Ramping up gold production
Koricancha is a custom built 350 tpd gold ore processing facility in Peru. Gold production recommenced at the end of 2016 and is ramping up toward capacity, with the potential to produce 50,000 to 75,000 ounces of gold annually.
||Less than 10 minutes from Pan American Hwy
||Dedicated power to site, local labour, camp on site
||Commenced production in 2016
Ramping toward throughput capacity
||Purchase gold/silver ore from artisanal miners at a market discount, process ore to produce gold and silver that is sold at spot prices
The Koricancha Mill is a fully operational industrial gold milling facility strategically located just 10 minutes from the Pan American Highway, within the Nazca-Ocona gold belt in Southern Peru. Equinox Gold’s interest in the Koricancha Mill is held in a 83%/17% joint venture with a private Peruvian company, EMC Green Group.
The Koricancha Mill processes gold bearing ore purchased from legal small-scale and artisanal miners. Under Peruvian law, artisanal miners must send their ore to licensed processing facilities. Koricancha tests the ore and builds relationships with miners who can provide a consistent supply of high-quality mineralized feed. Payments are set at time of purchase at a discount to market, the ore is processed, and then the gold and silver is sold at spot prices for Koricancha’s account.
Toll milling in Peru
Peru is South America’s largest gold producer and exporter and the fifth largest gold producer in the world, with approximately 5.4 million ounces of gold produced annually. Approximately 20% of that gold production comes from small-scale artisanal miners, representing nearly $1.5 billion in potential revenues at current gold prices.
Peru is taking steps to regulate the artisanal mining industry, both to recover lost taxes and to address environmental and safety concerns. To date more than 80,000 miners have registered to legally operate, with expectations that up to 150,000 artisanal mining operations will be formally recognized. This presents a substantial business opportunity for Equinox Gold and its Koricancha Mill, located in the heart of Peru’s gold mining industry.
High-grade gold project in Canada
Elk Gold is a past-producing high-grade gold mine in southern British Columbia, Canada, with remaining resources and exploration potential.
||Southern British Columbia, Canada
Close to Copper Mountain Mine and the historical Brenda Mine
||Paved highway with nearby power
||Multiple high-grade gold veins
||M&I: 212 koz @ 6.32 g/t gold
Inf: 210 koz@ 5.94 g/t gold
||Considering options to bring value
While the Elk Gold project hosts a remaining high-grade gold resource, the project is too small to factor into Equinox Gold’s long-term growth plans. Equinox Gold is considering a number of alternatives to surface value from this project, including mining the ore to provide high-grade gold feed to a number of nearby mines, or selling the asset to a third party.
The Elk Gold Project consists of 27 contiguous mineral claims and one mining lease covering 16,566 hectares in southern British Columbia, Canada. Prospecting activities date back to the early 1900’s with detailed work in the area conducted in the 1960’s and 1970’s by several companies focused on copper and molybdenum. Approximately 51,500 ounces of gold were produced between 1992 and 1995 from a test pit on site. Gold Mountain Resources carried out additional exploration work and between 2012 and 2014 completed a 6,597 tonne bulk sampling program with an average grade of 16.65 g/t, resulting in the production of 3,531 ounces of gold.
The Elk Gold deposit is composed of multiple high-grade gold veins hosted in intrusive and volcanic rocks. At least nine areas of gold mineralization have been identified, consisting of the Siwash Zone, Siwash East, Bullion Creek, Gold Creek, Elusive Creek, Lake Zone, Discovery Zone, End Zone and South Zone.
Elk Gold appears to be a shear zone hosted, intrusive related gold system, with some similarities to the Dublin Gulch deposit in the Yukon, which hosted over three million ounces of gold. Gold is hosted by pyritic quartz veins, which occur as multiple stacked arrays, and generally trend east-west dipping shallowly to the south, making them potentially amendable to open pit mining. The veins are narrow, but very high grade, with gold assays ranging from 1 g/t – 400 g/t over 20cm to 40cm widths.
A 2016 technical report for the project estimated remaining Measured & Indicated Resources of 212 koz grading 6.32 g/t gold, with additional Inferred Resources of 210 koz grading 5.94 g/t gold.