Equinox Gold Corp. [EQX-TSXV; EQXGF-OTC] on Friday August 3 said construction is proceeding on schedule, and it hopes to achieve the first gold pour at its Aurizona Mine in Brazil before the end of 2018. The overall project was 60% complete and plant construction was 51% complete at the end of June, 2018, the company said.
The Aurizona update is contained in second quarter financial results that were released on Friday.
Led by financier Ross Beaty, Equinox Gold is a well-funded, multi-asset company. Its portfolio includes the wholly-owned, past-producing Aurizona Gold Mine, and wholly-owned past-producing Castle Mountain gold mine in California.
The company’s primary focus is on completing construction and achieving production at Aurizona, where average annual production is forecast to be over 136,000 ounces. The company also recently competed a prefeasibility study for Castle Mountain with the objective of commissioning Phase 1 production by the end of 2019.
During the quarter, the company spent $21.9 million on construction activity at Aurizona, bringing the amount spent during the last four quarters to $63.5 million. With a construction budget of $146 million, the remaining project capital will be funded by cash and marketable securities of $65.5 million, receivables of more than $12 million, and $30 million of undrawn construction debt financing.
Meanwhile, the company’s exploration team is focused on mine life extension and district-scale opportunities. During the quarter, the company announced that an initial drill program is underway at Tatajuba, the western extension of the main Piaba Trend that hosts Aurizona.
The Tatajuba target measures over 4 km in length as defined by coherent gold-in-soil anomalism, geophysics, auger drilling and limited diamond drilling. The company said the initial 2,000-metre drill program focused on an approximately 600 metre-long portion of the trend where historical drilling intersected significant shallow gold mineralization.
Other district scale targets will be tested with upcoming exploration programs and a study is underway, examining opportunities to develop the underground potential of the Aurizona gold deposit, the company said.
“Drill results from more than 15,000 metres of drilling in 2017 at the Piaba and Piaba West targets are being incorporated in a resource update that is targeted for completion in the third quarter of 2018,” Equinox said.
Meanwhile, the company said it spent $1.7 million on exploration and related technical activities during the second quarter to support the completion of a prefeasibility study at Castle Mountain. The company released the results of the prefeasibility study on July 16, 2018, contemplating a low-cost heap leach mine that will produce 2.8 million ounces of gold and generate $865 million in after-tax cash flow over a 16-year mine life.
The 2.8 million estimate includes annual production of over 45,000 ounces over the first three years and 203,000 ounces annually from years four to 16. Life-of-mine all-in sustaining costs are forecast at $763 an ounce, which is in the lowest quartile in the industry.
Initial capital for phase one construction is estimated at $52 million. The estimate for phase two is estimated at $295 million.
Equinox shares advanced on the update, rising 4% or $0.04 to $1.04 on Friday. The 52-week range is $1.39 and 88 cents.