Equinox keeps lid on Greenstone costs, appoints new CEO

5th August 2022 By: Mariaan Webb - Creamer Media Deputy Editor Online

Canadian miner Equinox Gold is making good progress on construction at its Greenstone project, in Ontario, which is now 35% complete and remains on schedule for completion in 2024.

Despite inflationary pressures sweeping through the mining industry, Equinox has managed to control costs at the C$1.2-billion project.

The miner will spend more in 2022 on plant and mill buildings in part owing to steel price inflation, but these increases have been offset by cost reductions in other areas, keeping the overall construction budget intact.

“The team has done an exceptional job to control costs in this inflationary environment and is on track to have the majority of buildings enclosed by year-end, which is key to maintaining productivity during the winter months,” says outgoing CEO Christian Milau.

When Greenstone comes into production, it will contribute to a big jump in production for Equinox, which has a goal of being an American million-ounce producer. The new mine will produce more than 200 000 oz/y of low-cost production once it has ramped up to full capacity.

While the Greenstone construction budget has come off unscathed from inflation pressures, Equinox’s guidance for 2022 did not. Disruption to mining and operations at RDM, a longer-than-expected ramp-up at Santa Luz that has prolonged pre-commercial production and further inflation of 6% on a consolidated basis led to an updated 2022 production and cost guidance.

The total consolidated guidance for 2022 is 550  000 oz to 615 000 oz at a cash cost of $1 200/oz to $1 250/oz and an all-in sustaining cost (AISC) of $1 470/oz to $1 530/oz. This compares with the original guidance of 625 000 oz to 710 000 oz of gold at a cash cost of $1 080/oz to $1 140/oz and an AISC of $1 330/oz to $1 415/oz.

In the second quarter, Equinox produced 120 813 oz at an AISC of $1 657/oz. The firm reported a net loss of $78.7-million, and an adjusted net loss of $47.9-million.

Meanwhile, Equinox appointed Greg Smith as its CEO, taking over from founding shareholder and executive Milau, who is pursuing an opportunity in the global carbon finance industry.

“Smith has been president of Equinox since we founded the company in 2017 and has always been considered the designated successor when Christian retired. Greg brings the right corporate knowledge, industry experience and skill set to effectively manage current operations and advance our long-term strategy. He has the full support of the board and the executive team, and I look forward to working with him as we focus on achieving our vision of being the premier Americas million-ounce gold producer,” said chairperson Ross Beaty.

"On behalf of the board, I thank Christian for his leadership over the last six years. Christian has led the team through two mergers and three acquisitions, growing the company from a single-asset developer to a diversified, multi-mine gold producer with one of the industry's strongest growth profiles. His commitment to responsible mining, collaborative relationships and providing meaningful benefits to both our workforce and our community partners leaves an enduring legacy that we will continue to uphold. We wish him the best of success in his new endeavour,” he added.