Equinox Gold’s Greenstone mine reaches commercial production

Equinox Gold‘s (TSX: EQX; NYSE: EQX) Greenstone mine has officially reached commercial production following the operating progress it achieved through October, the Canadian miner announced this week.

The mine located near Geraldton, Ont., opened in late August, about three months after pouring its first gold on schedule.

“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,” Greg Smith, Equinox Gold CEO said in a Nov. 6 release.

At full production, the Greenstone mine will be one of Canada’s largest and highest-grade open-pit gold mines, producing on average 390,000 oz. of gold per year for the first five years and 330,000 oz. of gold annually over its initial 15-year mine life.

Lowered 2024 guidance

Initially, Greenstone’s 2024 gold production was forecasted at 175,000-205,000 oz., with Equinox targeting 90% of the 27,000 tonne-per-day plant capacity by year-end.

However, during the third quarter, the mine had been processing ore at only 53% of the design throughput (14,300 tonnes per day) due to three multi-day shutdowns to address issues identified in the ramp-up process. The resulting quarterly production came to 42,400 oz. of gold at an average recovery rate of 79% and a cash cost of US$930 per ounce.

With production falling behind, the company last month adjusted Greenstone’s 2024 gold production guidance to 110,000-130,000 oz., representing a near 37% decrease. In the fourth quarter, Equinox intends to continue the ramp-up of both mining rates and plant throughput towards design capacity.

Throughput steadily increased through October and, as of Nov. 5, the trailing 20-day throughput averaged over 20,400 tonnes per day, representing 76% of design, the miner said.

Q3 results

Across all eight of its operations across the Americas, Equinox reported that gold production for the latest quarter was 173,983 oz., which was its best third quarter ever. This also helped to generate all-time highs in quarterly revenue and adjusted EBITDA, at US$428.4 million and US$141.9 million respectively.

For the whole year, the company is anticipating consolidated gold production to be between 590,000 and 675,000 oz., with the fourth quarter expected to be its strongest three-month period.

By mid-day on Thursday, Equinox shares had gained 5.5% to $7.65 apiece, within a 52-week range of $5.36-$8.79. The company’s market capitalization stands at $3.2 billion.