Equinox Gold nearing end of Greenstone build

"The Greenstone development is going fantastic," Equinox Gold VP investor relations Rhylin Bailie told Mining Journal at the 2023 Precious Metals Summit in Beaver Creek, Colorado, US.

Bailie said the project is 90% complete, with the process plant nearing readiness to start wet commissioning at year-end.

Recent milestones have included switching from grid power to the on site natural gas powerplant, installing the conveyors, and substantially completing the crushing and HGPR circuits.

"We are tracking really well; the big spends are behind us, and we are through the peak of the capital spending. We are starting to mine ore and want a stockpile of 800,000t by year-end and 2Mt by the end of the first half of next year," said Bailie.

The US$1.23 billion Greenstone project will produce more than 400,000ozpa over the first five years of its life and more than 5Moz over its initial 14-year mine life. 2024.

Bailie said several factors have enabled the company to keep the Greenstone development on track at a time when other mine builds in Ontario have been unable to do so.

"We had 85% detailed engineering completed before we started, which meant there has been very little scope change, especially in the earthworks. We started the build in 2021, so we were not as blindsided by inflation as those who began building in 2020 were. We also are not using an EPCM model but an integrated team with the contractor G Mining, which means one project manager, one accounting team, and so on, which streamlined the project and kept costs down. There is a lot of duplication in the EPCM model," she said.

Capital

Equinox has also turned a corner for its balance sheet, ending the June quarter with $170 million in cash with its share of the remaining capital spend at $170 million.

"We are funded through to project completion. We are generating cash flow from seven mines, we have a $100 million accordion feature on our revolving credit facility, we have equity investments in several companies worth $140 million, and we put an at-the-market equity raising facility in place," said Bailie.

Once Greenstone begins cash-flowing in the second semester of 2024, Equinox will decide how aggressively it wants to pay down its debt, although this will be balanced by its need to fund its future pipeline of capital projects.

A delay to the permitting of the expansion of its Castle Mountain gold mine in California, to take production from 20-30,000ozpa 200,000ozpa, until into 2025, gives the company some breathing space to perhaps pay down more debt and/or build up its cash reserves.

In the interim, the company aims to advance on work at Aurizona in Brazil. "We have permits to do the underground portal development, which will start in 2025. The exploration decline will enable us to do bulk sampling, and we will develop it so that it will serve as the mine decline," said Bailie.