Equinox Gold Ord Shs T.EQX

RE:RE:How are they going to pay for Greenstone?

[marketdiva]

Partypanther21 wrote:

I don't think you're far off that it's a major risk. Fortunately, Santa Luz spend is basically done now which is huge.(knock on wood). Getting that mine ramped up is very important because it's supposed to have such lower AISC. The market is likely nervous that EQX hasn't announced commercial production or even given a revised timeline of when that might be. Because the technology is somewhat unique (to my understanding) a lot of investors will be wary of the stock until results come out on AISC and the mine is in commercial production providing FCF to pay for Greenstone.

Now for Greenstone, The costs are spread out pretty decently over a number of years which helps because FCF from operations should help them maintain a decent cash balance. It also doesn't help that we don't know what their expected AISC costs are next year for all their assets (I would expect them to be lower than this year because of Santa Luz and hopefully more stability at the mine sites. In terms of cost overrun potential, of course it is possible a cost overrun happens, but with the massive $177M contingency (14% I believe), the revised estimate with secured quotes and the ability to lease the trucks to defer capital, the $1.2 billion is more like $1.1 billion total USD with a lot of wiggle room. That's $700M for EQX share which is a lot of money, but definitely doable.

if gold drops below long term trend and there is a major recession, then that would be really bad. 

i thought throughout history the major gold rallies occurre during stagflation bear market / recessions ....so why would we not want that ?