VANCOUVER, BC, Nov. 9, 2020 /CNW/ – Equinox Gold Corp. (TSX: EQX) (NYSE American: EQX) (“Equinox Gold” or the “Company”) is pleased to announce Board of Directors approval to commence full construction of the Company’s 100% owned Santa Luz Gold Mine (“Santa Luz” or the “Project”) located in Bahia State, Brazil, with an approved construction budget of $103 million. Using the base case $1,500/oz gold price, Santa Luz is expected to produce 903,000 ounces (“oz”) of gold and generate $436 million in after-tax net cash flow over an initial 9.5-year mine life from 1.1 million oz of open-pit gold Mineral Reserves (a breakdown of Mineral Reserves and Mineral Resources is provided in tables below), with additional upside from underground Mineral Resources. At $1,500/oz gold, the Project has an after-tax net present value discounted at 5% (“NPV5%“) of $305 million with an internal rate of return (“IRR”) of 58%.
HIGHLIGHTS
- After-tax NPV5% of $305 million at base case $1,500/oz gold
- After-tax IRR of 58% at $1,500/oz gold
- $436 million after-tax life-of-mine (“LOM”) cumulative net cash flow
– $69 million average annual EBITDA (LOM)
– $57 million average annual net cash flow (LOM) - $877/oz average LOM all-in sustaining costs (“AISC”)
- 903,000 oz LOM gold production at an average recovery of 84%
– 110,500 oz average annual gold production 2022 – 2026
– 95,000 oz average annual gold production (LOM) - 1.1 million oz of Proven and Probable Mineral Reserves grading 1.34 grams per tonne (“g/t”) gold
- $103 million initial capital costs with payback in less than two years
- $21 million LOM sustaining capital costs (excluding capitalized stripping)
- 9.5-year initial mine life with expansion potential from underground development
- First gold pour targeted for Q1 2022
Christian Milau, CEO of Equinox Gold, stated: “We continue to deliver on our sector-leading growth by launching into full construction at Santa Luz, after pouring first gold at our Castle Mountain Mine less than a month ago and first gold at our Aurizona Mine only 15 months ago. With initial capital of only $103 million, Santa Luz is fully funded and will start contributing significant cash flow to the Company in just over one year’s time. We are also excited to recommence exploration in the highly prospective Santa Luz-Fazenda district, the 70-kilometre-long greenstone belt that extends between our two mines in Bahia State, Brazil.”
OVERVIEW
As a brownfields past-producing mine, the majority of site services and infrastructure is already in place at Santa Luz. The initial capital costs to restart the mine include refurbishing existing infrastructure, retrofitting the plant, installing additional grinding power and increasing the storage capacities of the existing tailings and water storage facilities. Open-pit stripping is expected to begin in February 2021. Modifications and upgrades to the processing plant and tailings and water storage facilities are expected to be finished by the end of 2021, with first gold pour targeted for Q1 2022.