A slower than expected ramp-up in production at the Greenstone mine has caused Equinox Gold to slash its annual production target for its new flagship northwestern Ontario operation.
After entering commercial production last November, Equinox said last week that production has fallen short of expectations at the open-pit mine on Highway 11, south of the town of Geraldton.
The original guidance for Greenstone for this year was 300,000 to 350,000 ounces. It’s now being reduced to 220,000 to 260,000 ounces.
Production guidance is a forecast or estimate of the amount of mineral or metal that a mining company expects to be produced in a year.
Cash costs and the all-in-sustaining costs per ounce at Greenstone have also significantly increased.
Equinox president-CEO Greg Smith attributes the slow-down to the availability of equipment, particularly with the primary loading fleet, which has impacted mining rates and is delaying access to high-grade ore zones within the pit.
“Further, year-to-date mined grades have been below expectations, in part due to higher-than-anticipated dilution,” he added.
Equinox is in the process of merging with Calibre Mining. That transaction is expected to close at the end of this month which will position Equinox has Canada’s fifth largest gold producer, behind Agnico Eagle.
The combined company will have six mines in Canada, the U.S., Nicaragua and Brazil. Equinox is building a new mine, dubbed Valentine, in central Newfoundland, which is expected to enter production by year’s end.
Calibre Mining president-COO Darren Hall, the incoming president and COO of Equinox, who’s working on integrating the assets of the expanded company said a “reset of expectations is necessary.”
“While Greenstone is one part of the broader portfolio, it is a key asset and an immediate focus. The company has mobilized additional human capital to support the site, and an improvement and optimization plan is underway.”
Mining rates in May improved by 25 per cent over the first-quarter performance at Greenstone, which Hall anticipates will be built on quarter by quarter. Stronger production is expected in this year’s second half.
The company in a June 11 news release said that it’s seeing improvement on the processing side as the performance to date has also been “below plan.”
In the mine’s quarterly news release, the company reports the processing mill continues to ramp up throughput with the focus on identifying and improving bottlenecks.
Greenstone said it’s still in hiring mode, having recruited part-time truck drivers to “hotseat,” meaning they are spelling the full-time drivers taking breaks in order to keep the trucks rolling. A new building is being erected along the haul road to create a comfortable place for employee breaks. This building will include a dry room.
On the mobile equipment side, four new Cat 793 haul trucks were brought into service, boosting the size of the haul fleet to 29. A new Komatsu PC5500 face shovel was also purchased.
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