Equinox Gold eyes up to 18% production growth in 2022, flags inflationary pressures
The company said that production is expected to increase quarter over quarter and, as production increases, AISC will decrease. Cash costs and AISC are expected to be approximately $1,210 and $1,540 per ounce in H1 2022 and $1,025 and $1,295 per ounce in H2 2022, respectively.
The weighting of production and cash flow into the second half of the year is primarily due to the Santa Luz mine transitioning from construction and commissioning to operations starting in Q2 2022.
The company added that production and cost guidance excludes the Mercedes mine as the previously announced sale to Bear Creek Mining is expected to close around the end of Q1 2022, although ounces produced and capital spent prior to closing will be attributable to Equinox Gold.
Equinox also noted that cash costs for 2022 reflect inflationary pressures across all operations, with approximately 15% cost escalation for fuel and other major consumables, and that the company may revise guidance during the year to reflect changes to expected results.
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CEO Christian Milau commented, "Our 2022 guidance represents the fourth consecutive year of production growth at Equinox Gold and includes production that will come from our new Santa Luz mine in Brazil, which has commenced commissioning."
He added that the company continues to advance toward becoming a million-ounce producer by investing in its producing assets and bringing new mines to production.
"Our key focus for 2022 is construction at our Greenstone project in Ontario, with a budget of $326 million for construction capital," Milau added.
Equinox Gold is a growth-focused Canadian mining company operating entirely in the Americas, with seven operating gold mines (including Mercedes) and a path to achieve more than one million ounces of annual gold production from a pipeline of development and expansion projects.