Aurizona Expansion

Mine life extension, increased production

By mining the underground and satellite open-pit deposits concurrently with the existing Piaba open-pit, the expansion would extend the Aurizona mine life to 11 years and increase annual production, with peak production averaging more than 160,000 oz of gold per year.

Positive pre-feasibility study

In September 2021, Equinox Gold completed a pre-feasibility study outlining a planned expansion of the Aurizona mine. By mining the underground and satellite open-pit deposits concurrently with the existing Piaba open-pit, the expansion would extend the Aurizona mine life to 11 years with average annual production of 137,000 oz of gold per year and total life-of-mine production of 1.5 million oz of gold. Peak production would average more than 160,000 oz of gold annually for four years.

The Piaba gold deposit contains gold mineralization in a vein system that extends at least four kilometres along strike with smaller satellite deposits to the east and west of the main Piaba deposit. Recent drilling has shown that gold mineralization also extends below the ultimate open pit to depths greater than 1,000 metres from surface. In 2020, a total of 65 diamond drillholes totaling nearly 26,000 metres were drilled in the underground deposit to support the pre-feasibility study and underground resource estimate. In 2021, 30 drillholes totaling nearly 11,000 metres have been drilled in the Piaba underground, Tatajuba and satellite deposits, the results of which will be incorporated into the next reserve and resource update.

The current operation consists of the Piaba open-pit mine and a conventional crushing and grinding circuit with an 8,000 tonnes-per-day carbon-in-leach plant. The expansion will incorporate ore from the existing Piaba open-pit deposit along with the Piaba underground deposit and the Tatajuba, Boa Esperança, and Genipapo open-pit deposits. While the expanded mine will continue to use the existing mill and surface infrastructure, the existing powerline will need to be upgraded and the mine will require additional tailings and waste rock storage. Mining and processing underground ore concurrently with open-pit ore will increase the average mill feed grade, increase annual gold production and extend the mine life to 11 years. No flowsheet changes or plant modifications will be required to treat ore from future mining areas.

The pre-feasibility study contemplates a three-year capital development and construction timeline for the underground mine. Total initial capital costs during this period are estimated at $154 million. Underground capital costs assume the mining fleet is purchased. Leasing the mining fleet would reduce capital costs by $25 million. Sustaining capital for the life of mine is estimated at $383 million.

An extensive exploration program is ongoing at Aurizona to further expand Mineral Resources, convert Resources to Mineral Reserves, and continue exploration along strike and at depth at a number of near-mine targets. There is potential to expand both the Piaba East and Boa Esperança open-pits, and the Piaba underground deposit remains open at depth and along strike. Numerous other near-mine targets including Micote, Mestre Chico, São Lourenço, Conceição and Ferradura all require further testing. In addition, gold mineralization at Tatajuba is yet to be fully defined and there is good potential that the Tatajuba deposit continues along strike and at depth, representing another opportunity for mine life extension with exploration success.

Equinox Gold plans to commence permitting of the exploration decline in late 2021, which will allow for targeted drilling of the ore body from underground and would also serve as the ramp for future underground mining.

 

EXPANSION PRE-FEASIBILITY RESULTS

On September 20, 2021, Equinox Gold released the results of a pre-feasibility study for a planned expansion at the Aurizona Mine. The expansion will nearly double the mine life to 11 years and will also increase annual production.

Download the Pre-Feasibility Study technical report or read the press release summarizing the results.

pre-FEASIBILITY STUDY HIGHLIGHTS (US$)

Gold price (base case) $1,500/oz
P&P Reserve 1.7 Moz Au @ 1.60 g/t Au
Mine Life 11 years
Life of Mine Production 1.5 Moz gold
Avg. 137,000 oz/year
Peak production 160,000 oz/year
Recoveries 90.5%
Initial Capex
    Underground development 
    Leased mining fleet

$129 M 
$25 M
Sustaining Capex $383 M 
Cash Cost (LOM) $803/oz
AISC (LOM) $1,058/oz
$944/oz from year 3 onward
Cash Flow (after tax) (LOM) $464 M ($829 M at $1,800/oz gold)
NPV 5% (after tax) $314 M ($600 M at $1,800/oz gold)


overview

The current operation consists of the Piaba open-pit mine and a conventional crushing and grinding circuit with an 8,000 tonnes-per-day carbon-in-leach plant. The expansion will incorporate ore from the existing Piaba open-pit deposit along with the Piaba underground deposit and the Tatajuba, Boa Esperança, and Genipapo open-pit deposits. While the expanded mine will continue to use the existing mill and surface infrastructure, the existing powerline will need to be upgraded and the mine will require additional tailings and waste rock storage. Mining and processing underground ore concurrently with open-pit ore will increase the average mill feed grade, increase annual gold production and extend the mine life to 11 years. No flowsheet changes or plant modifications will be required to treat ore from future mining areas.

CAPITAL AND OPERATING COSTS

The pre-feasibility study contemplates a three-year capital development and construction timeline for the underground mine. Total initial capital costs during this period are estimated at $154 million. Underground capital costs assume the mining fleet is purchased. Leasing the mining fleet would reduce capital costs by $25 million.

Sustaining capital costs of $383 million include $60 million for the underground mine, largely for continued capital development and equipment replacements and rebuilds, $79 million for open-pit capitalized stripping and $178 million for infrastructure. Infrastructure includes $98 million for the construction of additional tailings facilities, $22 million for powerline upgrades and a new substation, $26 million for building improvements, equipment, and automation, and $25 million for exploration.

Operating costs are estimated at $33.14 per tonne of ore processed, as summarized below. LOM average cash costs are estimated at $803/oz with LOM AISC estimated at $1,058/oz of gold sold. Following completion of significant sustaining capital expenditures, AISC from year 3 onward averages $944/oz.

MINING

The pre-feasibility study considers the addition of an underground mine beneath the existing Piaba pit as well as the inclusion of two satellite open-pit areas: Tatajuba and Genipapo.

Underground Mining

The underground mine will be developed along a total strike length of 2.3 km beneath the Piaba pit. Access to the mine will be via a ramp collared in hard rock within the pit. The currently defined seven separate mining areas will be accessed by a 2-km main haulage decline with separate internal ramps. The first 800 m of the main haulage will be developed as a single heading to the location of the primary ventilation raise, which also provides emergency egress. From that point onwards the ramp will be developed as a double ramp arrangement, with the second ramp used for ventilation purposes during production. All underground mine development is in stable rock units located on the hanging wall side of the mineralized body.

The proposed underground mining method is long-hole stoping due to good ground conditions and the steep dip of the deposit. The pre-feasibility study contemplates owner mining of stopes and underground development. Most of the stopes will include permanent rib pillars and be backfilled with rockfill from underground development or open-pit waste. The addition of cement to rockfill is confined to higher-grade areas where mining recovery can be maximized by eliminating rib pillars and above sill pillars.

Ore release will occur early in underground development, and Equinox Gold is reviewing additional opportunities to access higher-grade zones earlier in the underground mining schedule to enhance economics. First ore is released after approximately two years with steady state production exceeding 3,300 t/d achieved by year four. This production level is maintained until the middle of year seven and then reduces until underground mining is complete at the end of year 10. The Crown Pillar between the Piaba open-pit and underground will be recovered when underground mining is complete. In the PFS mine plan, the underground deposit provides 6.5 million tonnes (“Mt”) of ore grading 2.77 g/t gold of fresh rock.

Open-pit Mining

Open-pit mining is currently undertaken by a contractor using conventional drill and blast, load and haul methods.

Piaba and Piaba East are currently in production providing feed to the Aurizona mill. Piaba East is a single-phase pit that is expected to be depleted by the end of 2024. Piaba will continue until 2032, mining the remaining four phases in the design and also the crown pillar in the floor when underground mining is complete. In the PFS mine plan, Piaba provides 18.9 Mt grading 1.3 g/t gold with 83% of the feed material being fresh rock. Piaba East provides 1.2 Mt grading 1.46 g/t gold of primarily saprolite mill feed.

The Boa Esperança pit is scheduled to be mined and completed in 2021, providing a total of 0.9 Mt grading 0.81 g/t gold of saprolite mill feed and creating a freshwater storage facility for plant operations.

The Tatajuba deposit, located 4 km to the west of the Piaba pit, is a two-phase pit design scheduled to commence production in the fourth quarter of 2023. Mining would continue in 2024 then pause until 2027, when the second phase would be complete. In the PFS mine plan, Tatajuba provides 2.0 Mt grading 1.39 g/t gold with 70% of the material being saprolite and transition material and the remainder fresh rock.

The Genipapo area is located 3 km by road to the east of the Aurizona plant. This area is separated into two small areas called Genipapo North and Genipapo South that will share a common waste storage facility. Mining of Genipapo South would start in 2024 and then move to Genipapo North, which is completed in 2028. Combined, the two Genipapo pits are expected to provide 0.67 Mt grading 0.82 g/t gold of saprolite and laterite feed.

The Crown Pillar removal is expected to provide 1.9 Mt of fresh rock grading 1.36 g/t gold in 2031 and 2032, after underground mining is complete.

PERMITTING

The Economic Exploitation Plan (PAE) for Piaba, which was ratified in 2019, will be updated to include the Piaba underground mine operation before submission for approval from the Brazil National Mining Agency (ANM).

Equinox Gold received the Preliminary License (LP) for Tatajuba in August 2021 and anticipates receiving the Installation License (LI) in H1 2022, which will allow for the commencement of mine and infrastructure development.

Genipapo has an exploration permit under assessment by ANM. Upon ANM’s approval, Equinox Gold will submit a PAE requesting the Genipapo mining concession. Boa Esperança is fully permitted under the existing Piaba Operating License (LO).

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