All dollar amounts are expressed in
US$
VANCOUVER, BC, Feb. 9, 2021 /CNW/ - Equinox Gold
Corp. (TSX: EQX) (NYSE American: EQX) ("Equinox Gold" or the
"Company") today announces 2021 production guidance of 600,000 to
665,000 ounces of gold, a 33% increase over 2020 production of
477,200 ounces of gold. Cost guidance includes cash
costs1 of $940 to
$1,000 per ounce of gold sold and
all-in-sustaining costs1 ("AISC") of $1,190 to $1,275
per ounce of gold sold. The Company is hosting a virtual investor
reception and corporate update today commencing at 7:00 am PT (10:00 am
ET). Further details are provided at the end of this news
release.
"2021 represents a year of investment for Equinox Gold as we
direct our strong operating cash flow to our existing portfolio of
mines and growth projects," said Christian
Milau, CEO of Equinox Gold. "These investments in 2021 will
set the foundation for lower-cost production, longer-life mines and
substantial near-term production growth with an increase to
approximately 900,000 ounces of gold at significantly lower costs
in 2022 and approximately one million ounces of gold from 2023.
"All-in-sustaining costs in 2021 include stripping campaigns at
Los Filos, Mesquite and Aurizona to access higher-grade ore, which
will increase production and reduce costs in the second half of the
year. Growth capital includes the Los Filos expansion projects, a
significant pit expansion at RDM and completion of construction at
Santa Luz. The Company is also undertaking an aggressive
exploration program focused on mine life extension and reserve
replacement.
"We also look forward to completing the acquisition of Premier
Gold Mines this quarter and integrating the producing Mercedes Mine
and construction-ready, multi-million-ounce Hardrock project into
our portfolio and plans. Our share of production from Hardrock
would further reduce our costs per ounce produced and boost
production by more than 200,000 ounces annually starting in
2024."
2021 Guidance and Outlook
|
Production
(ounces)
|
Cash
Costs1
($/ounce)
|
AISC1,2
($/ounce)
|
Sustaining
Capital1
|
Non-sustaining
Capital1
|
Mexico
|
Los Filos
|
170,000 -
190,000
|
$1,125 -
$1,200
|
$1,330 -
$1,390
|
$38 M
|
$95M
|
USA
|
Mesquite
|
130,000 -
140,000
|
$925 -
$975
|
$1,275 -
$1,325
|
$48 M
|
$9 M
|
Castle
Mountain
|
30,000 -
40,000
|
$725 -
$775
|
$1,100 -
$1,150
|
$14 M
|
$10 M
|
Brazil
|
Aurizona
|
120,000 -
130,000
|
$720 -
$770
|
$1,075 -
$1,125
|
$46 M
|
$4 M
|
Fazenda
|
60,000 -
65,000
|
$820 -
$870
|
$1,075 -
$1,125
|
$15 M
|
$2 M
|
RDM
|
55,000 -
60,000
|
$1,000 -
$1,050
|
$1,175 -
$1,225
|
$10 M
|
$35 M
|
Pilar
|
35,000 -
40,000
|
$1,200 -
$1,300
|
$1,400 -
$1,500
|
$7 M
|
-
|
Santa Luz
|
|
|
|
|
$94 M
|
Total –
Mines
|
600,000 -
665,000
|
$940 -
$1,000
|
$1,190 -
$1,275
|
$178
M
|
$249
M
|
_________________________
|
1 Mine cash cost per oz sold, AISC
per oz sold, sustaining capital and non-sustaining capital are
non-IFRS measures. See Cautionary Notes.
|
2 Exchange rates used to forecast
2021 AISC include a rate of BRL 4.75 to USD 1 and MXN 20.0 to USD
1.
|
Consolidated gold production is expected to increase each
quarter during the year, with approximately 30% of 2021 production
occurring in Q4 as the mines access higher-grade ore at both Los
Filos and Mesquite.
Overall cash costs for 2021 reflect an assumption of
strengthened local currencies and slightly increased fuel and other
consumable costs, as well as lower grades mined at Los Filos as the
Guadalupe stripping program and Bermejal underground development
are advanced through the year. AISC for 2021 includes important
sustaining investment at the Los Filos, Mesquite and Aurizona
mines. The Company is also undertaking a number of growth projects
this year including constructing the Santa Luz mine, advancing
expansion projects at the Los Filos mine, completing a pit
expansion at the RDM mine and undertaking exploration focused on
mine life extensions at Mesquite, Los Filos, Aurizona and
Fazenda.
Guidance will be updated to include the Mercedes mine and
Hardrock project following completion of the proposed acquisition
of Premier Gold Mines, which is expected to close in March subject
to all necessary securityholder and regulatory approvals. The
Company may revise guidance during the year to reflect changes to
expected results.
Los Filos Gold Mine, Mexico
The Los Filos gold mine in Guerrero State, Mexico currently comprises two open pits (Los
Filos and Bermejal), one underground mine (Los Filos) and secondary
recovery from previously leached ores. Expansion projects are
underway to increase annual production and extend the mine life
including the addition of the Guadalupe open pit, the Bermejal
underground mine and plans for construction of a new
carbon-in-leach ("CIL") plant to operate concurrently with the
existing heap leach operation. An updated feasibility study and
technical report is expected to be complete in the first half of
2021 ("H1 2021").
Los Filos production for 2021 is estimated at 170,000 to 190,000
ounces of gold, with production weighted 60% toward the second half
("H2") of the year. Production will gradually increase during
Q1 2021 as mining activities and leaching ramp up following
the recent December restart of operations, and increase quarter
over quarter as development activities provide access to
higher-grade ore from the Guadalupe open pit by mid-year and the
Bermejal underground deposit in the H2 2021, both of which were
deferred to 2021 due to the government-mandated suspensions during
Q2 2020 due to COVID-19 and a community blockade from September
through December. Costs are expected to decrease over the year as
production increases and are anticipated to decrease further in
future years as mine expansion is completed and grades increase.
Los Filos cost guidance for 2021 is estimated at cash costs of
$1,125 to $1,200 per ounce sold, with AISC of $1,330 to $1,390
per ounce sold. AISC is expected to trend below $1,000 per ounce as the expansion is
completed.
Capital investments at Los Filos during 2021 will support
significant production growth from 2022 and mine life extension.
The Company has planned a total sustaining and non-sustaining
capital spend of $133 million at Los
Filos for the year. AISC at Los Filos in 2021 includes $38 million of sustaining capital, with
$13 million allocated for fleet
refurbishment and processing equipment, $9
million for development at the Los Filos underground mine
and $13 million for capitalized
stripping of the Los Filos and Guadalupe open pits.
Non-sustaining growth capital of $95
million relates to the expansion projects and was in part
deferred from 2020, including $48
million for Bermejal underground development, $10 million for pre-stripping of the Guadalupe
open pit and $25 million for fleet
rebuilds and new equipment. In addition, $5
million relates to exploration for extension of the Los
Filos underground mine life and $6
million is for expansion of heap leach processing
capabilities. Guidance does not include capital for construction of
the CIL plant, which could commence in H2 2021.
Mesquite Gold Mine, USA
Mesquite production for 2021 is estimated at 130,000 to 140,000
ounces of gold, heavily backend weighted with approximately 40% of
production coming in Q4 2021, with cash costs of $925 to $975 per
ounce and AISC of $1,275 to
$1,325 per ounce.
AISC at Mesquite in 2021 includes sustaining capital of
$48 million related primarily to a $30
million stripping program to access the higher-grade, oxide
Brownie deposit, which will contribute significantly to production
beginning in H2 2021 and continuing throughout 2022. As a result,
AISC is substantially lower in H2 2021. In addition, the Company
has planned $10 million for leach pad
expansion and $6 million for mining
and processing equipment. The truck fleet is being renewed with the
addition of 10 new CAT 793 haul trucks via a $43 million lease. This investment in a new fleet
will support operations for a substantially longer mine life than
contemplated when the Company acquired Mesquite in 2018 and will
reduce costs over the life of mine.
Exploration success since acquiring Mesquite has extended the
expected mine life by more than three years and further mine life
extension remains a focus in 2021. Non-sustaining growth capital of
$9 million is allocated entirely to
exploration focused on resource growth in the Brownie, Vista East
and Rainbow deposits as well as reserve replacement.
Castle Mountain Gold Mine, USA
Castle Mountain production for 2021 is estimated at 30,000 to
40,000 ounces of gold with cash costs of $725 to $775 per
ounce and AISC of $1,100 to
$1,150 per ounce.
AISC at Castle Mountain is temporarily elevated in 2021 as it
includes sustaining capital of $14
million primarily comprising $9
million for a leach pad expansion that will accommodate the
entirety of Phase 1 operations and $3
million for plant optimization.
Equinox Gold is finalizing a feasibility study for a proposed
expansion of Castle Mountain, which is expected to increase average
production to more than 200,000 ounces of gold annually. The
feasibility study and technical report is expected to be complete
in H1 2021. Non-sustaining growth capital at Castle Mountain in
2021 of $10 million includes
$7 million to complete the
feasibility study and commence permitting for the expansion,
$2 million to construct an assay lab
on site and $1 million for
exploration.
Aurizona Gold Mine, Brazil
Aurizona production for 2021 is estimated at 120,000 to 130,000
ounces of gold with cash costs of $720 to $770 per
ounce and AISC of $1,075 to
$1,125 per ounce. Mining costs
increase slightly in 2021 due to an increase in the proportion of
fresh rock from 14% to 23% of ore mined, as well as an increase in
the cost for consumables and the assumption that the Brazil Real
will strengthen in 2021.
AISC at Aurizona in 2021 includes sustaining capital of
$46 million allocated primarily to $27
million in capitalized waste stripping, including eight
million tonnes deferred from 2020, and $15
million to increase capacity of the tailings storage
facility. Non-sustaining growth capital at Aurizona of $4 million is directed to exploration, land
purchases and completion of the Piaba underground prefeasibility
study.
Fazenda Gold Mine,
Brazil
Fazenda production for 2021 is estimated at 60,000 to 65,000
ounces of gold with cash costs of $820 to $870 per
ounce and AISC of $1,075 to
$1,125 per ounce.
AISC at Fazenda in 2021 includes sustaining capital of
$15 million allocated primarily to
$8 million for underground
development and equipment and $4
million in open-pit waste stripping. Non-sustaining growth
capital of $2 million relates to
exploration.
RDM Gold Mine, Brazil
RDM production for 2021 is estimated at 55,000 to 60,000 ounces
of gold with cash costs of $1,000 to
$1,050 per ounce and AISC of
$1,175 to $1,225 per ounce.
AISC at RDM in 2021 includes $10
million of sustaining capital of which $6 million relates to increasing capacity of the
tailings storage facility, with $2
million for equipment and $2
million for buildings and infrastructure. Non-sustaining
growth capital of $35 million relates
entirely to capitalized stripping for a pushback of the open-pit,
providing lower strip access to the ore body in future years.
Pilar Gold Mine,
Brazil
Pilar production for 2021 is estimated at 35,000 to 40,000
ounces of gold with cash costs of $1,200 to $1,300
per ounce and AISC of $1,400 to
$1,500 per ounce.
AISC at Pilar in 2021 includes sustaining capital of
$7 million for underground
development. The Company has not allocated any non-sustaining
capital to Pilar during 2021.
Santa Luz Gold Project, Brazil
Equinox Gold commenced full-scale construction of Santa Luz on
November 9, 2020. Of the total
$103 million construction budget, the
Company has budgeted $94 million in construction and mine
development capital in 2021. Open-pit stripping is expected to
begin in Q1 2021 with processing infrastructure expected to be
finished by the end of 2021 and first gold pour targeted for Q1
2022.
The Company completed a feasibility study for Santa Luz in
November 2020 outlining the design of
an open-pit mine producing 903,000 ounces of gold over an initial
9.5-year mine life with average annual production of 110,500 ounces
of gold for the first five years. At $1,600 per ounce gold, the mine has an after-tax
net present value (discounted at 5%) of $362
million and an after-tax internal rate of return of 67%.
Exploration and Corporate Costs
The Company plans an exploration spend of $37 million for 2021, all regarded as
non-sustaining in nature, of which $17
million is included in non-sustaining capital guidance above
with the remainder to be expensed during the year. Exploration will
focus on mine life extension at the shorter-life mines, with
approximately $9 million (63,000 metres) planned for Mesquite
and $7 million (49,000 metres) for
Aurizona and district. The Company will also invest $10 million (111,000 metres) to explore the
Fazenda-Santa Luz district, a 70-km-long greenstone belt that hosts
both the Fazenda and Santa Luz mines. Many of the Company's targets
in this highly prospective geological trend, and in the Aurizona
greenfield properties, have never been drill tested before,
presenting the opportunity to identify new projects for the
Company's growth pipeline.
Corporate costs for 2021 are expected to be approximately
$25 million or $39 per ounce of gold sold using the mid-range of
production guidance, which includes savings of more than
$7 million from Leagold merger
synergies. Corporate costs are not included in cash cost or AISC
guidance and exclude discretionary equity-linked compensation.
Mineral Reserves and Resources
Equinox Gold will provide an update of Mineral Reserves and
Mineral Resources in mid-2021.
Investor Reception and Corporate Update
Equinox Gold's Chairman, Ross
Beaty, will host a virtual investor reception commencing at
7:00 am PT (10:00 am ET) today, including a corporate update
on activities underway at the Company's projects. Christian Milau, the Company's CEO, will also
discuss Equinox Gold's long-term strategy and upcoming
milestones.
The investor reception will be held via webcast so that all
participants have the opportunity to see the presentation slides
and ask questions of Ross Beaty,
Christian Milau and Equinox Gold's
executive team. Investors without internet access can listen to the
presentation and ask questions by joining the conference call.
Reception details
Webcast
www.equinoxgold.com
Conference
call
Toll-free in U.S. and Canada: 1-800-319-4610
International callers: +1 604-638-5340
The webcast will be archived on Equinox Gold's website until
August 9, 2021.
Qualified Persons
Doug Reddy, P.Geo., Equinox
Gold's COO, and Scott Heffernan,
MSc, P.Geo., Equinox Gold's EVP Exploration, are the Qualified
Persons under National Instrument 43-101 for Equinox Gold and have
reviewed and approved the technical content of this news
release.
About Equinox Gold
Equinox Gold is a Canadian mining company with seven operating
gold mines and construction underway at an eighth site, a
multi-million-ounce gold reserve base and a clear path to achieve
one million ounces of annual gold production from a pipeline of
development and expansion projects. Equinox Gold operates entirely
in the Americas, with two properties in the United States, one in Mexico and five in Brazil. Equinox Gold's common shares are
listed on the TSX and the NYSE American under the trading symbol
EQX. Further information about Equinox Gold's portfolio of assets
and long-term growth strategy is available at www.equinoxgold.com
or by email at ir@equinoxgold.com.
Cautionary Notes and Forward-looking
Statements
Non-IFRS Measures
This news release refers to cash costs per ounce, all-in
sustaining costs per ounce sold, sustaining capital and
non-sustaining capital, which are measures with no
standardized meaning under International Financial Reporting
Standards ("IFRS") and may not be comparable to similar measures
presented by other companies. Its measurement and presentation is
intended to provide additional information and should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. Non-IFRS measures are
widely used in the mining industry as measurements of performance
and the Company believes that they provide further transparency
into costs associated with producing gold and will assist analysts,
investors and other stakeholders of the Company in assessing its
operating performance, its ability to generate free cash flow from
current operations and its overall value. Refer to the "Non-IFRS
Measures" section of the Company's Management's Discussion and
Analysis for the period ended September 30,
2020, for a more detailed discussion of this non-IFRS
measure and its calculation.
AISC per Ounce Sold
AISC per gold ounce sold is a non-IFRS measure based on
guidance announced by the World Gold Council ("WGC") in
September 2013 and updated in
November 2018. The WGC is a
non-profit association of the world's leading gold mining companies
established in 1987 to promote the use of gold to industry,
consumers and investors. The WGC is not a regulatory body and does
not have the authority to develop accounting standards or
disclosure requirements. The WGC has worked with its member
companies to develop a measure that expands on IFRS measures such
as operating expenses and non-IFRS measures to provide visibility
into the economics of a gold mining Company. Current IFRS measures
used in the gold industry, such as operating expenses, do not
capture all of the expenditures incurred to discover, develop and
sustain gold production. The Company believes the AISC measure
provides further transparency into costs associated with producing
gold and will assist analysts, investors and other stakeholders of
the Company in assessing its operating performance, its ability to
generate free cash flow from current operations and its overall
value. Combined AISC does not include corporate
G&A.
Forward-looking Statements
This news release contains certain forward-looking
information and forward-looking statements within the meaning of
applicable securities legislation and may include future-oriented
financial information. Forward-looking statements and
forward-looking information in this news release relate to, among
other things: the Company's ability to successfully complete the
Premier acquisition and achieve the benefits contemplated in the
transaction; the Company's ability to successfully advance and
achieve production at Santa Luz; the strategic vision for the
Company and expectations regarding exploration potential,
production capabilities and future financial or operating
performance; and the Company's ability to successfully advance its
growth and development projects, including the Hardrock project and
the expansion at Los Filos. Forward-looking statements or
information generally identified by the use of the words "will",
"targeted", "target", "clear path", "underway", "expected",
"anticipated", "planned" and similar expressions and phrases or
statements that certain actions, events or results "may", "could",
"would" or "should", or the negative connotation of such terms, are
intended to identify forward-looking statements and information.
Although the Company believes that the expectations reflected in
such forward-looking statements and information are reasonable,
undue reliance should not be placed on forward-looking statements
since the Company can give no assurance that such expectations will
prove to be correct. The Company has based these forward-looking
statements and information on the Company's current expectations
and projections about future events and these assumptions include:
the consummation and timing of the Premier acquisition; the
strengths, characteristics and potential of Equinox Gold following
the Premier acquisition; Equinox Gold's ability to achieve its
production, cost and development expectations for its respective
operations and projects; prices for gold remaining as
estimated; currency exchange rates remaining as estimated;
construction and development at Santa Luz, Los Filos and Hardrock
being completed and performed in accordance with current
expectations; exploration programs achieving the expected mine life
extension and mineral reserve replacement; tonnage of ore to be
mined and processed; ore grades and recoveries; availability of
funds for the Company's projects and future cash requirements;
capital, decommissioning and reclamation estimates; Mineral Reserve
and Mineral Resource estimates and the assumptions on which they
are based; prices for energy inputs, labour, materials, supplies
and services; no labour-related disruptions and no unplanned delays
or interruptions in scheduled construction, development and
production, including by blockade; all necessary permits, licenses
and regulatory approvals are received in a timely manner; and the
Company's ability to comply with environmental, health and safety
laws. While the Company considers these assumptions to be
reasonable based on information currently available, they may prove
to be incorrect. Accordingly, readers are cautioned not to put
undue reliance on the forward-looking statements or information
contained in this news release.
The Company cautions that forward-looking statements and
information involve known and unknown risks, uncertainties and
other factors that may cause actual results and developments to
differ materially from those expressed or implied by such
forward-looking statements and information contained in this news
release and the Company has made assumptions and estimates based on
or related to many of these factors. Such factors include, without
limitation: fluctuations in gold prices; fluctuations in prices for
energy inputs, labour, materials, supplies and services;
fluctuations in currency markets; operational risks and hazards
inherent with the business of mining (including environmental
accidents and hazards, industrial accidents, equipment breakdown,
unusual or unexpected geological or structural formations,
cave-ins, flooding and severe weather); inadequate insurance, or
inability to obtain insurance to cover these risks and hazards;
employee relations; relationships with, and claims by, local
communities and indigenous populations; the Company's ability to
obtain all necessary permits, licenses and regulatory approvals in
a timely manner or at all; changes in laws, regulations and
government practices, including environmental, export and import
laws and regulations; legal restrictions relating to mining
including those imposed in connection with COVID-19; risks relating
to expropriation; increased competition in the mining industry; and
those factors identified in the Company's MD&A dated
February 28, 2020 and its Annual
Information Form dated May 13, 2020,
both of which relate to the year-ended December 31, 2019, and in the Company's MD&A
dated November 5, 2020 for the three
and nine months ended September 30,
2020, all of which are available on SEDAR at
www.sedar.com and on EDGAR at
www.sec.gov/edgar. Forward-looking statements and
information are designed to help readers understand management's
views as of that time with respect to future events and speak only
as of the date they are made. Except as required by
applicable law, the Company assumes no obligation to publicly
announce the results of any change to any forward-looking statement
or information contained or incorporated by reference to reflect
actual results, future events or developments, changes in
assumptions or changes in other factors affecting the
forward-looking statements and information. If the Company updates
any one or more forward-looking statements, no inference should be
drawn that the Company will make additional updates with respect to
those or other forward-looking statements. All forward-looking
statements and information contained in this news release are
expressly qualified in their entirety by this cautionary
statement.
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SOURCE Equinox Gold Corp.