Equinox generates record gold production in Q2

Pit operations at Equinox Gold’s Mesquite gold mine in California. Credit: Equinox Gold.

In the second quarter, Equinox Gold (TSX: EQX; NYSE-AM: EQX) produced a total of 127,016 oz. gold at all-in sustaining costs (AISCs) of US$900 per oz. sold, from six mines in the Americas.

Despite the Covid-19 pandemic, Equinox still recorded its highest quarterly gold production in the quarter.

The company has also provided updated guidance for the year, due to the pandemic. It now expects to produce 470,000-530,000 oz. gold at AISCs of US$975-$1,025 per ounce. This compares with its prior guidance of 540,000-600,000 oz. at AISCs of US$1,000-$1,060 per oz., issued in March, following the closing of the Leagold acquisition. The most recent guidance reflects updated costs and exchange rate assumptions.

Government-mandated suspensions affected the Los Filos as well as Fazenda and Pilar mines in Mexico and Brazil, respectively. In the second quarter, the Mesquite heap leach operation in California contributed 36,842 oz. to the company’s total, while the Aurizona open pit in Brazil churned out 32,091 ounces. Both operations outperformed internal expectations.

“All of our mines are now operating normally with enhanced testing and safety protocols, and we remain focused on protecting the health and economic wellbeing of our workforce and local communities while continuing to safely operate our mines,” Christian Milau, the company’s CEO, said in a news release.

Equinox recorded cash flow from operations of US$83.7 million (after changes in working capital) as well as temporary care, maintenance and ramp-up costs of US$16 million due to the coronavirus pandemic. With earnings from mine operations of US$85.1 million, the company closed out the quarter with US$494.1 million in unrestricted cash and equivalents.

“We look forward to achieving important milestones at a number of projects over the second half of 2020, including first production at Castle Mountain, the start of construction of the Los Filos expansion and Santa Luz restart projects, and continued exploration across our portfolio of mines,” Milau said.

On the development front, the first phase of the construction of the Castle Mountain heap leach operation in California is almost complete, with the first gold pour expected in the fourth quarter. At the past-producing Santa Luz project in Brazil, Equinox is finalizing costs and engineering work ahead of an upcoming construction decision. A prefeasibility study has also started to evaluate the potential to develop the underground portion of Aurizona.

The company has also started routine Covid-19 testing at its sites to proactively identify any carriers of the virus.

— This article first appeared in the Canadian Mining Journal.


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