Castle Mountain achieved phase one commercial production in November 2020, from a 12,700 tonnes per day run-of-mine heap leach facility. The phase two expansion will increase this to 45,350tpd and add a 3,200tpd million and leach/carbon-in-leach plant for higher grade ore.
It will produce a total of 3.2Moz at an overall average recovery of 82% over a 14-year mine life and an average all-in sustaining cost of $858/oz, with 1.1Moz from the mill at an average recovery of 94% and 2.1Moz from the heap leach at an average recovery of 67% following a $510 million capital investment.
The expansion would yield an after-tax net present value of $640 million at a 5% discount rate and an internal rate of return of 18% at a $1,500/oz gold price, increasing to $1.1 billion and 25% at $1,800/oz gold.
"Castle Mountain will be a significant economic driver in the region and a long-life cornerstone asset for Equinox Gold," said Equinox Gold CEO Christian Milau.
Castle Mountain hosts a proven and probable reserve of 4.2Moz grading 0.51 grams per tonne and a measured and indicated resource of 1.5Moz grading 0.62g/t.
Phase two will operate within the same mine permit boundary as phase one, however, modifications to mine and reclamation plan elements, including increased land disturbance, mining and water extraction rates, will require updates to existing permits. It is also expected to require an updated environmental review as well as several new state and federal permits and amendments.
Equinox Gold is reviewing opportunities that could result in optimised land use as well as initial capital and operating cost savings. It has also completed and is assessing a study examining the potential to use solar power at Castle Mountain. Initial results demonstrate the solar plant levelized cost of electricity would be 5c/kWh, compared to approximately 10c/kWh when connected to grid electricity, for net savings per year of $1.9 million based on a capital cost of $12.8 million for a 10 MWAC photovoltaic solar plant providing 40% of the site power requirements.
Shares in Equinox Gold are trading at C$10.47, valuing the company at $2.5 billion.