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Equinox Gold announces positive feasibility study for Castle Mountain Phase 2 expansion

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Global Mining Review,

Equinox Gold Corp. has announced the results of a recent feasibility study for the Phase 2 expansion at its 100%-owned Castle Mountain Gold Mine located in California, USA.

On a standalone basis, Phase 2 is expected to produce 3.2 million oz of gold at average all-in-sustaining costs (AISC) of US$858/oz of gold sold. Using the base case US$1500/oz gold price, Phase 2 has an after-tax net present value of US$640 million (NPV5% discounted at 5% from the start of Phase 2 construction) and an internal rate of return (IRR) of 18%.

Castle Mountain achieved Phase 1 commercial production in November 2020, with expected production of 30 000 to 40 000 oz of gold annually. The current operation consists of a run-of-mine (ROM) heap leach facility placing 12 700 tpd of ore. Phase 2 will expand ROM heap leaching and incorporate milling of higher-grade ore, increasing production to an average of 218 000 oz per year for 14 years followed by leach pad rinsing to recover residual gold. Life-of-mine production including Phase 1 operations and end of mine life rinsing is estimated at 3.4 million oz of gold.

Phase 2 expansion highlights (Phase 2 only at base case US$1500/oz gold, unless otherwise indicated):

  • After-tax NPV5% of US$640 million (US$1.1 billion at US$1800/oz gold).
  • After-tax IRR of 18% (25% at US$1800/oz gold).
  • US$1.3 billion after-tax cumulative net cash flow (US$2.0 billion at US$1800/oz gold).
    • US$114.1 million average annual after-tax net cash flow (US$161.8 million at US$1800/oz gold).
  • US$806/oz average cash costs.
  • US$858/oz average AISC.
  • 218 000 oz average annual gold production.
  • 3.2 million oz total gold production at an overall average recovery of 82%.
    • 1.1 million oz produced from the mill at an average recovery of 94%.
    • 2.1 million oz produced from the heap leach at an average recovery of 67% (74% after final rinsing).
  • US$389 million initial capital costs, excluding US$121 million leased mining fleet.
    • US$510 million if the fleet is purchased up front; NPV5% and IRR assume fleet is purchased up front.
  • US$147 million sustaining capital costs over the Phase 2 mine life.
  • 14-year Phase 2 mine life with expansion potential from exploration, plus two to three years of residual leaching and final rinsing.
  • Total life-of-mine project, including both Phase 1 and Phase 2 operations.
    • 3.4 million oz gold production.
    • 4.2 million oz of Proven and Probable Mineral Reserves grading 0.51 g/t gold.
    • 1.5 million oz of Measured & Indicated Mineral Resources (exclusive of Reserves) grading 0.62 g/t gold.

Christian Milau, CEO of Equinox Gold, comments:

“The Castle Mountain Phase 2 expansion will increase production from the mine to well over 200 000 ounces of low-cost annual gold production and generate nearly US$2 billion of net cash flow at current gold prices. Phase 2 will also provide more than 400 jobs during construction and operations and extend the total mine life to more than 20 years. With Phase 1 in operations and Phase 2 permitting underway, Castle Mountain will be a significant economic driver in the region and a long-life cornerstone asset for Equinox Gold.”

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