Equinox Gold’s (TSX: EQX; NYSE-AM: EQX) Castle Mountain mine in California has declared commercial production. The open-pit, heap leach operation poured its first gold on Oct. 15 and is expected to generate 5,000 to 10,000 oz. of gold for the company this year. The company completed construction of the asset in mid-September.
In its first, 12,700 tonne per day phase, Castle Mountain will churn out approximately 40,000 gold oz. annually. The miner is looking at an expansion of this asset, which could grow its output to 200,000 oz. a year – a feasibility study is expected in the first quarter of next year. This study will look at a 41,000 tonne per day run-of-mine heap leach, in addition to a carbon-in-leach milling circuit for higher-grade material.
“Achieving commercial production at Castle Mountain is an important step for what will ultimately be a long-life 200,000 ounce per year gold mine, bringing significant benefits to local communities, the state of California and Equinox Gold’s shareholders,” Christian Milau, Equinox Gold’s CEO, said in a news release.
According to Kerry Smith of Haywood Capital Markets, while the commercial production announcement is ahead of his expectations, the first phase of Castle Mountain is a ‘small’ project, “and the more important matter at hand is resolving the issues surrounding the blockade at Los Filos, and getting that operation back up and running.”
The Los Filos mine has been suspended since Sept. 3, after a road blockade by local community members. While the company recently indicated that the blockade was lifted, preparations to restart mining had to be suspended.
Smith has a ‘buy’ rating on the stock and a $24.5 target, which remain unchanged.
With Castle Mountain, Equinox holds seven operating mines in the Americas. In the third quarter, the company sold 128,437 oz. of gold, at all-in sustaining costs of US$1,035 per ounce.
This article first appeared in the Canadian Mining Journal, part of Glacier Resource Innovation Group.