold market a little bit, what you're paying attention to. Uh, today I just want to actually jump in to the recent transaction and then we're going to end up talking gold market anyways. So, we'll get there, but obviously the big news since the last time you were in front of my audience is the $1.8 billion merger between Caliber and Equinox Gold. And the reason I want to I want to headline this to begin our conversation is because investors should be paying attention to this. This is a new company with uh sights on a million ounces of production in the near-term vision. Um you've taken the helm as CEO. Uh you've been on my show many times talking about your previous company and the success with that organization. Ross Bey is staying on as chairman and Ross has been on my show talking about Equinox a few times. Um, and so this is like a great marriage of leadership and assets. I think 1 plus 1 becomes three. But I want to unpack it a little bit here. So let's begin with the why. Why did this transaction happen, Darren? >> Well, I guess it's it's there's two components to it. If you're looking at from a caliber perspective, you're looking at it from an equinox perspective. Right. As a caliber perspective, you know, we had a great reate opportunity with the birth of Valentine coming up, which we're seeing today. We've actually started processing or at Valentine in Newf Finland. We'll see first gold coming out later this month. So, we're in really good situation. So, but what next for Caliber? You know, we're an explorer backed by, you know, quarter million ounces a year of production. So, we saw good run rate, but how do we continue to grow shareholder value? So, we looked at Equinox and saw there's a great asset base, but there's something missing from Equinox. It hadn't developed the credibility in the market that the assets really should have should have seen. >> Sure. >> Right. And you know, Ross is a great steward of and Ross and Greg had done a great job over the previous decade of bolting those assets together, but it really hadn't surfaced value from those assets. So, we looked at it and thought, well, why had Equinox 1.0, you know, I'll call it, you know, performed basically flat for the last 3 years on a share price perspective when we'd seen a great run in gold. We'd seen a peer group from a GDXJ up 80 90%. What what what why was that? And it was really that the organization hadn't been able to deliver into expectations. So if you look at the marriage that comes from right, we bring some human capital into an asset base with some assets. They bring a bigger asset base together. We end up with a great product that has significant opportunity to create share shareholder value through cash flow but also organic growth and we have a combined team that's much stronger than the parts. >> And that combined team is Equinox 2.0 which we're going to talk about. >> I'd love to pull in a thread though. Why do you think it was that Equinox was unable to meet expectations over the last few years? Gold prices were rallying, a lot of the best-in-class miners were rallying alongside that. GDXJ up, uh, legendary management at Equinox, uh, one of the most successful mining entrepreneurs that's ever lived. What was the issue, Darren? >> Yeah. No, and it's again, if we measure the success by share price appreciation because ultimately that's the reason we exist, right? Why does any company exist? We're a financial instrument to create shareholder value through share price share price appreciation. That's the reason we exist. That is the measure and we hadn't as equinox. Why hadn't we? Because we created expectations that hadn't delivered into and there had been a rapid series of M&A over that five year particularly the last 5year period and there hadn't really been the focus on execution delivery against those expectations. So there was a gap in the portfolio and that's what Ross recognized when we first started discussions. It was like there was something that I could add to and complement the existing management team to be able to round out what was a good team into a great team. And so we end up with a much stronger portfolio of human capital that allows us to deliver into and that's where they really struggle right was about how do you and you know I'm not an M&A guy that's not my space right my space is really about creating realistic expectations having the organization align behind delivering into those and then deliver into those expectations and that's where I see the value creation the value creation is delivering on the dream Ross is about creating the dreamm So we're we're a good partnership in that space. >> Yeah. Okay. Was there any resistance to this transaction from either shareholder base at Equinox or at Caliber? >> Yeah, there was. And and there wasn't one side more than the other, >> right? >> It was an equal level of which to me then sounds that that's like a perfect situation if you had an equal level of disgruntled shareholders on both sides of the equation, right? It wasn't that, you know, most of the Caliber shareholders or most of the Equinox. It was a small portion of both cuz what was Caliber shareholders concerned about? Well, we were poised for a reate opportunity. We we we struck the transaction at just over $3 on an impacted price today, uninfected price today. We're at $440. So, we've realized that value that they were concerned about us not surfacing by getting together with Equinox. Why Equinox shareholders, the ones that did have resistance to were further dilution, >> right? because you hadn't seen that share price appreciation now issuing more stock which is then dilutive why well we look at the recent performance of the the equity we've done really really well right so I think that the concerns that existed on both sides of the leisure have evaporated pretty quickly which is again a sign of that it was a good transaction and going into it like I say there was an equal level of concern from a small portion of so to me it I I I think what we've got to was as close as you could imagine as a perfect transaction. >> Okay. Okay. So, just to unpack that a little bit on the Caliber side, if there was resistance, it was maybe shareholders who had uh been along for the ride, they now feel like um Caliber success was meeting the right market and they were about to get rewarded for that. Right? Nicaragua was producing over 200,000 ounces per year. Valentine was coming soon. That's another 200,000 ounces. Why would we change the model now? Right? We've done everything right and now the market's arrived to us. >> Yeah. We've gone through the pain of building an asset in Valentine, a Valentine asset in Newf Finland. >> We're now on the cusp of realizing that opportunity in terms of production. >> Totally. >> And now you want to get that. It's like we're close to why do it now? Well, because you can't time M&A. We see a great opportunity with with with Equinox >> and >> it's like why now? And then it's like with who? Equinox is underperformed, right? Underperformed expectations. So it's then educating the caliber shareholders as to why and what we can add. >> And then that's pretty quickly what we've been able to do through the entire base is come out and the first step in this whole transaction was to recalibrate expectations about what 2025 looks like. >> Yeah. >> And then deliver into which then starts to reframe the product, right? which then stops the doubting about the individual assets. We have a great portfolio of assets and the different assets at different jurisdictions at different levels of their life but it's a great portfolio. So it's like the focus on delivering into those expectations. So step one was to reframe what to expect from the product. >> Yeah. >> Then deliver into which we did with Q2. We've continued to in Q3. We'll have another positive performance in in Q3 actuals when we come out. Acts of God notwithstanding between now and the end of the quarter things are shaping up quite well. >> Mhm. >> There was a perception of Equinox is it was an M&A focus growth >> company. Yeah. And what we're focused on is surfacing shareholder value through quality, not quantity. And there's assets within our portfolio that can surface more value for our shareholders in someone else's hands. And we demonstrated that with a recent um transaction on PAN and disposing of that asset which will close here at the end of September. >> Yeah. >> Right. So you it's like all of a sudden it's creating a little positive confusion within the market. You had Caliber which was a deliverer of you had Equinox which was an M&A. you're putting this together and you can create a lot of value out of this portfolio of assets, right, with the right human capital in place. >> Yeah. And that that is a Okay. So, I and I appreciate how you juxtapose those two. Not to say that because caliber was focused on quality over quantity that Equinox wasn't. I that's not what you're saying, but there is a bit of a distinction there in that caliber model. Very specific. Right. And now when you say we, I've got to like Ky we caliber know we Equinox 2.0 right now. You jumped into the CEOC. This is your company now. You're running this uh much bigger portfolio, nine producing assets right now in Equinox 2.0. >> Yep. >> And are you okay? Actually, before I get to that, I want to ask you one more question about the transaction itself because a lot can go wrong when two companies merge like this in the mining sector and very often shareholder expectations are not met at least in the near term. Now, that hasn't been the case for you. So, we can talk about bit of shareholder resistance on the caliber side. we're in this fastmoving car. Why would we jump in bed with this lagard? And on the equinox side, why would we dilute right now? Right? Uh but the market is the um inevitable truth teller and the market is telling us they love this transaction and you're being rewarded for it. Um what are the most common reasons however that transactions don't meet investor expectations and what did you do differently? >> Yeah, and I think it probably comes back to the genesis of where this comes from as well. If we think about how did this acquisition come? This wasn't a process. This was a conversation that was had between Blaine Johnson, right, and Ross Bey a year ago that was like, "Hey, you're doing something. We're doing something. How could this be something that's better together?" And it kind of evolved organically. Yeah. And then when I started conversations with Ross, which was probably September of last year, >> it was like that was the first time I'd met Ross, but we spent some time together and it's just like, >> "Right, let's have a conversation." Mhm. >> And I think that was we had a common focus for what frustrated Ross, right, is is that Ross wanted to create shareholder value. He had all the bits but hadn't been able to. So having a discussion with myself and Blaine and Doug, Ryan then demonstrated, hold on, if I add this into my product, I'm going to end up with a stronger product. We have a portfolio of assets that we can surface more value from from our existing shareholder base and the Equinox shareholder, right? So, it was a bit of a perfect marriage, right? It wasn't a forced marriage. It was just like, hold on, this makes sense >> because because Equinox had underperformed because Caliber was on the verge of putting these things together, you know, with a much stronger product. I think that was kind of the genesis of and you've never heard anyone talk about synergies as a consequence of the transaction as well, >> right? You know, and we've talked about this before. We talked about it when we did the marathon transaction for Valentine is that I despise the word synergies >> because it's typically what I found in my 40 years of history is it's a word that people use to justify why they did the transaction. >> And you can never synergize your way to success, >> right? You got to look at it and you say what is the potential for that asset right what can that asset generate and then you say okay how do we then surface that and we surface that by ensuring that our organizations understand what it is we want to deliver and they're enabled and empowered to be able to deliver into that if you want to call that the synergy that's great but if you're talking about an M&A savings there's never enough GNA savings from an M&A to be able to warrant the justify the the costs associated with the transaction Yes. Okay. Right. >> Okay. >> And because you do get into that growth for growth's sake, but there's an opportunity that's created with the opportunity to grow, but you got to deliver into the expectations. >> Yes. >> Right. And a lot of organizations fall into the trap that the value is created on the promise. In my simple mind, the value is created on the delivery into the expectation. So, underell the expectation, deliver into it. And I think you'll surface a lot more value. >> Yeah. And >> because again, if I can come in and I can talk to you about a product that's going to produce, take a greenstone for example. >> Yeah. It's your Ontario asset. >> Ontario asset, right? If I look at that and it's going to produce 300,000 ounces a year, just say at a $1,500 margin, I say, is that attractive to you? Yes, it is. So, if I can explain what that asset looks like and I don't have to come out and say, "Well, it could be 350,000 ounces at $1,250 an ounce, right? If I have to entice you to invest into it, then there's probably more disappointment that can be had than positivity." If you can look at the asset in a kind of a more conservative view and say, "Yeah, that's an asset I want to be in." And then we overperform, there's more value to be created. If we have to torture the asset to confess an answer that you want to see, there's probably too much risk in that delivery. Yeah. >> And then you got to really assess as to whether you really want to be in that asset base, whether your risk tolerance is. Right. what we I think in my simple mind the value is about demonstrating operational excellence delivering to those expectations because you're as a my my issue as an investor is is that is deployment of capital right when I look at this and I'll step back take a breath and step back if I look at caliber coming into Equinox I looked at as an investor I have three quarters of my net worth invested in this So what you're interested in truly fascinates me because I'm aligned with. So I looked at it and said, how can I create value for our shareholders because that's creating value for me. And I look at those assets and I say with the right management in place and the right focus, we can surface more value out of that from a share price perspective. That's the value and that's the way I look at it. I take that view that it's it's you know the next 12 months, 18 months, 2 years. It's not the next quarter by quarter. >> Yes. >> But I'll create the opportunity out the next 18 months by delivering in quarter by quarter expectations. Look at Caliber, right? Caliber, we're in we're an operator for what 22 23 quarters and all but one quarter we delivered into expectations. >> Mhm. That's an amazing track record, right? by the way. >> And when we look at what that meant when we created that opportunity at the end of 2019 when we partnered with B2 Gold at 60. >> Yeah. >> Right. To raise the capital to purchase the Nicodagan assets and then vended them into Equinox just here a few months back at north of $3. That's a that's a healthy return. >> Yeah. Yeah. That's fascinating. And 22 out of 23 quarters. Correct. >> Right. Um Okay. is a couple different directions I want to go here and first actually one more question on you mentioned you met Ross September of last year that was about 12 months ago >> I have two questions out of that when did you and I it sounds like you inspired this conversation right maybe you instigated the initial conversations of the merger >> no it was really sitting with with uh Blaine Johnson >> yes >> and Ross that's the genesis of >> that's the genesis of >> right it was the two chairmans coming together and going, "Okay, >> we're aligned in the same thing. We want to create shareholder aid. >> How do we do that? >> Could these two things be >> Yeah. >> And one of the things that clicked pretty quickly is we have an asset base, but we need to get that right portfolio of human capital together to surface it." >> Yeah. So then it became pretty important as given that I have a little DNA in caliber that how was I going to blend with Ross and the team at Equinox to be able to create a product that can deliver into those expectations. Ross was looking for a solution. His his issue he'd put together these bits but >> they hadn't quite delivered into what was expected and that's why the share price was lagging. >> Yeah. >> So then we need to have the conversation about how do we think we'd interact. It's about the chemistry. So, we have each other's back. If you're looking for a a steward or a statesman, as you kind of foreshadowed earlier, you know, how could you not want a guy that looks like Ross Bey? >> Sure. >> Right. What a great person to have. >> Right. What was his single largest frustration is that we hadn't yet surfaced the value. >> Yeah. >> What can I do? How does it look? Well, Darren, could could that be part of the solution? So, that's where we looked at the 1 plus 1 equals 3. It was like how do we blend these two organizations together and you know we look at the change that's happened and if we think about from an operating perspective there's been no changes in people at an operating level as a consequence of the transaction. >> Okay. If we think of from a corporate perspective, we're talking about between both organizations, there's four people who today were employees of Caliber or Equinox 6 months ago that aren't today. >> Okay. >> That's an insignificant amount of change. >> Yeah. >> And you look at that, you go, so there's a huge and great human capital components about now aligning that behind. Right. Again, we had two CEOs, we need one. Right. So, there's some obvious things. >> Mhm. >> Right. We had two HR leads, we needed one. That's the level of change when I'm talking about the four people. Otherwise, everyone else is. So, now we have this human capital. We said, how do we align that human capital behind creating shareholder value? So, that's what Ross and I and the board have been working with the leadership teams is that our reason to exist is to create shareholder value. >> Yeah. >> Right. Through share price appreciation. What is it? It's not to produce a mean ounces a year, right? That's a means to an end. Our means to an end is to ensure that every person in our organization is aligned behind our vision of creating a 20 billion company. >> There it is >> right at a $30 share price. >> Yes. >> Is it reasonable to expect? And we can I can go through and we can talk about the comps and do a comparison with respect to half a million an ounces out of Canada and do the comps with respect to Alamos and TW times the market cap and the other half of me ounces which I'm happy to talk about. But it's reasonable to expect that over the next couple of years that we could be a $30 share price. So what do we want people to do? We want everyone to be aligned behind that $30 share price and then create a little bit of positive confusion. People go, "Well, I don't really impact anything." I said, 'You do because if your role doesn't impact our ability to deliver, by definition, the role shouldn't exist. >> Mhm. >> If you're in a role that doesn't add value, then we need to repurpose that human capital. >> Yeah. >> To be able to align it behind >> because people get confused. They look at it and they go, "Well, how do I impact?" >> Well, if you're in a fly and fly out site, you're only a bad meal >> or a misflight away from chaos. >> Right. >> Right. So the person who's feeding you, right, and the catering contractor is a critical part of that puzzle, right? And people say, well, if it's it's a lower level position. Yeah, it is, but it's critical. It takes the the village of people aligned behind and it's having everyone understanding how they contribute to. >> It's not talked about often enough in this business. what you're seeing right now is that like very focused um you know solid entrepreneurship. You're looking at everybody on the team and making sure they're clear on how they're contributing to the northstar. In this case it's the $20 billion valuation >> at a $30 share price. >> At a $30 share price. Yeah. Yeah. And that's clutch because as we know it doesn't always work out that way, right? You can quintuple your market cap and the share price sometimes doesn't move, right? If you've been a bit too free and loose with your issuance. Um, and you also mentioned 75% of your net worth tied up in the company. And I I kind of like sat with that statement for a while. I loved hearing it because your livelihood is so tied to the success or failure of this endeavor, right? You're on the bus fully. It's very important. >> No, abs. Absolutely. And and it's because, you know, I don't spend a lot of time looking at markets, looking at other investments. I don't have enough time. >> Yeah. My reason for being is to be able to surface shareholder value. That's why they pay me what they pay me to do that. And if I'm distracted by anything outside of that, >> then it's destructive to my shareholders. >> Okay? >> And >> I got to be unrelenting and looking for opportunities, too. That's why I don't get distracted by I don't invest in any other products. Not because I don't like them. It's because that's not my role. My reason for being is to do this and I'll back my own product. >> Okay. Okay. So what I want to hear from you now is you mentioned the refreshed Equinox 2.0 vision, right? And what's what's different right now? What what's the highlight, Darren? >> Yeah. No, I think what it is is getting that organizational capacity of align behind that north star because everyone comes to work every day wanting to do a good job. Their jobs are important to them and they want to go home rewarded for a day's work and be associated with something that's good. And if we get those hearts and minds and souls behind the product and they're making they're thinking and making decisions like owners, we're going to end up with a really great product. So that is the premier sort of everything's subordinate to that. And then we say, okay, now what's our portfolio of assets? So if I can get those people in thinking about what those assets are, they look at everything a little differently. they can bring us lots of good ideas and then we can then make decisions together about what is the right approach to be able to surface value because people are under the misconception that Darren's going to come in and fix things. >> Sure. Right. It's like no, all I'm going to do is provide the opportunity and the environment that allows for things to be fixed. And I do that by ensuring the organization is engaged raising issues and we address things. >> Right? Cuz the people who are running the business understand the business much better than I do. >> What's your That's a great question. What is your core purpose if you were to distill that as simply as possible as the CEO of Equinox Gold >> is to ensure that the vision of where we want to get is clear and then be a resource to the rest of the organization to remove the obstacles that get in the way of them delivering into that. That's my only reason. >> Yeah. >> It's not to make decisions. If it needs to come to me, I will. But the the intensity is is that is the decision should be made as lower level in the organization as they possibly can because arguably they're the best people who are informed and capable of being able to make those decisions. My role vision and enabling that decision- making and removing ambiguity for the business. The single largest cancer in any organization is ambiguity. Not knowing where% and why. >> 100%. You echoed something that a mentor shared with me like 10 years ago u when I was trying to learn how to be a CEO of our organization and effectively they said look you're you have one job. It's to find the best possible people on the planet and then get out of their way right and if you can do the first part right the second part takes care of itself. It's obviously a massive simplification, right? There's more moving parts and complexity and risk and things to think about, but the spirit is the same and that's effectively what you shared. Set the vision, make sure the people are aligned behind it. Then your job is to clear the obstacles, make sure the trail is clear, right? >> Yep. >> Is to remove the ambiguity and ensure that they're adequately resourced to be able to deliver into those expectations. >> Yeah. >> And that starts with fundamental things like clarity and roles and responsibilities. >> Yeah. ensuring that accountabilities are clear. >> Yeah. >> And then ensuring that the appropriate levels of authority are delegated so you can hold them to account. >> Okay. >> Cuz you know the other thing I see is within organizations is people confuse responsibility and accountability. >> Yeah. >> And effectively they're very similar except accountability has a consequence. >> You know we operate in Brazil, we operate in >> Nicaragua countries, right? in Mexico. >> Now, a little known fact is that in Spanish and Portuguese there is no word for accountability. Doesn't exist. This responsibility that >> okay, >> right? There is no accountability. Right? So even those Latin countries or Latin language which is a genesis of English, it doesn't exist. So you got to make it clear what is the difference because people people use them interchangeably. The difference between responsibility and accountability is consequence. It doesn't mean it's negative. It doesn't have to be weaponized. It's a positive thing. There's a positive result. Let's reward it. Let's take a moment, respect the past, right? How do we get here? Let's embrace the present. >> Mhm. >> But let's spend most of the time shaping the future. And we create that environment. And you'll find that people will take the hill. They really, really will. And if you can get that organization line, that's why we've seen we've seen pretty quickly >> some changes even with an Equinox 1.0 and some of the assets. >> Greenstone, we've added a little resource out there to help from a human capital perspective and a little bit of equipment, >> but really what is is creating the environment that allows for those people to take intelligent risks and deliver into expectations. And also that if we need to reframe the product, let's reframe the product. Nothing breeds success like success. So if you're always trying to defend why you didn't deliver into it creates a pretty costic sort of environment. But if we can allow some people to have some success, it'll create that ground swell. That's why critical part of our success in reframing the product was to reset expectations from a guidance perspective. Mhm. >> And we're starting to see people instead of looking at their shoes starting to be a little bit more upright. >> 100%. 100%. >> Right. And it's like so then they're starting to and they'll make mistakes and that's okay. >> Yeah. >> You know, I have I have a term in our in our organization. It's not about making the right decision. It's just making the least wrong decision we can. >> Yes. >> Because we'll make a decision today and in a month from now the decision we made may be different because the environment's changed and you need to adapt to the environment. doesn't mean you need to forgo what you thought was the goal. Yes. >> But if the environment doesn't allow you to or there's an opportunity to do better or less than what you said, you need to adjust to to make sure that people can feel good about what they're doing to deliver into. >> Okay. I want to talk to one of your people cuz I noticed today you brought in Ryan King who last time you and I chatted when it was Caliber, right after the marathon transaction, I spoke with both of you. >> Yes. >> Uh Ryan's a vice president at Equinox Gold. Can I bring him in? Can we chat? >> Yeah, absolutely. Absolutely. >> All right, let's get Ryan in here, guys. >> Ryan, you want to sit down? >> I'll sit down. >> I'd love to chat with you, man. Come on. >> Good luck. >> Big big, man. Take care. >> All right. Have a seat. >> Okay. Um, it was super fun just jamming with Darren uh because he's such a visionary. I find I actually like find myself very inspired as an entrepreneur when I chat with him. You know, it's uh and he's the guy to um facilitate the merging of cultures between these two organizations. Um you didn't have to stay, Ryan, but you're you're here, right? You're with Equinox Gold clearly for the long haul. Now, I want to break down the value as you see it because the investors are going to be asking that question, right? Where, you know, bit of upside after the transaction? Has the train already left the station? What's in the future for me? Right. Now, obviously there's something in the future for you, but you wouldn't have taken the seat. >> So, I felt it' be a good time in the conversation to swap out Darren, bring in you. >> I want to walk through the assets. I want to walk through in a bit more detail the refresh 2025 vision from a production standpoint and um and what's got let's just start there like how do you feel about this transaction? Why do you stick around? What's the upside for you? >> Yeah, I mean it's a a really good question. And I think Darren also pointed out the amount of equity that he owns in this business. So this isn't just about a, you know, a salary and a job. This is a big portion of our net worth, right? And being involved in the direction of which way that goes is important particularly to me and I know it is for Darren. For me, I mean, I I again, this is probably close to over 75, maybe 80 plus percent of my personal network. >> This one company. >> I love that. >> Um, and it's it's obviously it's a big number. >> Yeah, I was going to say, is that scary? >> Um, for me, and it's it's it is it it drives a level of behavior as an owner in the business to be focused and diligent, but also uh ethical and transparent about how we do things. But um that's really the driving force behind this is that not only do I see an opportunity in the gold sector as a whole because I do believe that we'll likely see higher gold prices, but also the unlocking of value within this portfolio now today with the with the leadership that's in place with the experience and the expertise to unlock and deliver this portfolio now. And I think this has kind of been holding back Equinox a little bit. And now with Darren, Dave, and others that have had tremendous years of experience in operations in big, you know, maybe it's lower grade, but big large open pit assets to be able to unlock that and also but look at the assets from a different perspective. Maybe there's a different opportunity. Maybe there's a different way to do it that could unlock that value. And I think that's really important. So that's kind of what drives me. Also learning from Darren, Dave, and other people in the business >> is also a driving force for me. >> Can we I want to unpack that uh unlock concept a little bit and get a little bit granular. We can get to the assets, but maybe it's better to start with the portfolio, right? Because if if I look at it today, there's nine producing assets in Equinox 2.0 portfolio. And um you know the the highlight reel would probably be Nicaragua producing 220 to 240,000 ounces per year thereabouts. Obviously Greenstone in Ontario and the soon to be in production Valentine in Newf Finland. And then there's a handful of assets that are producing less than 100,000 ounces per year. Now fresh set of eyes on that portfolio. Do you like what you see? Do you expect to be making any adjustments? Right. And if so, what can you speak to? >> If we look over the last 10 years as Equinox 1.0, I know they've done a great job of assembling a large portfolio and I believe that the complement of the addition of caliber is is uh pretty significant. Right now during this period of time we're in a interesting inflection point. Put the gold price aside but we look at the portfolio. We're going from more of a Central America, South America portfolio tearing up in terms of jurisdiction. So when we look at those types of companies in tier one jurisdictions, they trade at a premium versus companies that trade in non-tier one jurisdictional uh locations. >> So we're in the process of going from >> I don't know exactly what percentage but probably north of 60 maybe 65% of our net asset value tearing up in terms of its jurisdiction to Canada to the United States etc. So I think that's an that's an inflection point that investors will be watching. >> Yes, >> institutional investors, analysts are watching obviously various various forms of family offices and retail. But um so that allows us now to sit back obviously not sit back and just you know rely on that but also look at the whole portfolio and say what else could then shift the narrative and the value. So could a Central American asset suite like a Nicaragua or a South American asset suite like Brazil be better off in someone else's hands in someone else's portfolio? >> Sure. >> Right. So driving that sort of more North American centric uh asset base could it be could be potentially. Um so you're always looking at the portfolio to see what is the right mix. what could add value for our existing shareholders by maybe not owning an asset whether it be because it doesn't have a huge mine life whether it be because it has a higher cost profile what whatever the reason maybe there's an opportunity there so we're always looking at that and I think now is the time where we're probably more looking at the divevestature angle >> yes >> as we've recently announced the divevestature of our smaller pan asset in the portfolio a great asset an enduring great location >> but smaller in the portfolio of the company now as we're a you know call it a million ounce a year roughly portfolio a producer. >> So what was the pan production? >> Yeah 30 to 35,000 ounces a year. >> Yeah >> annually. Yeah that's right. So, so a smaller uh producing asset in the portfolio, but nonetheless it was a contributor, but uh that that just shows an opportunity and maybe the the thinking is changing a little bit in terms of um the strategy for Equinox. It's not just about growth, but it's about looking at the portfolio and what is going to drive share price performance. You know, that's a key for us is looking at all the share price uh per share metrics to drive that valuation. And so you look at the, you know, we've been investing capital into Valentine, uh, Equinox 1.0 has been investing capital into Greenstone in Ontario. So Greenstone in Ontario, Valentine and Newfoundland. What's also interesting is that we're at this inflection point where that capital investment is now going to slow down and we should start to harvest yes the results of that time and that effort into unlocking the value of those portfolios. So in a cash harvest and then allowing us to delever the balance sheet as we've you know put that put those uh tools in place to be able to build those. >> So that's the season right now for Equinox, right? Both companies have been growing aggressively, applying different strategies, allocating capital into future productivity. And now it's time with this marriage to reflect on the company as a whole and cleanse it a little bit and say, are we okay, we've got a lot going on. We got a lot of assets. We're in five countries. We got things happening in Newf Finland and Ontario. Are we the absolute best million ounce producer that we could be? And let's be that now and then probably look at growth again in the future. And and you also have to then look and reflect what does make a top quartortile valued gold producer. What makes that? And when we've done some of our analysis, it's the tier one jurisdiction. It's a >> an Australia, it's in North America, key jurisdictions like that. >> It's a high quality, high margin asset. >> And then it's really likely the team that is able to deliver on those assets. Yeah. So when we look at we've been tearing up in terms of the quality of the assets, the jurisdiction of the assets and now we have the team to deliver these assets. So we're right at that point in time now where it's like okay you've done all the investments, you've assembled the team, you've got it here together now, now let's see what can be done with this portfolio and what else could be divested of. >> So okay, I like I like how you did that. You kind of outlined the three points. You got to have the tier one jurisdiction. You know, it is more important now than ever to investors and I think for good reason. And you and I both know many investors who um aren't concerned about jurisdiction. They're just concerned about asset. And they say, "Look, the political risk in Canada is just different from the political risk in Niger, right? They both have risk. It's just different, right? You could be stuck in a coup or you could be stuck in policy uh and permitting." Um but you know I think what you said is absolutely true and reflected in the share price of the companies which is what you got to pay attention to right and so we're upgrading the tier 65% of the asset base now in tier one jurisdictions so you feel like you're ticking that box. Um, jumping down to point three, the leadership. I just have to agree with you based on the track record of both yourself, not just with caliber, but with new market prior to, uh, Darren, of course, who I just spoke to, and then you're marrying the team at Equinox, led by Ross Bey, the broken slot machine in the mining sector. 14 companies under his belt. All 14 have been 10baggers. That's remarkable. And this is his swan song. So, I know he wants to go out with a bang, but talk to me about point two there. upgrading the quality of the asset base. So we're talking about margin. So where should people pay attention here? What justifies that point? >> So when we look at taring up in terms of the asset quality, if we look at the portfolio, there are assets that are mature. They've been around a long time. Um they were originally built on what was the resource or the reserve and over time they've had depletion. They've had costs go up. So now we look at the quality of a greenstone in northern Ontario or Valentine in central region of of Newfoundland. What what I'm excited about here >> is um the fact that they're new assets. So there's long lives in front of them. >> Yes. >> I think that's really important as a probably also to into the mix of the the quality is the where they are in the cycle of their life. >> Yeah. Yeah. 100%. >> So brand new and based on reserves, we know that there's decades in front of them. Okay, >> we also look at, you know, something like a greenstone. It it has had expiration, but there's a 100 kilometer belt where there hasn't had a huge amount of green fields type exploration. And we look at Valentine. Valentine itself is a brand new mine, but it's a a green fields project, meaning there's never been past production there in the past. Mhm. >> Meaning that um also at the same time there's been probably a fair fairly limited amount of exploration along this multicometer big fractured fault going through this property. Meaning that there could be an opportunity where there could be a lot more gold there. And in fact, I go back to uh 2024. Caliber acquired the asset, closed the deal of Marathon Gold in January. By the end of the year, we had already discovered a new zone within that property about a kilometer south of a of a known resource. So what what we always look for what adds share price performance is those three critical things that we talked about, but also finding new >> expansion >> expansion of the resources. >> And we're in some fantastic areas where there could be tremendous amount of upside. And I think back to to to the times at at caliber or even new market and what drove the share price performance was yes the gold price was robust and increasing at the time but the biggest value driver in my view was delivering on the operations and finding new >> finding new resources discovering areas right >> even within an operating portfolio it has a tremendous impact. >> Yes. Yes. And that is kind of an addition to the Equinox culture that wasn't super present for the last few years. Not to say Ross hasn't demonstrated that with previous companies, but the Equinox model was the buy and build. And so we're bringing this uh culture to marry that, right, which is the uh learn and expand present assets and find out what else is under there. And I remember like we were chatting maybe a year ago last time we had you and Darren in the studio and you're like Darren always says at the end of the day uh when you're in the pit you're minding the resource not the reserve right you keep going as long as the rock's there right >> um so so uh at a high level Ryan uh somebody who's looking at this today and I actually want to ask you have you guys become super clear internally has the grand vision for Equinox changed and are you clear on that yet or is there still some integration and learning that you want to do first. >> It's only been a couple months. >> Yeah. >> Right. It's only been a couple months. So, >> it's happening quickly. Okay. >> The vision is happening quickly. I mean, Darren's done a tremendous job of >> pulling the board together and then leading the organization to the north star, which is that multi-billion 20 billion plus company. >> There it is. >> Based on share price appreciation, not on going out and acquiring and diluting the shares further. Um, so I think people are getting a little bit more excited. >> They're getting a little bit more confident. >> So that actually helps drive the organization to being a little bit more confident about everything they're doing on on a daily basis. Yeah. >> Which I think >> well they should be right because if you had any apprehension on either team after the merger, you can look at the market response and have conviction that like this was the right decision. Let's go. I mean, yes, but at the same time, we've had, you know, some wins in the gold price in the in the short in the short term. But >> to your point, I think yes, because people are starting to get >> even in a period of a short, you know, what has it been 2 3 months, >> we've gone through a reset of expectations from a production and cost perspective. And then for the first quarter of that postreset expectations, we delivered into that. >> Yeah. and we foreshadowed what what is expected to come in the future. So there's that little bit level of buoyancy in the market going, "Hey, wait a second. This was a tremendously undervalued equity." When you put the two together, it looks like there's an opportunity here. And to your point, I mean, the market is starting to see >> Okay, that's that there's an opportunity here. >> Yes. >> And we are seeing a shared price um react as a consequence of what we've done. >> Okay. So, I feel like we covered some of the smaller assets in enough detail. You're looking critically at them. you're keeping the best. You might make some decisions with some of them. We'll wait and see on that one. There might be some divesting, but we'll wait and see. The three big assets, uh, the one I want to ask you about now is Valentine. That's the next to come online. So, just walk the audience through the timeline, what they can expect to come out of your Newfoundland Valentine asset, which is forecasted to do over 200,000 ounces per year. >> Yeah. Yeah. So where we sit today, um we just recently put out some news on first ore through the plant. So ore is now going through the plant. Um we've got a tremendous team in place there that has uh experience uh commissioning plants, commissioning mines. >> Um we've got we've got people that have operated mines all around the world, whether that be a a a process plant manager, mine manager, uh overall site manager in Jason's here. We've got a great team in place that that we'll be able to manage through the process of a ramp up. So, you know, a ramp up is not an easy process. You're turning a let's call it a billion dollar plant to produce metal. >> Yeah. >> So, there's always going to be things that come up along the way and there have been some of those already that they've been able to react quickly to and then, you know, make short-term or even medium long-term fixes within the plant. So they're they're and they've already been able to anticipate what could be some of those issues that have come up and got in front of it so that there's not those issues. Right? >> So that ramp up process we we've told the market we would expect to be at the name plate capacity. Now keeping in mind that original feasibility study name plate was going to be about 2 1.5 million tons of throughput through that plant a year which would result in a life of mine or the first 12 years of a life of mine reserve life of mine average of about 200,000 ounces a year. Okay. >> Okay. So that's that's so we would expect to be at that name plate by say the end of Q1 maybe sometime in Q1 of next year if all goes well. Okay. >> But uh I think it's worthwhile pointing out as well that when Caliber first did a capital cost update, we also included some additional tankage in that update which could allow for the plant to maybe go to 3 million tons of throughput. So there is that potential flexibility to go a little bit to push the plant a little bit beyond the 2.5 million ton original throughput. So let's see how that goes. that could be, you know, maybe uh a little bit of an opportunity for the company to see to maybe realize that that upside. So, walking through that ramp up, getting us to name plate, let's call it uh let's say we we get it there by the end of Q1 of next year, you're looking at about 150 to 175,000 ounces in that $1,300 to $1,500 range. We haven't given any guidance for that, but that's probably where we're going to end up. Um, as part of this process, there is a phase 2 that was in the feasibility study that would take the mill from 2.5 million tons from the original, you know, technical report to 4 million tons. >> Okay. >> Um, so Darren and the technical team have also been looking at, well, is there any opportunity to maybe push that tonnage even further, >> right? And so there there there's been a bunch of technical studies and analysis done now where it is likely to be able to push it further, but we're just obviously monitoring and watching how this first ramp up goes and then we'll start providing the market with some additional clarity. >> So I believe that we're actually I mean and again when we compare this against a Greenstone, it's smaller. >> It's not as a complex plant as a Greenstone plant. So we would anticipate that we should be pretty effective uh in ramping this this this operation up getting it to its name plate capacity. >> We are in the process of of doing quite a bit of exploration work across the property. So let's see how that unfolds as well. Um and you know I think in the beginning here I said that this is a 12 year of a 14-year mine life. I want to be careful with that because it's a 12 the first 12 years is about 200,000 ounces out of a 14-year reserve life as it was based on the feasibility study. >> And you made the comment, you know, when Darren's out there, he's mining to the resource. >> Yes. >> This is a five plus million ounce in all categories. So 4 million ounces measured and indicated another million ounces of inferred um and plus we haven't even talked about you know some of the some of the drilling that's happened outside of that that could lead to additional mine life. I would anticipate we're here for quite a lot longer than what that kind of snapshot in time feasibility study looked at. So that's why I'm excited about Valentine. I would expect the same out of greenstone as well. >> Okay. >> Um as we continue to invest in these assets. So, we're going to be generating a significant amount of operating cash flow, >> right? If we stepped back and we said, let's call it a million ounces of gold a year. This isn't official guidance, but let's just say that's, you know, when you put the big chunky bits together, it's around a million ounces. And let's say the let's just be very conservative here and say our our allin sustaining cost to produce those ounces of gold is somewhere around $1,800 to $1,900 an ounce. Let's just say that. Yeah, >> plus you've got some growth capital, plus you've got some other expenses. But say all in, it's somewhere around $2,300 an ounce. Just allin exploration, capex, financing expenses. Well, here we are today at at $3,500 an ounce gold. You're talking about 1.2 1.3 billion of operating cash flow. >> Mh. >> So, a tremendous amount of cash flow generation. as we just talked about that significant investment into the portfolio is now going to really start reaping the benefits. >> Yes. Okay. Yeah. I like how you colored that. So for people who are looking at this story now, I think and they're looking forward for future news flow. Every investor, what they really want to know is what's going to make the share price go up, right? What have you done for me lately? Absolutely. >> Um and what they can look forward to is kind of like I'd tell them to look three different directions right now. Um, pay attention to the smaller assets because there might be some decisions made there. There might not be, but it's something under consideration with the team as we talked about. Uh, pay attention to Valentine in Newfoundland because we're still exploring. We're still hoping to expand and that should be uh hitting name plate production by Q1. And so that's the metric, the milestone that we should look for. And we're still investing in Greenstone in Ontario. Same thing. And so it seems like it's a season of of um do less but better at Equinox 2.0, right? You're focusing on what you have. You're refining what you're doing and you're cleansing the operation if necessary, but getting really good at delivering on that million-doll ounce um uh I don't want to say promise, but that's the that's the hope, right? That's the expectation. >> Well, that's the that's the goal now with this portfolio. It's not necessarily the goal. I should say that's where we're at with this portfolio. Yeah. It may be 800,000 ounces. Sure. And it may be u a tiered up in terms of jurisdiction, whatever. It's not necessarily the ounce number. It's more about the quality and where and and what could drive that share price performance. So, we're always looking at that. >> Yeah. Okay. And you know, as a consequence of that, we're looking to harvest, right? And that harvesting for you right now at your uh you know 2,300 estimate cost of production, you're all in um at today's gold prices equates to 1.2 1.3 billion of cash flow per year. >> Yeah. >> Yeah. Okay, >> Ryan, it's exciting time to be uh to be an Equinox shareholder. Man, I >> I I think so. And you you started off the conversation by asking me why I'm here. And so it's these types of things right at the crux of these inflection points that I think and so so it's twofold. It's the business that it's coming into its own to realize and harvest this cash and then hopefully be in a position to return capital to shareholders in a short period of time, >> but it's also what's happening from a macro landscape as well with the gold price. >> Yeah. >> So it's the convergence of these two where I think man we could really see some share price performance uh over the next couple of years. And that's why I'm excited and that's why I have most of my net worth in the company. >> Yeah, dude. I like it. I love the team. I love the direction and it's been so good jumping into the vision with you. So, thanks for making the time. Uh, so great chatting with Darren as well. So, I wish you guys all the best and we'll be watching the story closely for sure. >> Excellent. Thanks very much, Dave. Appreciate it.