Equinox Gold (TSX: EQX) says its 60%-owned Greenstone gold project in Ontario is over 66% complete, on schedule to pour gold in the first half of 2024, and — most impressively — on budget.
The US$1.2-billion Greenstone project is being developed as a 60:40 partnership by Equinox and Orion Mine Finance Group. The mine is projected to be one of the largest gold mines in Canada, producing more than 400,000 oz. of gold annually for the first five years and more than 5 million oz. of gold over its initial 14-year mine life.
Equinox says that inflationary pressures have been mitigated through offsetting savings opportunities or absorbed through the US$177-million contingency included in the construction budget. To date, 71% of total capital costs has been contracted and US$680 million (55% of the US$1.2 billion construction budget) has been spent. Of the remaining US$550 million left to be spent, 30% of this on a fixed price basis.
The company reports that earthworks are 73% complete, concrete 77% complete, structural steel 62% complete, and the tailings storage facility 47% complete, with the mill 41% complete.
Work that’s been completed include the Ministry of Transportation patrol yard, the diversion of Goldfield Creek, and the permanent effluent water treatment plant. The first four bays of the truck shop are also complete and in use and the 14-km natural gas pipeline is complete and ready for commissioning in second quarter of 2023.
Pre-production mining began ahead of schedule, Equinox says. The first four haul trucks and the first shovel were commissioned during the third quarter of 2022 and mine pre-production activities got underway in September, ahead of schedule, with more than 2.5 million tonnes of material (ore, waste and overburden) excavated to year-end 2022.
“With key equipment on site or en route, building infrastructure is essentially complete and most buildings enclosed and heated, the construction effort is shifting to interior mechanical, electrical and piping installation during the winter months,” said Greg Smith, president and CEO of Equinox Gold in a release. “Detailed commissioning and operation readiness planning is well underway to prepare for first gold pour in the first half of 2024.”
In a note to clients, Haywood Capital Markets mining analyst Kerry Smith continued to recommend the stock, noting the company has grown from a non-producer in mid-2018 to a company with seven operating gold mines and a pipeline of growth projects. “The operations have struggled, and Equinox needs to start hitting their targets to win back investors. With higher-cost production, Equinox is highly leveraged to the gold price,” Smith wrote.
Mining magnate Ross Beaty is chairman, and owns 8% of the company’s shares.
Equinox shares rose 18¢ to $4.86 in afternoon trading for a market capitalization of $1.5 billion. The stock has a 52-week trading range of $2.35 and $9.07.