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Equinox's 2022 growth outlook underwhelms

Americas-focused Equinox Gold is expecting its production to grow in 2022 as it pushes ahead with its goal of becoming a million-ounce/year producer, but the company’s guidance fell short of analyst expectations. 
Equinox's 2022 growth outlook underwhelms Equinox's 2022 growth outlook underwhelms Equinox's 2022 growth outlook underwhelms Equinox's 2022 growth outlook underwhelms Equinox's 2022 growth outlook underwhelms

Equinox's Los Filos mine in Mexico

Nathan Richardson

On January 25, the Canadian company set 2022 consolidated production guidance at 625,000-710,000oz of gold, which compared with production of 602,100oz in 2021. 

"Our 2022 guidance represents the fourth consecutive year of production growth at Equinox Gold and includes production that will come from our new Santa Luz mine in Brazil, which has commenced commissioning," Equinox CEO Christian Milau said. 

For the year, Equinox's consolidated cash costs were set at US$1,080 to $1,140/oz, all-in sustaining costs at $1,330 to $1,415/oz of gold sold, and total capital expenditure at $682 million. 

Canaccord Genuity Capital Markets analyst Dalton Baretto said the update was negative against CG's and consensus estimates, "with lower production, higher costs, and substantially higher capex". 

CG had estimated production of 731,000oz - some 20,000oz above Equinox's top end; cash costs at US$1,074oz; AISC of US$1,301/oz; and total capital expenditure of US$552 million. 

"While guidance at all assets was generally weaker than we had forecast, we note in particular Los Filos, where production guidance is 15% below our estimate, cash cost guidance is 16% above our estimate, and AISC guidance is 19% above our forecast," Baretto said. 

He added that Equinox's non-sustaining growth capital was $62 million "despite delaying the planned [carbon-in-leach] plant for at least two years". The miner said the money included $23 million for stripping of the open pit, $24 million for Bermejal underground development and $14 million for fleet rebuilds and new equipment. 

Equinox's 2022 Los Filos production, cash costs, and AISC guidance ranges are 160,000-180,000oz, $1,400-US$1,475/oz, and $1,625-US$1,700/oz, respectively. 

On January 25, Equinox traded on the Toronto Stock Exchange at C$8.32/share, which was down 4.48% day-on-day. The company's 52-week high/low range was C$14.09/C$7.53 per share. 

The company had a market capitalisation of C$2,507 million. 

Equinox is also listed on the New York Stock Exchange. 

The company has seven operating gold mines throughout the Americas, including Mercedes, which is being sold to Bear Creek.