Status Commissioning underway
Location BAHIA STATE, BRAZIL
Production 70,000 - 90,000 OZ in 2022
Estimated AISC ~$877/oz Life of mine
P&P Reserves1.1 MOZ @ 1.34 G/T GOLD
M&I Resources 1.97 MOZ @ 1.54 G/T GOLD1
Inferred Resources 0.5 MOZ @ 2.09 G/T GOLD
Mining Style OPEN-PIT WITH RIL PLANT
Upside Potential UNDERGROUND DEVELOPMENT
Santa Luz construction has been completed on time and on budget, with no lost-time injuries. During 2022, with a partial year of production, it is expected to produce 70,000 to 90,000 oz of gold. Once operating at capacity, Santa Luz is expected to produce approximately 100,000 oz of gold annually. Using the base case $1,500/oz gold price, Santa Luz is expected to produce 903,000 oz of gold and generate $436 million in after-tax net cash flow over an initial 9.5-year mine life, with additional upside from underground Mineral Resources.
- After-tax NPV5% of $305 million at base case $1,500/oz gold
- After-tax IRR of 58% at $1,500/oz gold
- $436 million after-tax life-of-mine (“LOM”) cumulative net cash flow
- $69 million average annual EBITDA (LOM)
- $57 million average annual net cash flow (LOM)
- $877/oz average LOM all-in sustaining costs (“AISC”)
- 903,000 oz LOM gold production at an average recovery of 84%
- 110,500 oz average annual gold production 2022 - 2026
- 95,000 oz average annual gold production (LOM)
- 1.1 million oz of Proven and Probable Mineral Reserves grading 1.34 grams per tonne (“g/t”) gold
- $103 million initial capital costs with payback in less than two years
- $21 million LOM sustaining capital costs (excluding capitalized stripping)
- 9.5-year initial mine life with expansion potential from underground development
Commissioning is underway!
On March 30, 2022 Equinox Gold announced it’s first gold pour at its Santa Luz Mine. Equinox Gold commenced full-scale construction of the Santa Luz project on November 9, 2020, with a construction budget of $103 million. As a brownfields past-producing mine, the majority of site services and infrastructure is already in place at Santa Luz. The initial capital costs to restart the mine include refurbishing existing infrastructure, retrofitting the plant, installing additional grinding power and increasing the storage capacities of the existing tailings and water storage facilities. Open-pit stripping began in February 2021. Modifications and upgrades to the processing plant and tailings and water storage facilities finished by the end of 2021. Commissioning commenced in February 2022, and commercial production will increase over the next few months. With a partial year of production, Santa Luz is expected to produce 70,000 to 90,000 ounces of gold in 2022. Progress over the two years can be viewed in the photo gallery.
The Santa Luz open-pit mine operated from mid-2013 to mid-2014, when it was placed on care and maintenance following poor metallurgical recovery results from its carbon-in-leach (“CIL”) plant. Subsequent metallurgical testing programs, including the operation of a pilot-scale plant, has demonstrated that resin-in-leach (“RIL”) is a better method of gold recovery for the project.
While the majority of infrastructure is already in place, the design includes a new ball mill, new RIL circuit and new gravity concentration circuit, with its own alkaline electrowinning circuit. The plan also calls for the repair, refurbishment and improvement of the SAG mill, conical crusher, numerous belt conveyors and the water treatment plant. This will include a new primary crusher system, including new earthworks and concrete, jaw crusher, vibrating grizzly, ore bin and liner, apron feeder and belt conveyors. Additional improvements to the existing process plant include secondary slurry and resin pumps, resin wash columns, kerosene pre-treatment circuit, and a heat exchanger and water treatment plant for the elution system.
Equinox Gold published the results of an updated feasibility study for the Santa Luz project on November 9, 2020. As a brownfields past-producing mine, the majority of site services and infrastructure is already in place at Santa Luz. The initial capital costs to restart the mine include refurbishing existing infrastructure, retrofitting the plant, installing additional grinding power and increasing the storage capacities of the existing tailings and water storage facilities.
Construction was completed on time and on budget, with first gold pour on March 30, 2022.
Santa Luz Project Highlights
|Gold price (base case)||$1,500/oz|
|Exchange rate (Brazilian Real to US Dollar)||5.0:1|
|Average annual gold production (LOM)||95,000 oz|
|Average annual gold production (2022 - 2026)||110,500 oz|
|Total gold production (LOM)||903,000 oz|
|Mineral Reserves||1,074,941 oz|
|Gold grade||1.34 g/t|
|Strip ratio (excluding stockpiles)||4.7:1|
|Average gold recovery||84%|
|Initial mine life||9.5 years|
|Initial capital costs (“capex”)||$103 M|
|Sustaining capex (excluding capitalized stripping)||$21 M|
|Cash costs (LOM, including royalties)||$776/oz|
|Net cumulative cash flow (LOM, after tax)||$436 M|
|NPV5% (after tax)||$305 M (base case)|
|IRR (after tax)||58% (base case)|
|Average annual EBITDA (LOM)||$69 M|
|Average annual net cash flow (LOM, after tax)||$57 M|
|Payback (after tax)||1.6 years|
1. AISC includes mine cash costs per oz sold, royalties, sustaining capex, and operational waste stripping costs.
Using the base case gold price of $1,500/oz and incorporating only Proven and Probable Mineral Reserves, the Project has an after-tax NPV5% of $305 million and an after-tax IRR of 58%. At $1,800/oz gold, the Project has an after-tax NPV5% of $475 million and an after-tax IRR of 85%. Project economics are most sensitive to fluctuations in the gold price, followed by changes in operating costs, foreign exchange and capital costs.
|Gold price ($/oz)||$1,300||$1,400||$1,500||$1,600||$1,700||$1,800|
|NPV5% (after tax)||$186 M||$247 M||$305 M||$362 M||$419 M||$475 M|
|IRR (after tax)||38%||48%||58%||67%||76%||85%|
CAPITAL AND OPERATING COSTS
Initial capital to fund construction and commissioning was estimated at a modest $103 million due to the Company’s ability to leverage significant existing infrastructure at the brownfields mine site. Sustaining capital of $82 million includes $61 million of deferred stripping, $10 million for tailings storage facility expansions and $11 million of other capital costs.
Mining costs are estimated at $2.41/t of ore mined or $11.84/t of ore processed. Mining costs exclude 6.9 Mt of pre-production mining but include production period mining ($2.15/t), stockpile re-handling ($0.23/t) and grade control ($0.04/t).
Processing costs are estimated at $13.41/t and G&A is estimated at $2.75/t processed.
SANTA LUZ MINE PLAN
Santa Luz will be a conventional off-road truck and shovel open-pit mining operation, using a mining contractor for material movement. The stripping ratio is 4.3:1 waste to ore including existing stockpiles (4.7:1 excluding stockpiles), and 6.9 Mt of pre-stripping is proposed (excluding the rehandling of old stockpiles). The mine production schedule delivers 24.9 Mt of ore grading 1.34 g/t gold to the mill over the LOM. Waste tonnage totaling 106.5 Mt will be placed in the waste rock dumps.
Processing will include 2-stage crushing (jaw crusher and cone crusher) and 2-stage grinding (semi-autogenous-grinding mill and ball mill), resin-in-leach (“RIL”), elution and electrowinning. The nominal throughput rate is projected to be 7,400 tonnes per day (“t/d”), plus 1.5 additional years at a lower rate from residual stockpile feed, for a total 9.5-year mine life.
The LOM plan shows recoveries of 84% with production averaging 110,500 oz of gold per year for the first five years (2022-2026) with an average AISC of $922/oz. Production for the first eight years (2022-2029) when the mine is processing predominantly fresh ore averages 104,500 oz of gold per year with an average AISC of $858/oz, followed by 1.5 years processing residual stockpile feed for a LOM production average of 95,000 oz of gold per year with LOM average AISC of $877/oz.
The Project includes a process plant capable of treating 7,400 t/d of ore through a combination of crushing and grinding, gravity concentration, resin-in-leach (RIL) processing, elution and electrowinning. While the majority of infrastructure was already in place and required only refurbishment, construction added a new ball mill, the new RIL circuit and a new gravity concentration circuit, with its own alkaline electrowinning circuit. The plan also called for the repair, refurbishment and improvement of the SAG mill, conical crusher, numerous belt conveyors and the water treatment plant. This included a new primary crusher system, including new earthworks and concrete, jaw crusher, vibrating grizzly, ore bin and liner, apron feeder and belt conveyors. Additional improvements to the process plant included secondary slurry and resin pumps, resin wash columns, kerosene pre-treatment circuit, and a heat exchanger and water treatment plant for the elution system.
Optimization test work has established that 84% gold recovery can be achieved with blended carbonaceous/dacitic ore using RIL processing. The process plan was based on previous production records, test work conducted from 2014-2017 and further optimization in 2019-2020. The test work consisted of extensive mineralogical, diagnostic, comminution, gravity separation, flotation concentration, leaching of flotation concentrate, calcination of flotation concentrate, whole ore CIL, and whole ore RIL testing. Leach test work in 2016-2017 and 2019-2020 was carried out at the Santa Luz on-site pilot plant to overcome the limitations of using batch tests to estimate plant recovery and gold loadings when processing pregnant-solution-robbing ores.
As part of the Santa Luz study, SLR Consulting Ltd. (formerly Roscoe Postle Associates Inc.) included a PEA of the potential to exploit the Mineral Resources below the C1 open pit using underground mining methods, originally published in 2018 using a gold price of $1,300/oz, and updated the economics using a higher gold price of $1,500/oz. The C1 Underground project could be operated concurrently with the existing open-pit mine and has the potential to deliver an additional estimated 511,000 oz of gold and $289 million in undiscounted pre-tax cash flow over an initial 9.5-year mine life. At the base case gold price of $1,500/oz, the C1 Underground project has an after-tax NPV5% of $178 million and an after-tax IRR of 39%.
Over the contemplated 9.5-year mine life, a total of 7.1 Mt of mill feed would be extracted at a grade of 2.65 g/t gold. The design anticipates a nominal 2,500 t/d underground long hole mining operation using cemented paste backfill to allow for maximum extraction of the deposit. Mill feed from the C1 Underground would be blended with open-pit ore in the proposed 7,400 t/d process plant. No modifications to the process plant described above were included in the PEA analysis.
The C1 Underground resources are a proximal down-dip extension of the Mineral Resource exploited by the C1 open pit. If Equinox Gold elects to develop the C1 Underground, development of the main decline would take two years. Production would begin to ramp-up in Year 3 and mining would be completed by Year 10. The estimated pre-production capital cost for the C1 Underground is $74 million with total project capital of $98 million, including sustaining and closure costs. The estimated average operating cost is $50.28/t milled.
The preliminary economic analysis of the C1 Underground is based, in part, on Inferred Resources, and is preliminary in nature. Inferred Mineral Resources are considered too geologically speculative to have mining and economic considerations applied to them and to be categorized as Mineral Reserves. Additional drilling and technical studies will be required to convert the C1 Underground Mineral Resources to Mineral Reserves. There is no certainty that the results contemplated in the PEA will be realized.
Equinox Gold believes there is the potential for significant additional Mineral Resources to be delineated in down-dip and lateral extensions of the C1 Underground Mineral Resource. Additional definition drilling is planned to reduce the spacing between drill holes to delineate Measured or Indicated Mineral Resources to support a full underground mine design.