Positive Feasibility Study Results For Phase 2 Expansion
Equinox Gold Corp. (TSX: EQX) has received positive results for a Feasibility Study for the Phase 2 expansion at the company’s 100%-owned Castle Mountain Gold Mine in California, USA.
On a standalone basis, Phase 2 is expected to produce 3.2 million ounces of gold at average all-in-sustaining costs (AISC) of US$858 per oz of gold sold. Using the base case US$1,500/oz gold price, Phase 2 has an after-tax net present value of US$640 million 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 tonnes of ore per day (t/d).
CEO, Christian Milau, said 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.
“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,” Mr Milau said.
“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.”
The Castle Mountain Gold Mine, located in San Bernardino County, California, produced more than one million oz of gold as an open-pit heap leach mine from 1992 to 2004, when production ceased due to low gold prices and the mine was substantially reclaimed. Equinox Gold completed Phase 1 construction in September 2020 with no lost-time injuries and achieved Phase 1 commercial production on November 21, 2020.
The 2021 Feasibility outlines an expansion of the mine that will include a 45,350 t/d ROM heap leach facility and a new 3,200 t/d milling and leach/carbon-in-leach (“CIL”) plant for higher grade ore. The existing open pits will ultimately join to become the Main Pit which, with the South Domes Pit, will provide Phase 2 ore.
Phase 2 will operate within the current approved Mine Permit boundary and existing site infrastructure will be incorporated into Phase 2, including administration buildings, haul roads, solution handling pumps and storage tanks, a carbon-in-column (CIC) plant, a cyanide receiving and storage area, a lined event pond, a diesel power generation plant and an assay and metallurgical laboratory.
The Phase 2 heap leach facility will consist of an enlarged heap leach pad, an additional event pond, additional larger solution handling pumps and an additional CIC plant.
The new mill facility will consist of a two-stage crushing facility, conveyors, ball mill circuit, gravity concentration, leach and CIL tanks, thickeners, filters and a reagent handling area. Loaded carbon will be processed in a desorption, electrowinning and refinery plant.
Additional infrastructure for Phase 2 includes water supply wells, pumps and distribution systems, installation of an electrical transmission line along a previous corridor, an electrical substation, a filtered tailings storage facility, an extension of two waste rock dumps, a truck shop, and various site improvements and upgrades to meet the expanded project needs.
The 2021 Feasibility contemplates a two-year construction timeline. Total initial capital costs are estimated at US$389 million, excluding US$121 million for a leased mining fleet, or a total of US$510 million if the fleet is purchased up front. All economics below are based on the assumption that the mining fleet is purchased up front.
Sustaining capital costs of US$147 million are primarily for mine equipment and development of additional stages of the heap leach pad and filtered tailings facilities, plus additional closure costs of US$22 million at the end of the mine life.
