Equinox Gold Announces Results of Castle Mountain Prefeasibility Study
TSX-V: EQX
OTC: EQXGF
Suite 730 – 800 West Pender St., Vancouver, BC Canada V6C 2V6
[email protected] +1 604.558.0560 www.equinoxgold.com
NEWS RELEASE
Equinox Gold Announces Results of Castle Mountain Prefeasibility Study
July 16, 2018 – Vancouver, British Columbia – Equinox Gold Corp. (TSX-V: EQX, OTC: EQXGF) (“Equinox Gold”
or the “Company”) is pleased to announce the results of the prefeasibility study (“PFS”) for its 100% owned
Castle Mountain Gold Mine (“Castle Mountain” or the “Project”) located in California, USA. The PFS
contemplates a low -cost heap leach gold mine with 3.6 million ounces (“oz”) of gold reserves that will
produce 2.8 million oz of gold and generate $865 million in after-tax cash flow over a 16-year mine life.
Castle Mountain will be developed in two phases with annual average gold production of 45,000 oz over the
first three years (“Phase 1”) and annual average gold production of 203,000 oz from years 4 to 16 (“Phase 2”).
With Measured & Indicated Mineral Resources estimated at 4.3 million oz of gold (inclusive of reserves),
Inferred Mineral Resources of 2.2 million oz and additional near-mine mineralization identified with the 2017
exploration program, there remains potential to extend the mine life and increase annual production.
All amounts are in US dollars unless otherwise ind icated. Base case economics were calculated using a
$1,250/oz gold price. The Company will host a webcast and conference call at 8:00am PT (11:00am ET) on
July 17, 2018 to present the PFS results. Further details are provided at the end of this news release.
PFS HIGHLIGHTS
• 3.6 million oz of Proven & Probable Mineral Reserves grading 0.56 grams per tonne (“g/t”) gold
• $865 million after-tax life of mine (“LOM”) cumulative cash flow
• $763/oz average LOM all-in sustaining costs (“AISC”)
• 2.8 million oz LOM gold production
• 45,000 oz average annual gold production during Phase 1 (years 1-3)
• 203,000 oz average annual gold production during Phase 2 (years 4-16)
• $406 million after-tax net present value discounted at 5% (“NPV5%”) ($534 million at $1,350/oz gold)
• 20% internal rate of return (“IRR”) (25% at $1,350/oz gold)
• Phase 1 capital costs of $52 million and Phase 2 capital costs of $295 million with LOM sustaining
capital costs of $142 million
• Phase 1 ore stacking and commissioning targeted for end of 2019
• Initial 16-year mine life with expansion potential from existing near-mine mineralization
Christian Milau, CEO of Equinox Gold, stated: “The prefeasibility study contemplates a robust, long-life, high-
margin gold mine in an excellent mining jurisdiction that will generate significant gold production and cash
flow for Equinox Gold shareholders . Castle Mountain increases the Company’s gold reserves by more than
350% to 4.5 million ounces while significantly increasing future annual gold production. Combined production
from the Aurizona and Castle Mountain mines will total almost 200,000 ounces of gold by 2020 and increase
to 350,000 ounces , with all-in costs in the lowest quartile of the industry and significant expansion upside
from both mines.”
Ross Beaty, Chairman of Equinox Gold, stated: “Castle Mountain is Equinox Gold’s second cornerstone mine
that, by itself, will generate more than one billion dollars of pre-tax cash flow at current gold prices. Successful
execution of mine development at both Aurizona and Castle Mountain will establish Equinox Gold as a mid-
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tier gold producer. We have the operating team in place to rapidly advance these mines while our exploration
team demonstrates the great geologic potential at both projects to further enhance the value of these assets
for our shareholders.”
OVERVIEW
The Castle Mountain Gold Mine , located in San Bernardino County, California, produced more than one
million oz of gold as an open -pit heap-leach mine from 1992 to 2004, when production ceased due to low
gold prices and the mine was substantially reclaimed. Under the PFS mine plan, Phase 1 of the Project will
produce for three years with average annual production of 45,000 oz of gold. Phase 2 production is expected
to average 203,000 oz of gold annually for 13 years, for total LOM production of 2.8 million oz. LOM AISC are
estimated at $763/oz, which is in the lowest quartile of the industry. The Project demonstrates strong returns
with an after-tax NPV5% of $406 million and an after-tax IRR of 20% using the base case gold price of $1,250/oz
($534 million and 25% at $1,350/oz gold price). The Project is expected to generate average annual after-tax
net operating cash flow of $83 million with cumulative LOM after -tax net cash flow of $ 865 million. At
$1,350/oz gold, the Project would average more than $96 million in after-tax net operating cash flow annually
and generate more than $1 billion in cumulative after-tax net cash flow over the 16-year mine life.
PFS Highlights 1
Phase 1
(yrs 1-3)
Phase 2
(yrs 4-16) Total Project
Gold Price $1,250 oz
Ore 197.6 M tonnes
Grade 0.35 g/t (ROM) 0.43 g/t (ROM)
3.23 g/t (mill)
0.56 g/t
P&P Reserve 3,563,093 oz
Average annual production 44,930 oz 202,979 oz 173,345 oz
Recoverable LOM gold 2,798,173 oz
Throughput 12,700 tpd 41,000 tpd
Strip ratio 3.6
Recovery 72% (ROM) 72% (ROM)
94% (mill)
79%
Mine life 3 13 16
Initial capex 2 $52 M $295 M $347 M
Sustaining capex 3 $142 M
Cash cost (including royalties) $889/oz $703/oz $712/oz
AISC $980/oz $752/oz $763/oz
Pre-tax NPV 0% $1,034 M
Pre-tax NPV 5% $491 M
Pre-tax IRR 21.7%
After-tax NPV 0% $865 M
After-tax NPV 5% $406 M
After-tax IRR 20.1%
After-tax average annual operating cash flow 4 $16 M $99 M $83 M
1. PFS estimates are considered accurate +/- 20%. 2. Includes working capital and contingency. 3. Includes $20.2 million of reclamation/closure costs
and contingency. 4. Undiscounted.
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Castle Mountain has the key permits and the water supply required to commence Phase 1 production, with
a Conditional Use Permit (“CUP”) , Reclamation Plan and a valid Record of Decision (“ROD”) to mine up to
46,600 tonnes per day (“tpd”) of ore plus waste . Phase 1 will consist of a run -of-mine (“ROM”) heap leach
operation processing primarily 12,700 tpd of stockpiled ore from previous operations. Phase 2 will increase
throughput to 41,000 tpd of ore, of which 2,340 tpd of higher-grade ore will be processed through a milling
circuit. The phased ramp -up approach allows the Company to use existing permits to expedite production
while completing the feasibility study and permitting for the Phase 2 expansion. While Phase 2 will operate
within the existing permitted mine boundary, the increased mining and water extraction rate s will require
updated permitting for the Project.
ECONOMIC SENSITIVITIES
Using the base case gold price of $1,250/oz and incorporating only Proven and Probable Mineral Reserves of
3.6 million oz of gold, the Project has an after- tax NPV5% of $406 million and an after- tax IRR of 20 %. The
Project’s economics are most sensitive to fluctuations in the gold price, as summarized in the tables below.
Castle Mountain Mine Sensitivity to Gold Price
Gold price ($/oz) $1,150 $1,250 $1,350
NPV5% (after tax) $276.4 M $406.5 M $534.2 M
IRR (after tax) 15.2% 20.1% 25.1%
Castle Mountain Mine Sensitivity to Capital Costs
Capital costs 1 -10% $471.0 M +10%
NPV5% (after tax) $435.6 M $406.5 M $377.5 M
IRR (after tax) 22.5% 20.1% 18.1%
1. Includes sustaining capital and recapture of $18 million of working capital at end of mine life.
Castle Mountain Mine Sensitivity to Operating Costs
Operating costs -10% $1,836.0 M +10%
NPV5% (after tax) $495.2 M $406.5 M $315.6 M
IRR (after tax) 24.0% 20.1% 16.4%
CAPITAL & OPERATING COSTS
Initial capital for Phase 1 construction is estimated at $52 million, with many aspects of the Phase 2 expansion
incorporated into the design to reduce total LOM capital costs. Initial capital for Phase 2 construction is
estimated at $295 million, including $47 million in capitalized pre-stripping. Cost estimates are summarized
in the tables below.
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Castle Mountain Capital Cost Estimates
Cost Area Phase 1 Capital
(M$)
Phase 2 Capital
(M$)
Sustaining Capital
(M$)
Mine equipment 1.4 111.5 51.7
Pre-stripping - 46.8 -
Leach pad 14.7 12.4 49.8
ADR plant 11.0 6.6 -
Mill CIL - 42.3 -
Facilities, support and infrastructure 7.8 24.1 -
Plant mobile equipment 1.1 4.6 7.0
EPCM 0.6 11.2 2.0
Owner’s costs 5.3 2.5 -
Construction indirects 1.6 2.6 2.0
Working capital 3.8 13.9 -
Contingency 4.3 16.5 9.4
Closure - - 20.2
Total $51.7 $295.0 $142.0
Castle Mountain Operating Cost Estimates
Phase 1 Phase 2 Total Project
$/oz $/t $/oz $/t $/oz $/t
Mining ($/ mined) 1.84 1.37 1.39
Mining ($/ processed) 514 4.01 447 6.61 450 6.38
Processing ($/ processed) 220 1.72 146 2.15 149 2.11
G&A ($/ processed) 120 0.94 53 0.78 56 0.80
Total onsite costs 854 646 656
Refining, transport 2 2 2
Total cash costs 855 648 658
Royalties 34 55 54
Total cash costs 889 703 712
Sustaining capex 91 42 44
Mine closure - 8 7
AISC $980 $752 $763
Notes: Numbers may not sum due to rounding.
MINERAL RESERVES & RESOURCES
Proven and Probable Mineral Reserves are estimated at 3.6 million oz of gold contained in 197.6 million
tonnes of ore at a diluted gold grade of 0.56 g/t. These Mineral Reserves support an initial 16-year mine life
with potential to expand the reserve base and extend the mine life with exploration success.
The combined Measured & Indicated Mineral Resources are estimated at 4.3 million o z of gold (inclusive of
reserves) with 3.0 million oz in the Measured category contained in 160.6 million tonnes at a gold grade of
0.58 g/t and 1.3 million oz in the Indicated category contained in 81.4 million tonnes at a gold grade of
0.51 g/t, and additional Inferred Mineral Resources of 2.2 million oz contained in 171.4 million tonnes at a
gold grade of 0.40 g/t.
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Castle Mountain Mineral Reserve Estimate
Effective Date June 29, 2018
Proven Probable Proven & Probable
Resource Area Tonnes
(M)
Grade
(g/t)
Contained
Gold (Moz)
Tonnes
(M)
Grade
(g/t)
Contained
Gold (Moz)
Tonnes
(M)
Grade
(g/t)
Contained
Gold (Moz)
JSLA - Rock 56.7 0.52 0.95 1.7 0.92 0.05 58.5 0.54 1.01
JSLA - Pit fill 16.3 0.35 0.18 16.3 0.35 0.18
Jumbo 8.9 0.77 0.22 2.6 0.39 0.03 11.5 0.68 0.25
Oro Belle 38.7 0.57 0.71 6.2 0.48 0.10 45.0 0.56 0.80
East Ridge 5.1 0.80 0.13 6.4 0.42 0.09 11.6 0.59 0.22
South Domes 27.1 0.63 0.55 27.7 0.62 0.56 54.8 0.63 1.10
Total 136.6 0.58 2.56 61.0 0.51 1.00 197.6 0.56 3.56
Notes: The Mineral Reserve estimate with an effective date of June 29, 2018 is based on the Mineral Resour ce estimate with an effective date of
March 29, 2018 that was prepared by Don Tschabrun, SME RM of Mine Technical Services. The Mineral Reserve was estimated by Global Resource
Engineering, LLC with supervision by Terre Lane, MMSA, SME RM. Mineral Reserves are estimated within the final designed pit which is based on the
$850/oz pit shell with a gold price of $1,250/oz. The minimum cut -off grade was 0.14 g/t gold and 0.17 g/t gold for Phases 1 and 2, respectively.
Average life of mine costs are $1.39/tonne mining, $2.11/tonne processing, and $0.80/tonne processed G&A. The average process recovery was
72.4% for ROM and 94% for Mill/CIL. Tonnes and gold ounces are both reported in millions. Small differences in total tonnage and grade may occur
due to rounding. The Mineral Resource estimate is inclusive of Mineral Reserves.
Drilling at Castle Mountain in 2017 identified a new zone of significant near-surface mineralization at the East
Ridge target, peripheral to the current resource pit, with grades significantly higher than the current resource
grade. Exploration also identified some higher- grade intercepts at depth in the JSLA Pit that could pull the
current pit bottom lower and expand the defined resource boundary at depth. Equinox Gold intends to
continue drilling at Castle Mountain with the objective of extending the mine life and potentially bringing
higher-grade, near-surface mineralization into the mine plan to increase annual production and reduce the
LOM strip ratio.
CASTLE MOUNTAIN MINE PLAN
During previous operations, material below 0.5 g/t gold mined from the Oro Belle and Jumbo pits was placed
into the JSLA Pit (Figure 1). Phase 1 ore will be sourced primarily from this stockpile of lower-grade material,
which will be place d on the heap leach pad in 15- metre lifts at a rate of 12,700 tpd and leached. Average
annual production during Phase 1 is estimated at 45,000 oz of gold for total Phase 1 production of 135,000 oz
of gold.
Phase 2 , treating ore mined from the large Main Trend and South Domes pits (Figure 1), comprises two
circuits whereby an average of 38,600 tpd of ore grading between 0.17 g/t gold and 1.3 g/t gold will be placed
directly on the ROM heap leach pad and ore above the 1.3 g/t cut-off will be milled and processed via a CIL
(carbon-in-leach) circuit at an average rate of 2,400 tpd . Average annual production during Phase 2 is
estimated at 203,000 oz of gold for total anticipated production from Phase 2 of 2.7 million oz of gold. The
operating plan calls for 5% of the ore tonnes, containing 29% of LOM produced gold, to be processed by CIL.
Metallurgical test work shows average recoveries of 72% for ROM operations and 94% for milling operations,
with average LOM recoveries of 79%.
Mine design and preparation of the mining reserves was completed using conventional open -pit design
practice. The designs are based on the $850/oz Lerchs-Grosmann optimal pit solution. From that initial pit
design, ramp systems were designed and the pits were divided into 14 different laybacks/phases. Mining of
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the pits was subsequently scheduled to provide the required ore per year in t he plan while balancing the
waste mining to ensure proper development of the Project.
During the first two years of operations mining will be performed exclusively by a mining contractor. In years
3 and 4 the mining contractor will continue mining and will also assist with pre -stripping operations, which
will be primarily undertaken by the Company’s own mining fleet. Contract mining operations will cease by
year 5. Grade control will be performed by Castle Mountain personnel throughout the mine life.
It is anticipated that the mining contractor will use a fleet of 85-tonne to 100-tonne capacity rear dump trucks
and equivalent class front-end-loaders. The initial owner fleet is expected to comprise 17 180-tonne capacity
rear dump trucks and four 425-tonne class excavators. Mining will take place on 6.1-metre (20 foot) benches,
with double benching anticipated in waste areas.
Mining costs are estimated at $1.39 per tonne mined over the current LOM.
Figure 1 – Castle Mountain Site Plan
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PROCESSING
Phase 1 processing operations will treat the solutions from the ROM heap leach facility operating in a new
ADR (adsorption, desorption and refining) plant capable of treating 400 cubic metres per hour (“m 3/hr”) of
pregnant solution to produce doré bars.
Phase 2 will require an expansion of the solution handling and ADR plant capacity to receive the additional
flow from the increased ROM heap leaching operations and loaded carbon from the CIL plant. The Phase 2
CIL circuit will comprise a three-stage crushing circuit, ball mill, a gravity circuit, a CIL circuit, an Acacia high
intensity leach circuit, a cyanide destruction circuit, and a mill fines filtration circuit. The comminution circuit
is designed to achieve 80 % passing 150 microns. Loaded carbon from the CIL circuit will be treated in ROM
desorption and recovery circuits. The expanded plant will have capacity to treat 1,900 m3/hr to produce doré
bars.
Processing costs are estimated at $2.11 per tonne treated over the current LOM.
HEAP LEACH PADS
The heap leach pads for both phases will be double synthetic lined using 2.0 mm LLDPE liner with a leak
detection and recovery system between the synthetic liners. Spent heap leach ore from prior operations will
be used to form a 600 mm drainage layer above the lining system. Ore will be stacked in 15-metre lifts with
no inter-lift liners. Heap irrigation, at a nominal rate of 10 l/hr/m2, will be delivered via buried drip lines to
reduce evaporative losses of solution. Leaching reagent consumptions are expected to be 0.1 kg/t NaCN and
1.2 kg/t lime.
POWER
Power for Phase 1 operations will be provided from on-site propane generators. Power for Phase 2 operations
will be obtained from a substation in the nearby town of Searchlight, Nevada and delivered via a 69kV
powerline that will be constructed for Phase 2 operations.
WATER
Phase 1 operations require approximately 23 litres per second (“l/s”) of water that will be provided from
existing water wells at the Project. Phase 2 operations require approximately 60 l/s of water that the
Company expects to source from existing water wells and from additional nearby water sources.
WASTE DUMPS, BACKFILL & MILL FINES DISPOSAL
Over the LOM, 58% of the mine waste will be placed in waste dumps to the SE and NW of the active mining
areas and the 42% balance will be placed as backfill in the Main Trend Pit.
Approximately 10.7 million tonnes of mill fines will be treated to remove cyanide using a Caro’s acid system,
filtered, and then dry stacked at the north end of the heap leach pad . The mill fines will be stacked on the
same lining system as the ROM heap leach material (double synthetic liner) and isolated from the ROM heap
leach material by an intermediate liner on the interface between the ROM material and the fines.
LABOUR AND SUPPLIES
The Project is approximately a 1.3 -hour drive south from Las Vegas, Nevada and accessible year- round by
paved highways and well-maintained gravel roads. Construction and operations personnel will be stationed
in nearby communities without the need for an on-site camp. There is abundant skilled labour in the region
and the Project will provide up to 600 jobs during both construction and operations. The Project is located in
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the southwest United States mining district and a number of major mining suppliers have distribution hubs
in the region.
PERMITTING
The Company has maintained its permits in good standing since prior operations ceased and has the key
permits required to commence Phase 1 production including a San Bernardino County CUP and a Federal
ROD. Certain administrative State permits are required for Phase 1 and are expected to be received in early
to mid-2019.
To permit Phase 2, with a higher processing rate, increased water consumption and a larger area of impact,
the Company will modify its existing plan of operations and permits. None of the flora and fauna surveys and
environmental studies to date have identified material changes to the mine area compared to the area during
previous operations. The Company intends to submit its updated mine plan and reclamation plan by mid -
2019 with the target of commencing Phase 2 construction upon receipt of permits.
NEXT STEPS & TIMELINES
The Company intends to advance Phase 1 basic engineering with the target of stacking ore on the heap leach
pad and commissioning the ADR plant in late 2019. Concurrently, the Company will undertake a feasibility
study and permitting to support development of Phase 2. Data collection for Phase 2 permitting is underway.
The Company is also in the process of permitting a water well development program.
TECHNICAL REPORT PREPARATION
The PFS was prepared by several independent Qualified Persons (“QPs”) and was consolidated by Kappes
Cassiday & Associates (“KCA”), supported by Mine Technical Services (“MTS”), Global Resource Engineering
(“GRE”), Call & Nicholas (“ CNI”), Geo-Logic Associates ( “GLA”) and Lilburn Corporation . The Mineral
Resources were prepared by MTS based on the geological model prepared by Equinox Gold geologists, which
MTS reviewed and agree d when preparing the block model. The Mineral Reserves, mine plan and mining
sections of the study were prepared by GRE, the mine geotechnical section was prepared by C NI and
environmental matters were led by San Bernardino -based Lilburn Corporation . The heap leach pad and
hydrogeology aspects of the study were prepared by GLA. The PFS is being summarized into a technical report
that will be filed on SEDAR within 45 days, in accordance with National Instrument 43-101 (“NI 43-101”).
CONFERENCE CALL / WEBCAST
The Company will host a webcast and conference call on July 17 , 2018 to present the Castle Mountain PFS
results. The webcast and presentation slides will also be archived and accessible on Equinox Gold’s website.
Please register five to 10 minutes before the scheduled start time and ask to join the Equinox Gold call.
Tuesday, July 17, 2018 at 8:00am Pacific Time (11:00am Eastern Time)
Toll-free in U.S. and Canada: 1-800-319-4610
International callers: +1 604-638-5340
Webcast: www.equinoxgold.com
QUALIFIED PERSONS
The technical content of this press release has been reviewed and approved by the QPs who were involved
with preparation of the PFS: Tim Scott, SME RM of KCA; Todd Wakefield, SME RM of MTS ; Don Tschabrun,
SME RM of MTS; Terre Lane, MMSA, SME RM of GRE; Ross Barkley, PE of CNI; and Monte Christie, PE, GE of
GLA. David Laing, BSc, MIMMM, Equinox Gold’s COO, and Marc Leduc , P.Eng., Equinox Gold’s EVP