Equinox Gold (TSX: EQX; NYSE American: EQX) said on Thursday it is expecting lower-than-forecasted output this year from its new Greenstone gold mine to reflect its ramp-up progress towards commercial production.
Since its first gold pour in May, the mine located near Geraldton, Ont., has produced approximately 59,000 oz. of the precious metal, including 42,500 oz. during the third quarter. During the third quarter, the processed grade averaged 1.15 g/t gold at an average recovery rate of approximately 80%, which Equinox says was largely on plan.
However, the gold miner also noted that the recovery in August was impacted by operational adjustments to the leach circuit and a temporary suspension of the gravity circuit to address certain issues identified during commissioning. These issues have been largely resolved and recovery has increased through September and into October, it said.
Plant throughput in September also suffered a significant drop due to multi-day shutdowns of the crushing and grinding circuits to fix certain wear and other issues identified during the ramp-up process. As a result, the throughput averaged only 14,300 t/d during the third quarter, which is just over half of the plant’s 27,000 t/d capacity. The company had previously been targeting 90% of this capacity by the end of 2024.
Given the above-mentioned issues and the mine’s production to date, Equinox has now adjusted Greenstone’s 2024 gold production guidance from 175,000 to 205,000 oz. to 110,000 to 130,000 oz., representing a near 37% decrease. During the fourth quarter, the company intends to continue the ramp-up of both mining rates and plant throughput towards design capacity.
When at capacity, the operation is expected to produce approximately 400,000 oz. annually over its first five years, and 360,000 oz. per year over its 14-year mine life. This would make Greenstone one of the largest gold mines in Canada.
Shares of Equinox lost 7.4% to $7.47 apiece by 11:25 a.m. ET following its latest update on the new gold mine. The share decline takes the company’s market capitalization to approximately $3.2 billion.
