How did Equinox Gold come to life and what is the current footprint of the company?
Equinox Gold was formed in 2017 through a series of mergers. Our initial thesis was that gold had been undervalued for some time and was poised to come back up, given its store of wealth potential.
Over the last five years we bought a number of operating mines but also built new mines from scratch, and currently have seven operating mines in California, Mexico and Brazil. Our ambition is to produce one million ounces of gold per year, and we’ve got a pipeline of development and expansion projects that should get us there.
At the moment, we are concentrating on development of the Greenstone Mine in Ontario, Canada, which is our biggest project to date and will be the highest-grade open pit gold mine in Canada. Created in collaboration with Orion Mine Finance, this project will be in production less than one year from now and is expected to produce 400,000 ounces of gold per year for the first five years. With an initial 15-year mine life, and mine life extension potential, Greenstone is set to become a globally relevant gold mine.
Gold has been volatile recently and the markets have been unstable. Have you seen these issues impact your business in any way?
In 2022, the gold value decreased from almost $2,000 to $1,600 per ounce and, at the same time, gold companies around the world were experiencing significant inflation reflected in the cost of fuel, consumables used for processing, and higher wage expectations. On top of that interest rates were going up, so 2022 was challenging. To release as much pressure as possible, we started to look for new opportunities to both reduce costs and maximize operating efficiencies, to increase production and get more efficient across all our activities. Thankfully, by the end of last year cost inflation had flatlined and the gold price has stayed pretty stable in the $1,900 per ounce range, and we are now in a profitable position. Volatility is the middle name of mining, and we must get comfortable with these fluctuations in margins, especially considering the geological, political, environmental, and social challenges we face on a daily basis.
How can the general public differentiate between a mining company that is ESG compliant and one that is not?
Mining is an industry people do not know much about, but are completely reliant on for their quality of life. Western mining companies that trade on a public stock exchange are required – by the regulators or investor demands – to publish comprehensive reports focused on environmental and social performance, and corporate governance and ethics. Mining companies are also required to abide by strict social and environmental regulations to maintain their operating permits. While our projects have an inevitable impact on the environment, we go to great lengths to minimize those impacts and remediate the land when the project is complete. We also bring significant economic and social improvements to local communities in the form of employment and business opportunities, infrastructure development, and support for education, healthcare and social improvements. We are extracting a limited resource that will be ultimately exhausted, so the key to sustainability is to leave our stakeholders with social and infrastructure improvements that last beyond the life of the mine, and new skills and businesses that can support other projects in the region. As an industry we have not historically been very good about reporting on the positive legacy of our projects, so it’s good to see increased emphasis on ESG reporting so that not only will investors have a way to compare performance between companies, but the general public will have a better understanding of how mining companies operate.
To what extent is Equinox Gold implementing digitization and automatization solutions, and how much do they weigh in your future success?
Mining is typically slow to adopt new technology, but electric and autonomous equipment is improving and gaining traction. As we are a very data heavy industry, from exploration results to key performance indicators, new AI and data analytic tools are very useful for increasing efficiency and reducing costs. At Equinox Gold, we are already using some of these technologies to improve efficiencies and performance at our operating mines. In addition, in Brazil we implemented arrangements to power three of our mines with solar and wind energy. We have employed individuals across a range of disciplines who are monitoring these trends and are tasked with identifying continuous improvement opportunities that will bring value to our business.
What is the main challenge that you would like to see solved in the industry?
One of the biggest issues right now is the time it takes from discovery through permitting, and into construction. In Canada it can take ten to twenty years to bring a mine online, and after spending millions of dollars on exploration, many times it is uncertain if the project is going to be approved at all. Furthermore, the propensity to nationalize resources, as some countries have done with lithium, will lead to increased costs and scarcity, making the green transition even more challenging.
What are the main objectives you would like to achieve in the next few years?
We’ve clearly stated our plan to become a million-ounce-a-year gold producer, but really it’s about growing to the point where we have achieved a certain scale that increases our optionality to continue providing value. After the aggressive growth mode of the last five years, our near-term priority is getting Greenstone into production and then continuing to improve efficiencies and enhance our project pipeline, with the ultimate goal of becoming the Premier Americas Gold Producer.
