Equinox Gold sets one million ounce target

Los Filos open pit gold mine 230 km south of Mexico City, Mexico.

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Equinox Gold Corp. [EQX-TSXV; EQXGF-OTC] has released its production forecasts for 2020, saying its gold output will rise sharply following the recent merger with Leagold Mining Corp. in an all-share transaction worth $769.3 million.

The merger is expected to create one of the world’s leading gold producers operating entirely in the Americas.

Equinox said it expects to produce 540,000 to 600,000 ounces of gold this year at an all-in-sustaining cost (AISC) of between US$1,000 and US$1,060 an ounce.

Equinox achieved its 2019 production guidance with total production of 201,018 ounces of gold at mine AISC of US$913 per ounce sold. Production forecasts for 2020 include guidance for the Los Filos, Fazenda, RDM and Pilar mines from March 10, the closing date of the merger with Leagold, to December 31, 2020.

Equinox shares advanced on the news, rising 3.6% or 34 cents to $9.74. The shares are currently trading in a 52-week range of $4.91 and $13.53.

Under the leadership of Chairman Ross Beaty, Equinox Gold has emerged as 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. Equinox struck a deal with New Gold Inc. [NGD-TSX, NYSE American] in September, 2018, enabling it to acquire the Mesquite gold mine in California for $158 million cash.

Leagold established itself as a mid-tier gold producer with a focus on opportunities in Latin America. Its key asset was the Los Filos mine located 230 km  south of Mexico City. The open pit mine started commercial production in 2008.

The combined company has six operating mines in Mexico, Brazil and the U.S., as well as two development projects and two expansion projects.

“Equinox Gold had another year of tremendous growth in 2019. The company advanced its Aurizona Mine to production, commenced construction at its Castle Mountain mine and ended 2019 with the announcement of the merger with Leagold to create a premier gold producer with exceptional growth potential,” said Christian Milau, CEO of Equinox Gold.

“With the merger complete, Equinox Gold expects to more than triple its annualized gold production in 2020 and is fully funded to increase production over the next two years to more than one million ounces of gold annually,” he said.

However, Milau said the company recognizes the challenges presented by the COVID-19 pandemic and its potential effect on its operations and production forecasts for 2020. “If necessary, we will adjust our expectations as the situation evolves,” he said.

Consolidated gold production is expected to increase quarter over quarter during the year, with the fourth quarter benefitting from the addition from Castle Mountain and processing of higher-grade ore at Los Filos.

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