CASTLE MOUNTAIN GOLD MINE

Potential to be a long-life gold mine.

The Castle Mountain heap leach gold mine in California produced more than one million ounces of gold from 1992 to 2004. With more than 4 million ounces of gold remaining and significant exploration upside, Equinox Gold is completing a prefeasibility study for Castle Mountain with the objective of restarting production.

Snapshot

Status Prefeasibility underway

Location California, USA

Production Potential + 300,000 oz/year

M&I Resources 4.0 Moz @ 0.64 g/t gold

Inferred Resources 1.6 Moz @ 0.48 g/t gold 

Exploration New high-grade discoveries

Ownership 100%

Strategy Two-phase ramp starting with low-cost ROM heap leach

Download Castle Mountain Technical Report

Download Castle Mountain Resource Report

Past-Producing Gold Mine With Re-Start Strategy

Potential to restart production by year-end 2019.

Equinox Gold is completing a prefeasibility study for Castle Mountain with the objective of resuming production in a phased ramp-up scenario, starting with run-of-mine heap leaching of backfill material from previous operations, and ramping up to a full restart that will include milling of higher-grade ore.

Key facts

Mine type Open pit
Access Paved roads, 120 km south of Las Vegas
Permits

Federal mining permit in place for production up to 22,000 tpd
Minor State and County permits required to restart
Ancillary permits and a new EIS required for full ramp-up

Strategy Phase 1: Initial ROM heap leach of backfill material
Phase 2: Full restart including ROM heap leach, crushed ore heap leach and milling of higher grade ore
Production potential Phase 1: ~50,000 oz/year
Phase 2: +300,000 oz/year
Resources M&I: 4.0 Moz @ 0.64 g/t gold
Inf: 1.6 Moz @ 0.48 g/t gold
Status Prefeasibility underway
Phase 1 construction targeted for early 2019

Higher gold prices justify putting the mine back into production

The Castle Mountain Gold Mine produced more than one million ounces of gold as an open-pit heap-leach mine from 1992 to 2004, when the mine was shut down due to low gold prices. Whole rock waste below 0.50 g/t gold mine from the Oro Belle and Jumbo pits was backfilled into the JSLA pit.

Higher gold prices justify putting the mine back into production to process that backfill material, which is now considered economic using a 0.20 g/t gold cut-off grade. Recent drilling, aimed at upgrading material previously classified as waste or inferred resources within and adjacent to the pit shells, has discovered consistently good grades and also some higher-grade intercepts. Drilling has also discovered higher-grade mineralization below the backfill material, including a new zone of mineralization in the andesite footwall, which was previously thought to be unmineralized.
 

Production Strategy

Phased Ramp-up

To access existing and potentially new resources, Equinox Gold intends to recommence production in a phased ramp-up scenario, as outlined below. The capital costs, permitting requirements and timelines associated with this phased ramp-up scenario will be better understood upon receipt of the prefeasibility study, which is targeted for completion in Q1-2018.

Phase 1

  • Re-establish onsite operations using the current permit (18 Mt/year)
  • Initial mining and run-of-mine (“ROM”) heap leach processing of the historical JSLA pit backfill material
  • Production potential: 30-50,000 oz/year to start, potential ramp-up to 100,000 oz/year
  • Permit requirements: Federal permit in place, ancillary State water and air permits
  • Construction requirements: Construct small leach pad and gold recovery plant
  • Timeline target: Construction mid-2019, production late 2019

Phase 2

  • Combination of ROM and two-stage crush heap leach, with higher ore to be processed in a gravity circuit
  • Production potential: 200-250,000 oz/year
  • Permit requirements: New Environmental Impact Assessment and expansion permit
  • Water requirements: Source additional water for increased throughput

Potential to restart production in 2019.

The Prefeasibility Study results, initial capital and sustaining capital breakdowns outlined below are based on the “Prefeasibility Study for the Castle Mountain Gold Mine” prepared by Bob’s Uncle with an effective date of December 25, 2017.

2018 Prefeasibility Study Highlights

Gold price (base case) $1,250/oz
FX Rate BRL 3.3 : USD 1
M&I Resource (inclusive of reserves) 1.4 Moz/ 28.3 Mt @ 1.57 g/t Au
P&P Reserve 971 koz/ 19.8 Mt @ 1.52 g/t Au
Mine Life 6.5 years
Annual Production (LOM) Avg. 136,000 oz gold
Strip Ratio / Recovery 5.7:1 / 91%
Total Production (LOM) 885,700 oz gold
Initial Capex $131M ($148/oz)
Sustaining Capex $51M ($54/oz)
Cash Cost (LOM) $691/oz
AISC (LOM) $754/oz
Cash Flow (after tax) (LOM) $286M (net of initial capital)
Construction Period Up to 18 months
NPV 5% (after tax) $197M ($254M at $1,350/oz gold)
IRR (after tax) 34% (42% at $1,350/oz gold)
Payback (after tax) 2.8 years

 

Next Steps

The mine produced gold from 2010 to 2015 and significant infrastructure remains at site. All major mine elements are already in place, including a tailings facility and waste dumps, a dedicated power line, camp offices and accommodations, water, roads and communications. As a result, initial capital costs are estimated at a modest US$131 million, with life-of-mine sustaining capital estimated at US$51 million.

The re-engineered mine plan for Aurizona includes an entirely new crushing and grinding circuit that will allow all known types of mineral bearing rock at Aurizona to be processed through the gold recovery plant. Processing capacity will also be increased from 5,500 tpd to 8,000 tpd. Primary construction activities to achieve production include raising the existing tailings storage facility, upgrading the power substation, and replacing the front end of the existing plant, including installing a primary crusher, SAG and ball mills, pebble crusher, surge bin and temporary stockpile.

Aurizona Mine - Existing Infrastructure and Planned New Front End
Initial Capex US$M
Mining 22.5
Treatment Plant & Repairs 49.3
Reagents & Plant Services 12.0
Tailings Dam 3.1
Owner’s Costs 29.0
Management Costs 6.7
Construction Indirects 7.7
Waste Storage Facilities 0.5
Total Initial Capital $130.8
Sustaining Capex US$M
Mining 10.6
Tailings Dam 35.8
Owner’s Costs 1.2
Closure Costs (net of salvage value) 3.7
Total Sustaining Capital $51.3

Exceptional Exploration Upside

Strong organic growth potential with new high-grade discoveries

Equinox Gold is exploring a number of promising areas on the Castle Mountain property, with the objective of extending mineralization beyond the currently defined resource pit, and also following up on new high-grade discoveries.

Exploration strategy

Recent drilling has intersected broad intervals of low-grade mineralization cored by higher-grade structurally controlled mineralization

More than 44,500 metres of drilling was completed in 2017, aimed at upgrading material previously classified as waste or inferred resources within and adjacent to the resource pit shell. Drilling returned broad intervals of consistently low-grade mineralization, some long good-grade intercepts including 1.01 g/t gold over 180 m and 0.89 g/t gold over 148 m, and also some higher-grade intercepts including 5.49 g/t gold over 20 m and 1.62 g/t gold over 76 m. The delineation of higher-grad e zones co uld impact the resource grade and reduce the strip ratio, and continued intercepts at depth have the potential to push the current pit bottom lower, expanding the defined resource boundary at depth.

Hole CMM-192 intersected 2.26 g/t gold over 126.5 metres

Two rigs are currently drilling at Castle Mountain with the objective of infilling inferred resources to upgrade that material to a higher category. In addition, drilling in 2018 will follow up on higher-grade mineralization found in the andesite footwall, below the JSLA pit. Hole CMM-195 intersected 2.26 g/t gold over 126.5 m in the andesite, indicating that the footwall could be prospective for epithermal mineralization.

Surface mapping and sampling has also identified a number of promising near-mine targets on the property, some with no prior drilling. Equinox Gold is planning its exploration strategy for the larger property, with the objective of delineating additional mineralization that can extend the mine life and potentially increase the overall resource grade for the mine.

Project Geology

The Castle Mountain Project hosts a disseminated low-sulphidation epithermal system, similar to other epithermal systems located in the Great Basin in Nevada. Gold is primarily hosted by late-stage rhyolite volcanic units within zones of silicification and brecciation associated with northeast-southwest trending/southeast dipping fault structures that are interpreted to have developed within a collapsed caldera environment. Gold mineralization occurs as very fine-grained native (free) gold and electrum, disseminated in quartz-stockwork veins and microfractures within strongly silicified and brecciated rhyolite flows, domes, and associated sediments.

Centres of gold mineralization have formed along the main Northeast-trending structural corridor and include, from south to north, the Leslie Ann, Jumbo South, Jumbo, Hart Tunnel and Oro Belle deposits. Higher-grade concentrations of gold appear to be related to the troughs and high-angle bounding structures, and the potential intersection of these with Northwest trending, Southwest dipping faults.

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