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Equinox Gold reports Q2 2022 net loss of $78.7 million, updates FY 2022 production and cost guidance

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(Kitco News) - Equinox Gold Corp. (TSX: EQX) reported today that in Q2 2022, the company produced 120,813 oz of gold, a slight decrease compared to Q2 2021 (122,656 oz).

The company said that in Q2 2022, earnings from mine operations of $17.0 million (Q2 2021 - $41.3 million) were impacted by lower gold production, higher operating costs due to supply constraints, and inflationary pressures, particularly from increased prices of oil and consumables that impacted input prices.

The company added it incurred a net loss of $78.7 million in Q2 2022 (Q2 2021 - net income of $403.7 million), primarily due to lower earnings from mine operations and a loss on the change in fair value of share purchase warrants compared to a gain during the comparative period of 2021.

In Q2 2022, adjusted net loss was $47.9 million (Q2 2021 - adjusted net loss of $0.8 million). Adjusted net loss was impacted by lower earnings from mine operations compared to the comparative period of 2021, Equinox said.

Importantly, the company noted it has updated its 2022 production and cost guidance to reflect the disruption to mining and operations at RDM, a longer-than-expected ramp-up at Santa Luz that has prolonged pre-commercial production and further inflation of approximately 6% on a consolidated basis.

As a result, consolidated production for 2022 is forecast at 550,000 to 615,000 oz of gold (compared to the original forecast of 625,000 to 710,000 oz of gold).

Updated consolidated cash costs are estimated at $1,200 to $1,250 per oz with AISC of $1,470 to $1,530 per oz sold (compared to the original forecast of $1,080 to $1,140 per oz cash costs with AISC of $1,330 to $1,415 per oz of gold sold).

CEO Christian Milau commented, “Although we experienced operational challenges at several of our sites this quarter, we expect improved performance in the second half of the year with increased production and lower costs. Inflation has certainly increased the cost of consumables and our team is working hard to find offsetting savings so we can maintain a strong business during this market downturn.”

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“Looking forward, Equinox Gold is on track to deliver significant growth over the next few years. Commercial production at Santa Luz and higher-grade ore at Los Filos should both contribute to increased production and lower costs in 2023. The big jump will come in 2024 when we achieve production at Greenstone, which will contribute more than 200,000 ounces of low-cost production annually once it has ramped up to full capacity. We also continue to advance the Castle Mountain, Los Filos and Aurizona expansions, which could collectively contribute more than 300,000 ounces of annual production. As we plan for Greg Smith to take over as CEO, I am confident that Equinox Gold has the foundational assets, the team and the leadership required to achieve its long-term goals,” he added.

Equinox Gold is a Canadian mining company operating entirely in the Americas, with six operating gold mines, a mine in commissioning, and a path to achieve more than one million ounces of annual gold production from a pipeline of development and expansion projects.

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