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Record Q3: Equinox Gold achieves commercial production at Greenstone Mine

Jonathon Brown Jonathon Brown, The Market Online
0 Comments| November 7, 2024

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  • Equinox Gold’s (TSX:EQX) Greenstone Mine in Ontario has officially reached commercial production as of October
  • The company produced 173,983 ounces of gold and sold 173,973 ounces at an average realized price of $2,461 per ounce
  • This was a record quarter for Equinox Gold, with best-ever Q3 production and all-time highest quarterly revenue and adjusted EBITDA
  • Equinox Gold stock (TSX:EQX) last traded at C$7.25

Equinox Gold’s (TSX:EQX) Greenstone Mine in Ontario has officially reached commercial production as of October. This milestone marks a significant achievement for the company, which has been ramping up operations at the site.

During Q3 2024, the Greenstone Mine processed an average of 14,300 tonnes per day (tpd), achieving 53 per cent of its design throughput. The mine produced 42,400 ounces of gold at an average recovery rate of 79 per cent, with cash costs reported at US$930 per ounce. Notably, the quarter included three multi-day shutdowns to address operational issues identified during the ramp-up phase.

As operations progressed into October, throughput steadily improved. By November 5th, the trailing 20-day throughput averaged over 20,400 tpd, representing 76 per cent of design capacity. The crushing and grinding circuits have demonstrated the ability to operate at full production rates of 27,000 tpd, with crushing capabilities exceeding 32,000 tpd. Daily gold recovery rates have reached highs of over 90 per cent, averaging 78 per cent throughout October. The current focus for Equinox Gold is on enhancing plant availability and recovery rates.

Once fully operational, the Greenstone Mine is projected to be one of Canada’s largest and highest-grade open-pit gold mines, with an expected average production of 390,000 ounces of gold per year for the first five years and 330,000 ounces annually over an initial mine life of 15 years.

“With the Greenstone Mine continuing to ramp up and generating positive operating cash flow, we are pleased to announce commercial production at our newest and largest gold mine,” Greg Smith, president and CEO of Equinox Gold, commented in a news release. “This milestone marks the culmination of three years of construction and commissioning, accomplished during the challenges of a global pandemic, supply chain disruptions, and inflationary pressures. I extend my thanks and congratulations to the Greenstone team for their dedication and perseverance in achieving this milestone.”

Q3 2024 financial and operating results

Equinox Gold simultaneously released its financial results for Q3 2024:

  • Gold production: The company produced 173,983 ounces of gold and sold 173,973 ounces at an average realized price of $2,461 per ounce.
  • Cost metrics: Total cash costs were reported at $1,720 per ounce, with an all-in sustaining cost (AISC) of $1,994 per ounce. The company recorded two lost-time injuries, resulting in a total recordable injury frequency rate of 1.79 per million hours worked for the rolling 12-month period.
  • Earnings: Equinox Gold reported an income from mine operations of $101.4 million, with a net income of $0.3 million or $0.00 per share. Adjusted net income stood at $37.4 million, equating to $0.09 per share.
  • Cash flow: The company generated $130.1 million in cash flow from operations before changes in non-cash working capital, and $139.5 million after adjustments.
  • Financial position: As of September 30, 2024, Equinox Gold held $167.8 million in cash and cash equivalents, with a net debt of $1,314.7 million. In October, the company converted $140 million in convertible notes to shares, effectively reducing its net debt.

“This was a record quarter for Equinox Gold, with our best-ever Q3 production and all-time highest quarterly revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), reflecting the ongoing ramp-up at our Greenstone Mine and strong gold prices,” CEO Smith said in a release on these figures. “During Q3, the Greenstone Mine demonstrated good progress, with both mining and processing rates increasing substantially. Subsequent to quarter-end, mining and milling rates have continued to increase and we were pleased to declare commercial production at Greenstone earlier today. The team remains focused on continuing this momentum through the fourth quarter as the mine progresses toward design capacity.”

Updated 2024 guidance

Equinox Gold recently updated its production guidance for the Greenstone Mine, now projecting 110,000-130,000 ounces of gold for the year, down from the previous estimate of 175,000-205,000 ounces. Cash costs are expected to range between $850-$950 per ounce, with all-in sustaining costs adjusted to $1,050 to$1,150 per ounce. The company has also revised its consolidated production guidance to 590,000-675,000 ounces of gold, reflecting the ongoing ramp-up and operational adjustments.

Investors will find out more when the company holds its conference call and webcast at 7:30 am PT (10:30 am ET) Thursday to discuss these results.

Vancouver-based Equinox Gold Corp. is a mining company with projects in Canada, the U.S., Mexico, and Brazil.

Equinox Gold stock (TSX:EQX) last traded at C$7.25 and has risen 6.13 per cent since the year began.

Join the discussion: Find out what everybody’s saying about this stock on the Equinox Gold Bullboard, and check out the rest of Stockhouse’s stock forums and message boards.

The material provided in this article is for information only and should not be treated as investment advice. For full disclaimer information, please click here.

(Top image via Equinox Gold.)



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