RE:RE:RE:RE:RE:Fair Market Value significantly higher You’re right about EQX’s volatility being tied to its All-In Sustaining Costs (AISC). High AISC producers like EQX are really sensitive to gold price changes, which can majorly impact their profits. For those who are new to this, AISC includes all the costs associated with sustaining current gold production, such as operating costs, capital expenditures, and admin expenses.
Currently, EQX has an AISC around $1,900 per ounce, making it more vulnerable to gold price changes, leading to more volatility.
For 2024, EQX expects its AISC to be between $1,630 and $1,740 per ounce. This increase is due to higher costs at mines like Castle Mountain and Los Filos. These costs are driven by factors like the stronger Mexican Peso and Brazilian Real, which offset some lower input costs.
To lower its AISC, EQX is taking several steps:
1. Greenstone Project: Investing in this project to lower production costs. Expected to produce gold at $840-$940 per ounce once it ramps up in 2024.
2. Operational Efficiencies: Improving mining and plant operations to boost productivity and reduce waste.
3. Cost Management: Controlling costs and using hedging strategies to handle rising expenses better.
4. Expansion: Advancing projects like Castle Mountain Phase 2 and Aurizona underground expansion to access higher-grade ore.
5. Investment in Sustainability: Spending on essential infrastructure like equipment and tailings storage to ensure long-term cost stability.
If EQX can lower its AISC to the projected range, it would significantly reduce its sensitivity to gold price changes. For instance, with a lower AISC of $1,630, EQX would lose about 16% of its profits if gold drops by $100, instead of the 25% loss at a higher AISC.
These steps are aimed at making EQX more stable and less volatile.