Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Equinox Gold (TSX: EQX; NYSE: EQX) has arranged a $140 million gold prepay arrangement with which to complete construction of the Greenstone mine in Geraldton, Ontario. A second non-binding term sheet was signed for an additional $50 million gold purchase and sale arrangement.
The $140 million prepay arrangement was executed by ING Capital Markets as lead arranger and includes National Blank of Canada and Bank of Montreal. It is based on gold forward curve prices averaging $2,170 per ounce. From October 2024 to July 2026, Equinox has agreed to make monthly deliveries totaling 79,310 oz.
The $40 million non-binding gold purchase and sale agreement was made with Sandbox Royalties. When it closes, Vancouver- based Equinox will receive $50 million in exchange for monthly deliveries equal to 333 oz. or 1.2% of the monthly output, whichever is larger, until a total of 60,000 oz have been delivered.
Greenstone will be Equinox’s first gold mine in Canada and one of the country’s largest at about 400,000 oz. per year in the first five years and 350,000 oz. average over the 14-year life of the mine. Construction is on budget and on time to pour the first gold by the middle of 2024, the company said, adding that the project features an initial open pit mine and a 27,000 t/d carbon-in-pulp processing facility.
Equinox owns 60% of the Greenstone project, and the balance is held by Orion Mine Finance.
The deposit contains 3.3 million oz. of gold in 81.2 million tonnes of proven and probable reserves grading 1.27 g/t gold. Measured and indicated resources are 9.5 million tonnes grading 2.9 g/t gold, containing 881,000 ounces. The inferred resource is 15.0 million tonnes grading 3.83 g/t gold, containing 1.8 million ounces.
In February, the Greenstone mine project was 70% complete overall, and the preconstruction spending was 54% competed at the end of last year. Mining began late last summer, and 2.6 million tonnes had been moved by year-end. Total initial capex is $1.23 billion.
