All dollar amounts are expressed in
US$
VANCOUVER, BC, Jan. 25, 2022 /PRNewswire/ - Equinox Gold
Corp. (TSX: EQX) (NYSE American: EQX) ("Equinox Gold" or the
"Company") announces 2022 production guidance of 625,000 to 710,000
ounces of gold, increasing from 2021 production of 602,100 ounces
of gold. Cost guidance includes cash costs1 of
$1,080 to $1,140 per ounce and all-in-sustaining
costs1,2 ("AISC") of $1,330 to $1,415
per ounce of gold sold. Guidance does not include production from
the Mercedes Mine as the previously announced sale is expected to
close around the end of the first quarter of 2022. Equinox
Gold's Chairman, Ross Beaty, and
CEO, Christian Milau, will host a
corporate update today starting at 7:30 am
PT (10:30 am ET). Further
details are provided at the end of this news release.
Christian Milau, CEO of Equinox
Gold, commented: "Our 2022 guidance represents the fourth
consecutive year of production growth at Equinox Gold and includes
production that will come from our new Santa Luz mine in
Brazil, which has commenced
commissioning. Production is forecast to increase quarter over
quarter, with 60% of gold production and more than 85% of operating
cash flow anticipated in the second half of the year.
"We continue to advance toward becoming a million-ounce producer
by investing in our producing assets and bringing new mines to
production. Our 2022 cost estimates reflect $195 million of sustaining capital investment in
our mines as well as inflationary pressures occurring
industry-wide, including significant increases to fuel and other
consumables. Our key focus for 2022 is construction at our
Greenstone project in Ontario,
with a budget of $326 million for construction capital."
2022 Guidance and Outlook
|
Production
(ounces)
|
Cash
Costs1
($/ounce)
|
AISC1,2
($/ounce)
|
Sustaining
Capital1,3
|
Non-sustaining
Capital1,4
|
Mexico5
|
Los Filos
|
160,000 -
180,000
|
$1,400 -
$1,475
|
$1,625 -
$1,700
|
$38 M
|
$62 M
|
USA
|
Mesquite
|
120,000 -
130,000
|
$1,050 -
$1,100
|
$1,450 -
$1,500
|
$52 M
|
$20 M
|
Castle
Mountain
|
25,000 -
35,000
|
$1,150 -
$1,200
|
$1,475 -
$1,525
|
$11 M
|
$9 M
|
Brazil
|
Aurizona
|
120,000 -
130,000
|
$800 -
$850
|
$1,175 -
$1,225
|
$50 M
|
$8 M
|
Fazenda
|
60,000 -
65,000
|
$975 -
$1,025
|
$1,200 -
$1,250
|
$14 M
|
$11 M
|
RDM
|
70,000 -
80,000
|
$1,200 -
$1,250
|
$1,350 -
$1,400
|
$11 M
|
$18 M
|
Santa Luz
|
70,000 -
90,000
|
$825 -
$925
|
$975 -
$1,050
|
$19 M
|
$32 M
|
Canada
|
Greenstone
|
-
|
-
|
-
|
-
|
$326 M
|
Total –
Mines6
|
625,000 -
710,000
|
$1,080 -
$1,140
|
$1,330 -
$1,415
|
$195
M
|
$487
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 2022 AISC include a rate of BRL 5.00 to USD 1 and
MXN 19.0 to USD 1.
|
3. Sustaining capital
includes ARO (asset retirement obligation) amortization, accretion
and sustaining exploration expenditures.
|
4. Non-sustaining
capital includes non-sustaining exploration
expenditures.
|
5. Does not include
the Mercedes Mine, which is expected to be sold in Q1 2022.
Production and costs for Mercedes prior to the sale will be
attributable to Equinox Gold.
|
6. Group total is the
sum or average of the individual mine-level amounts. Numbers may
not sum due to rounding.
|
Production is expected to increase quarter over quarter and, as
production increases, AISC will decrease. Cash costs and AISC
are expected to be approximately $1,210 and $1,540
per ounce in H1 2022 and $1,025 and
$1,295 per ounce in H2 2022,
respectively. The weighting of production and cash flow into the
second half of the year is primarily due to the Santa Luz mine
transitioning from construction and commissioning to operations
starting in Q2 2022. Production and cost guidance excludes the
Mercedes Mine as the previously announced sale to Bear Creek Mining
is expected to close around the end of Q1 2022, although ounces
produced and capital spent prior to closing will be attributable to
Equinox Gold.
Cash costs for 2022 reflect inflationary pressures across all
operations, with approximately 15% cost escalation for fuel and
other major consumables. AISC for 2022 includes $195 million of sustaining capital investment
focused primarily on stripping campaigns at the Mesquite, Aurizona
and Santa Luz mines to open up new ore sources and both open-pit
stripping and underground development work at Los Filos that was in
part delayed during 2021. The Company is also completing tailings
storage facility ("TSF") expansions or lifts at Aurizona, RDM and
Santa Luz and completing a leach pad expansion at Castle
Mountain.
The Company is undertaking several growth projects during 2022
including completing construction and commissioning of the Santa
Luz mine, advancing construction of the Greenstone project, and
conducting exploration focused on mine life extension at Mesquite,
Aurizona, Fazenda, Santa Luz and RDM. Non-sustaining capital also
includes underground development at Los Filos in part carried over
from 2021, a pit expansion at RDM and permitting for the Castle
Mountain expansion.
The Company may revise guidance during the year to reflect
changes to expected results.
Los Filos Gold Mine, Mexico
Los Filos production for 2022 is estimated at 160,000 to 180,000
ounces of gold. While Los Filos costs are expected to be lower in
the second half of the year, waste stripping campaigns in the Los
Filos and Guadalupe open pits and underground development for
Bermejal will impact AISC and free cash flow for the year. Los
Filos cost guidance for 2022 is estimated at cash costs of
$1,400 to $1,475 per ounce, with AISC of $1,625 to $1,700
per ounce sold.
The Company continues to review the potential to construct a new
carbon-in-leach plant to operate concurrently with the existing
heap leach operation, which could increase production and lower
costs, but does not expect to make a construction decision until
the majority of Greenstone expenditures are complete and the
current stability with local communities allows operations to
continue without interruption.
Capital investments at Los Filos during 2022 are focused
primarily on open-pit stripping and underground development, with
almost $30 million of expenditures
carried over from 2021. AISC at Los Filos in 2022 includes
$38 million of sustaining capital, with $13 million allocated for capitalized stripping
of the Guadalupe open pit, $7 million
for development of the Los Filos underground mine, $10 million for fleet refurbishment and
processing equipment and $4 million
for exploration.
Non-sustaining growth capital of $62
million includes $23 million
for stripping of the Los Filos open pit, $24 million for
Bermejal underground development and $14
million for fleet rebuilds and new equipment.
Mesquite Gold Mine, USA
Mesquite production for 2022 is estimated at 120,000 to 130,000
ounces of gold, with approximately 60% of production coming in the
second half of the year. Cash costs are estimated at $1,050 to $1,100
per ounce and AISC at $1,450 to
$1,500 per ounce sold.
AISC at Mesquite in 2022 includes sustaining capital of
$52 million related primarily to a $44
million stripping program to open up the new VE2 pit, which
will be the primary source of ore in Q4 2022 and into 2023.
Non-sustaining growth capital of $20
million includes $5 million
for exploration with the objective of converting resources to
reserves in the Brownie, VE2 and Rainbow pits. The Company is also
permitting and planning the construction of extensions to the leach
pad and will make $12 million in
lease payments for the truck fleet.
Castle Mountain Gold Mine, USA
Castle Mountain production for 2022 is estimated at 25,000 to
35,000 ounces of gold with cash costs of $1,150 to $1,200
per ounce and AISC of $1,475 to
$1,525 per ounce sold.
Costs at Castle Mountain will increase primarily as the result
of the decision to crush and agglomerate ore to increase ore
permeability and gold production. AISC for 2022 includes
$11 million of sustaining capital,
with $3 million allocated for plant modifications and
$7 million for the current leach pad
expansion that will accommodate the entirety of Phase 1
operations.
In 2021 Equinox Gold completed a feasibility study for a
proposed Phase 2 expansion of Castle Mountain that is expected to
increase average production to more than 200,000 ounces of gold
annually. Non-sustaining growth capital of $9 million at Castle Mountain in 2022 includes
$7 million for Phase 2 permitting,
optimization studies and metallurgical test work, and nearly
$2 million for exploration. The
Company expects to submit Phase 2 permit applications in Q1
2022.
Aurizona Gold Mine, Brazil
Aurizona production for 2022 is estimated at 120,000 to 130,000
ounces of gold with cash costs of $800 to $850 per
ounce and AISC of $1,175 to
$1,225 per ounce sold.
AISC at Aurizona in 2022 includes $50 million of sustaining
capital allocated primarily to $19
million in capitalized waste stripping, $18 million to construct a new TSF and increase
capacity of the existing TSF and $8
million for infrastructure including installation of a new
pebble crusher. With fresh rock feed increasing to 30% in 2022, the
pebble crusher will help to maintain processing capacity.
Non-sustaining growth capital at Aurizona of $8 million is allocated almost entirely to
exploration.
During 2021 Equinox Gold completed a pre-feasibility study for a
potential expansion at Aurizona to extend the mine life and
increase annual production by mining new underground and satellite
open-pit deposits concurrently with the existing open-pit mine. The
Company will initiate permitting for an exploration portal,
undertake some underground-focused exploration and continue to
advance internal studies related to the expansion in 2022.
Development work to access the underground deposit could begin in
late 2022.
RDM Gold Mine, Brazil
RDM production is expected to increase almost 30% compared to
2021 as the result of modifications to the pit design based on a
new geotechnical model. Production for 2022 is estimated at 70,000
to 80,000 ounces of gold. Cash costs are estimated at $1,200 to $1,250
per ounce and AISC at $1,350 to
$1,400 per ounce sold.
AISC at RDM in 2022 includes $11
million of sustaining capital of which $9 million relates to increasing capacity of the
TSF and installing a tailings thickener to reduce water
consumption. Non-sustaining growth capital of $18 million
relates primarily to capitalized stripping for a pushback of the
open pit, with $3 million allocated
for exploration.
Fazenda Gold Mine,
Brazil
Fazenda production for 2022 is estimated at 60,000 to 65,000
ounces of gold, with cash costs estimated at $975 to $1,025 per
ounce and AISC at $1,200 to
$1,250 per ounce sold.
Of the $14 million sustaining
capital investment planned for 2022, $6
million is allocated for underground development,
$3 million for open-pit waste stripping, $2 million for exploration to upgrade inferred
resources and $2 million for engineering, plant maintenance
and equipment. Non-sustaining growth capital of $11 million
includes $4 million for underground
development and $3 million for
exploration.
In addition, the Company has planned a significant exploration
program in the Fazenda-Santa Luz district, a 70-km-long greenstone
belt that hosts both the Fazenda and Santa Luz mines. The 2022
Bahia exploration program includes a $1.5
million airborne geophysical survey that will cover the
entire belt and greatly aid in the development of new targets and
more than 50,000 metres of drilling targeting high priority
near-mine and regional targets. Of the total $9 million non-sustaining capital spend,
$4 million has been budgeted to
Fazenda with the remainder budgeted to Santa Luz.
Santa Luz Gold Project, Brazil
Equinox Gold commenced construction of Santa Luz on November 9, 2020, with a construction capital
budget of $103 million. The project
remains on schedule and on budget, with approximately
$27 million of non-sustaining construction capital remaining
to be spent in 2022. Santa Luz production for 2022, including gold
produced before commercial production, is estimated at 70,000 to
90,000 ounces of gold with cash costs of $825 to $925 per
ounce and AISC of $975 to
$1,050 per ounce sold.
AISC at Santa Luz in 2022 includes $19
million of sustaining capital of which $11 million relates to open-pit stripping and
$4 million for a TSF lift.
Greenstone Gold Project, Canada
Equinox Gold acquired a 60% interest in the Greenstone Gold
project in April 2021 and commenced
construction in Q4 2021, with first gold pour targeted for H1 2024.
Over the life of the mine, total production is estimated at more
than 5 million ounces of gold, or approximately 360,000 ounces per
year over the initial 14-year mine life, of which 60% is
attributable to Equinox Gold.
The project has a construction budget of $1.23 billion (C$1.53
billion) on a 100% basis, with Equinox Gold funding 60%. For
2022 construction at the Greenstone project, Equinox Gold expects
to fund $326 million. Construction
activities will be focused on the process plant, repositioning of
existing infrastructure, installation of new infrastructure and
mobile equipment, water and tailings management, power and
electrical.
Corporate
Corporate costs for 2022 are expected to be approximately
$35 million or $50 per ounce of gold sold using the mid-range of
production guidance. Corporate costs are not included in cash cost
or AISC guidance and exclude discretionary equity-linked
compensation.
Mineral Reserves and Resources
Equinox Gold expects to provide an update of Mineral Reserves
and Mineral Resources in Q3 2022.
Corporate Update
Equinox Gold's Chairman, Ross
Beaty, and CEO, Christian
Milau, will host a corporate update today commencing at
7:30 am PT (10:30 am ET). The update will be held via
webcast so that all participants can 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. The
webcast will be archived on Equinox Gold's website until
July 25, 2022.
Webcast
www.equinoxgold.com
Conference call
Toll-free in U.S. and Canada: 1-800-319-4610
International callers: +1 604-638-5340
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 growth-focused Canadian mining company
operating entirely in the Americas, with seven operating gold mines
(including Mercedes) and a clear path to achieve more than one
million ounces of annual gold production from a pipeline of
development and expansion projects. Equinox Gold's common shares
are listed on the TSX and the NYSE American under the trading
symbol EQX. Further information about Equinox Gold's portfolio of
assets and long-term growth strategy is available at
www.equinoxgold.com or by email at ir@equinoxgold.com.
Cautionary Notes and Forward-looking
Statements
Non-IFRS Measures
This document refers to mine cash costs/oz, all-in sustaining
costs ("AISC")/oz, sustaining and non-sustaining capital
expenditures that are measures with no standardized meaning under
International Financial Reporting Standards ("IFRS") and may not be
comparable to similar measures presented by other companies. Their
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, 2021, for a more
detailed discussion of these non-IFRS measures and their
calculation. 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 strategic vision for the Company and expectations
regarding exploration potential, production capabilities and future
financial or operating performance; the Company's ability to
achieve the production and cost guidance outlined for 2022; the
Company's ability to successfully advance its growth and
development projects, including the construction and commissioning
of Santa Luz, the construction of Greenstone, the expansions at Los
Filos, and Aurizona, and the expansion and permitting of Castle
Mountain; and completion of the sale of the Mercedes Mine.
Forward-looking statements or information generally identified by
the use of the words "will", "may", "anticipate", "expects",
"expected", "advancing", "clear path", and similar expressions and
phrases or statements that certain actions, events or results
"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: Equinox Gold's ability to achieve the
production, cost and development expectations for its respective
operations and projects; prices for gold remaining as estimated;
currency exchange rates remaining as estimated; construction at
Santa Luz and Greenstone being completed and performed in
accordance with current expectations, expansion projects at Los
Filos, Castle Mountain and Aurizona being completed and performed
in accordance with current expectations; 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; the Company's working history
with the workers, unions and communities at Los Filos; that all
necessary permits, licenses and regulatory approvals are received
in a timely manner; the Company's ability to comply with
environmental, health and safety laws; and the consummation and
timing of the Mercedes sale. 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; a
successful relationship between the Company and Orion; and those
factors identified in the Company's MD&A dated March 19, 2021 and its Annual Information Form
dated March 24, 2021, both of which
relate to the year-ended December 31,
2020, and in the Company's MD&A dated November 3, 2021 for the three and nine months
ended September 30, 2021, 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.