Mr. Christian Milau reports
EQUINOX GOLD INCREASES AURIZONA AND MESQUITE MINERAL RESOURCES, FILES MESQUITE TECHNICAL REPORT
Equinox Gold Corp. has completed an updated mineral resource estimate for its Aurizona gold mine in northeastern Brazil and an updated mineral reserve and resource estimate for its Mesquite gold mine in California, and has filed a new technical report for Mesquite. All dollar amounts are shown in U.S. dollars. Mineral resources are reported exclusive of mineral reserves.
Highlights:
-
Equinox Gold's consolidated proven and probable (P&P) reserves increased 470 per cent since year-end 2017 to 5.5 million ounces of gold.
- Aurizona measured and indicated (M&I) resources (exclusive of reserves) increased 50 per cent to 692,000 ounces of contained gold.
- Aurizona underground inferred resources increased 115 per cent to 1.1 million ounces of contained gold.
- Mesquite M&I resources (exclusive of reserves) increased 61 per cent to 1.9 million ounces of contained gold.
- Mesquite technical report shows net present value (discounted at 5 per cent) of $203-million and demonstrates mine life extension potential.
Scott Heffernan, executive vice-president, exploration, of Equinox Gold, commented: "The Aurizona resource update captures the success of the 2017/2018 exploration program, demonstrating the potential to both expand the open-pit resource base and develop an underground mine, which could extend production well beyond the current mine life. We are also pleased with the results of the Mesquite technical report and look forward to realizing on optimization and mine life extension opportunities at Mesquite."
Aurizona resource estimate
The updated mineral resource estimate for Aurizona incorporates 13,635 metres of shallow infill and stepout drilling focused on the western end of the Piaba deposit completed since the July, 2017, feasibility study. For the resource update, independent open-pit and underground resource models were prepared to provide an improved basis for assessing the underground potential at Aurizona. Results are as follows:
-
P&P reserves remain unchanged at 971,000 ounces grading 1.52 grams per tonne gold.
- Total M&I resources (exclusive of reserves) increased 50 per cent to 692,000 ounces, including a new underground.
- The indicated resource was 460,000 ounces grading 1.96 g/t Au.
-
Total M&I resource grade increased from 1.57 g/t Au to 1.68 g/t Au.
-
Underground inferred resources increased 115 per cent to 1.1 million ounces grading 1.98 g/t Au.
The updated resource estimation reflects several improvements and changes in methodology over the 2017 model as outlined below:
- Independent open-pit and underground resource models were generated using block sizes of 10 m by five m by six m for the open pit and five m by five m by five m for the underground and a production scenario using standard open-pit and underground long-hole open-stope mining methods.
- The underground resource model is informed by an updated geological model consisting of 16 high-grade gold-bearing structures having an average thickness of three m to six m and coincident with increased veining, sulphide mineralization and grades greater than or equal to 0.7 g/t Au.
- Optimization parameters are unchanged from the 2017 resource estimate except to update adequate infrastructure setback distances.
AURIZONA MINERAL RESERVE AND RESOURCE ESTIMATE AT DEC. 31, 2018
Deposit Area Category Tonnes Grade Gold
(kt) (g/t) (ounces)
Piaba reserves open pit proven 8,438 1.44 392,000
probable 11,398 1.58 579,000
Total reserves P&P 19,836 1.52 971,000
Piaba open pit measured 519 1.29 21,575
indicated 4,811 1.32 204,073
inferred 444 1.90 27,126
Boa Esperanca open pit indicated 144 1.34 6,221
inferred 16 1.33 682
Total open pit M&I 5,474 1.32 231,869
inferred 460 1.88 27,808
Piaba underground indicated 7,317 1.96 459,907
inferred 16,500 1.98 1,051,787
Total Aurizona resource M&I 12,791 1.68 691,776
inferred 16,960 1.98 1,079,595
Notes
Reserves are unchanged from the reserve estimate in the July, 2017, feasibility
study. The update to the Jan. 5, 2017, resource estimate was completed by Trevor
Rabb, PGeo, of Equity Exploration Consultants Ltd. with an effective date of
Oct. 22, 2018. Mineral resources are reported using cut-off grades of 0.6 g/t
Au for open pit and 1.0 g/t Au for underground resources. Open-pit mineral
resources were constrained by pit shells developed using $1,400/ounce gold for
Piaba and $1,350/ounce for Boa Esperanca and a variable elevation datum
separating open-pit from underground resources. Underground resources were
constrained by using a 1.0 g/t Au confining solid. Mineral resources are
reported exclusive of reserves. Mineral resources that are not mineral reserves
do not have demonstrated economic viability. There is no certainty that all or
any part of a mineral resource will be converted into mineral reserves.
Numbers have been rounded to reflect the accuracy of the estimate and may not
sum due to rounding.
The open-pit and underground resource models are separated by a datum defined by a surface that is 20 m below the lower of the upper contact of the fresh rock or the base of the feasibility study reserve pit.
The application of the datum resulted in certain sections of previously classified open-pit resources being reclassified as underground resources, increasing underground inferred resources by 562,000 ounces to 1,052,000 ounces and establishing a new underground indicated resource of 460,000 ounces. Based on the significant increase to underground resources, the company is examining the potential of developing an underground mine at Aurizona, either as a sequential project or concurrently with open-pit mining to increase production with higher-grade feed from underground.
Not included in the current update is 5,500 m of drilling to the northeast of Piaba, which intersected broad intervals of economic-grade gold mineralization, and 1,804 m of drilling at the Tatajuba target, which represents a potential four km extension to the Piaba trend. The company is planning future drill programs for both of these targets.
Mesquite reserve and resource update
Equinox Gold completed its acquisition of Mesquite on Oct. 30, 2018. To comply with certain regulatory requirements in connection with the acquisition, Equinox Gold engaged AGP Mining Consultants Inc. to complete a reserve and resource update and an associated National Instrument 43-101 technical report for the project. The technical report has been filed on SEDAR and is also available for download on Equinox Gold's website. Based on data existing at the time of the acquisition and using a $1,250/ounce base gold price, the technical report shows:
- Life-of-mine gold production from current reserves of 682,800 ounces over 3.25 years of mining and an additional three years of residual leaching;
-
After-tax net present value (discounted at 5 per cent) of $203-million;
-
P&P reserves decrease of 11 per cent to 1.0 million ounces reflecting ounces mined during 2018;
-
M&I resources increase of 61 per cent to 1.9 million ounces of contained gold;
-
Mine life extension potential from:
- Conversion of resources to reserves;
-
Mineralized dumps and leach pads from historical operations;
-
In-pit, near-mine and regional exploration opportunities.
The increase in M&I mineral resources is primarily the result of using a higher gold price ($1,400 from $1,375) in the estimation and including the Rainbow zone, the eastern extent of the Mesquite mineral resource. The Mesquite economics outlined in the technical report do not include near-term production potential from mineralized dumps and leach pads from historical operations that Equinox Gold is currently testing, as discussed in Section 24 of the technical report, or exploration opportunities.
MESQUITE MINERAL RESERVE ESTIMATE AT DEC. 31, 2018
Proven and
Proven reserves Probable reserves probable reserves
Ore type Tonnes Grade Gold Tonnes Grade Gold Tonnes Grade Gold
(kt) (g/t) (ounces) (kt) (g/t) (ounces) (kt) (g/t) (ounces)
Oxide 367 0.46 5,000 26,539 0.44 378,000 26,906 0.44 383,000
Transition - - - 260 0.65 6,000 260 0.65 6,000
Non-oxide 800 0.69 18,000 26,669 0.70 597,000 27,469 0.70 615,000
Total 1,167 0.62 23,000 53,468 0.57 981,000 54,635 0.57 1,004,000
Notes
This mineral reserve estimate has an effective date of Dec. 31, 2018, and is based on
the Mesquite mineral resource estimate dated Dec. 31, 2018, completed by SIM Geological
Inc. The mineral reserve calculation was completed under the supervision of Gordon
Zurowski, PEng, of AGP, who is a qualified person as defined under National Instrument
43-101. The mineral reserves and resources were reported in the technical report
entitled "Technical Report on the Mesquite Gold Mine, Imperial County, California, USA,"
with an effective date of Dec. 31, 2018. The reserves for Mesquite are based on the
conversion of the measured and indicated resources within the current mine plan.
Measured resources are converted to proven reserves and indicated resources are
converted directly to probable reserves. Mineral reserves are stated within the final
design pit based on a $1,250/ounce gold price. The cut-off grade for oxide material
is 0.15 g/t and 0.31 g/t for transition and non-oxide material. The mining cost
averaged $1.45/t mined, processing costs are $1.81/t ore, and general and administrative
expenses were 75 cents/t ore placed. The ore recoveries were 75 per cent for oxide,
and 35 per cent for transition and non-oxide material. Numbers have been rounded to
reflect the accuracy of the estimate and may not sum due to rounding.
MESQUITE MINERAL RESOURCE ESTIMATE (EXCLUSIVE OF RESERVES) AT DEC. 31, 2018
Measured Indicated Measured and indicated Inferred
Ore type Tonnes Grade Tonnes Grade Tonnes Grade Gold Tonnes Grade Gold
(kt) (g/t) (kt) (g/t) (kt) (g/t) (ounces) (kt) (g/t) (ounces)
Oxide 3,900 0.36 56,200 0.36 60,100 0.36 702,000 8,300 0.30 80,000
Transition 100 0.56 200 0.39 300 0.45 5,000 0 0 0
Non-oxide 1,400 0.57 66,100 0.55 67,500 0.55 1,191,000 6,800 0.48 104,000
Total 5,400 0.42 122,500 0.46 127,900 0.46 1,898,000 15,000 0.38 184,000
Notes
This mineral resource estimate was prepared by Robert Sim, PGeo, SIM Geological Inc., and Bruce
Davis, FAusIMM, BD Resource Consulting Inc. The estimated mineral resources represent the
material located between the surveyed topographic surface at Dec. 31, 2018, and the ultimate
resource-limiting pit shell generated at year-end 2018, excluding any surface stockpiles.
Cut-off grade for oxide material is 0.134 g/t Au and 0.288 g/t Au for transition and non-oxide
material. Mineral resources are reported exclusive of mineral reserves. Mineral resources that
are not mineral reserves do not have demonstrated economic viability. There is no certainty that
all or any part of a mineral resource will be converted into mineral reserves. It is expected
that a majority of inferred mineral resources could be upgraded to indicated or measured
resources with additional exploration. Numbers have been rounded to reflect the accuracy of
the estimate and may not sum due to rounding.
Equinox Gold consolidated reserves and resources
Equinox Gold's consolidated P&P reserves at Dec. 31, 2018, were 5.5 million ounces, a 470-per-cent increase compared with 971,000 ounces at the end of 2017 as a result of the Mesquite acquisition and completion of a prefeasibility study for Castle Mountain. M&I resources at year-end 2018 were 3.6 million ounces, a 20-per-cent decrease compared with 4.4 million ounces at the end of 2017 as a result of the majority of Castle Mountain M&I resources upgrading to P&P reserves upon completion of the prefeasibility study.
EQUINOX GOLD CONSOLIDATED MINERAL RESERVE ESTIMATE AT DEC. 31, 2018
Proven and
Proven reserves Probable reserves probable reserves
Project Tonnes Grade Gold Tonnes Grade Gold Tonnes Grade Gold
(kt) (g/t) (ounces) (kt) (g/t) (ounces) (kt) (g/t) (ounces)
Mesquite 1,167 0.62 23,000 53,468 0.57 981,000 54,635 0.57 1,004,000
Aurizona 8,438 1.44 392,000 11,398 1.58 579,000 19,836 1.52 971,000
Castle Mountain 136,611 0.58 2,558,775 60,978 0.51 1,004,318 197,589 0.56 3,563,093
Total 146,216 0.63 2,973,775 125,844 0.63 2,564,318 272,060 0.63 5,538,093
Notes
Numbers have been rounded to reflect the accuracy of the estimate and may not sum due to rounding.
EQUINOX GOLD CONSOLIDATED MINERAL RESOURCE ESTIMATE (EXCLUSIVE OF RESERVES) AT DEC. 31, 2018
Measured Indicated Measured and indicated Inferred
Project Tonnes Grade Tonnes Grade Tonnes Grade Gold Tonnes Grade Gold
(kt) (g/t) (kt) (g/t) (kt) (g/t) (ounces) (kt) (g/t) (ounces)
Mesquite 5,400 0.42 122,500 0.46 127,900 0.46 1,898,000 15,000 0.38 184,000
Aurizona 519 1.29 12,272 1.70 12,791 1.68 691,776 16,960 1.98 1,079,595
Castle Mountain 24,100 0.56 20,400 0.52 44,500 0.54 770,000 171,395 0.40 2,210,000
Elk gold 340 7.07 703 5.96 1,043 6.32 211,900 1,097 5.94 209,600
Total 30,359 0.62 155,875 0.59 186,233 0.60 3,571,676 204,452 0.56 3,683,195
Notes
Mineral resources are reported exclusive of reserves. Mineral resources that are not mineral
reserves do not have demonstrated economic viability. There is no certainty that all or any part of
a mineral resource will be converted into mineral reserves. Numbers have been rounded to reflect
the accuracy of the estimate and may not sum due to rounding.
About Equinox Gold Corp.
Equinox Gold is a Canadian mining company with a multimillion-ounce gold reserve base, gold production from its Mesquite gold mine in California, and near-term production from two past-producing mines in Brazil and California. Commissioning is under way at the company's Aurizona gold mine in Brazil and the company is advancing its Castle Mountain gold mine in California with the objective of ramping up phase 1 operations in early 2020.
Qualified persons and technical disclosure statement
Scott Heffernan, MSc, PGeo, the company's executive vice-president, exploration, and qualified person under National Instrument 43-101, has reviewed and verified that the technical information contained in this news release is accurate and approves the written disclosure of this information.
Aurizona
The 2018 Piaba open-pit, Piaba underground and Boa Esperanca open-pit resource estimates, with an effective date of Oct. 22, 2018, were prepared by Trevor Rabb, PGeo (EGBC No. 39599), BSc, who is a qualified person within the meaning of NI 43-101. Mr. Rabb is an employee of Equity Exploration Consultants Ltd. and is considered to be independent for the purposes of Section 1.5 of NI 43-101. The Aurizona reserve estimate was disclosed in the "Feasibility Study on the Aurizona Gold Mine Project" prepared by Lycopodium Minerals Canada Ltd. with an effective date of July 10, 2017, which is available for download on SEDAR. The mineral reserve estimate has an effective date of May 29, 2017, and is based on the mineral resource estimate dated Jan. 5, 2017, and prepared by SRK Consulting (Canada) Inc. The mineral reserve calculation was completed under the supervision of Gordon Zurowski, PEng, of AGP, who is a qualified person as defined under NI 43-101. Mineral reserves are stated within the final design pit based on a $1,056-per-ounce gold price pit shell with a $1,200-per-ounce gold price for revenue. The cut-off grade was 0.60 g/t Au for the Piaba pit area and 0.41 g/t Au for the Boa Esperanca area. The mining cost averaged $2.32/tonne mined, processing averages $11.30/tonne milled and G&A was $2.84/tonne milled. The process recovery averaged 90.3 per cent. The exchange rate assumption applied was 3.30 reais equal to $1 (U.S.). Numbers may not sum due to rounding.
Mesquite
The Mesquite reserve and resource estimates were disclosed in the technical report entitled "Technical Report on the Mesquite Gold Mine, Imperial County, California, USA,"
prepared by AGP with an effective date of Dec. 31, 2018, which is available for download on SEDAR. The Mesquite resource estimate
was prepared by Robert Sim, PGeo, SIM Geological Inc., and Bruce Davis, FAusIMM, BD Resource Consulting Inc. The Mesquite reserve estimate was based on the Mesquite mineral resource estimate prepared by SIM Geological Inc. The mineral reserve calculation was completed under the supervision of Gordon Zurowski, PEng, of AGP, who is a qualified person as defined under NI 43-101.
The
estimated mineral resources represent the material located between the surveyed topographic surface at Dec. 31, 2018, and the ultimate resource-limiting pit shell generated at year-end 2018, excluding any surface stockpiles, and are reported exclusive of mineral reserves. Cut-off grade for oxide material is 0.134 g/t Au and 0.288 g/t Au for transition and non-oxide material.
The reserves for Mesquite are based on the conversion of the measured and indicated resources within the current mine plan. Measured resources are converted to proven reserves and indicated resources are converted directly to probable reserves.
Mineral reserves are stated within the final design pit based on a $1,250/ounce gold price. The cut-off grade for oxide material is 0.15 g/t and 0.31 g/t for transition and non-oxide material. The mining cost averaged $1.45/t mined, processing costs are $1.81/t ore and G&A was 75 cents/t ore placed. The ore recoveries were 75 per cent for oxide, and 35 per cent for transition and non-oxide material. Numbers may not sum due to rounding.
Castle Mountain
The Castle Mountain mineral reserve and mineral resource estimates were disclosed in the "NI 43-101 Technical Report on the Preliminary Feasibility Study for the Castle Mountain Project" prepared by Kappes, Cassiday and Associates with an effective date of July 16, 2018, which is available for download on SEDAR. The mineral reserve estimate with an effective date of June 29, 2018, is based on the mineral resource estimate with an effective date of March 29, 2018, that was prepared by Don Tschabrun, SME, RM, of Mine Technical Services. The mineral reserve was estimated by Global Resource Engineering LLC with supervision by Terre Lane, MMSA, SME, RM. Mineral reserves are estimated within the final designed pit which is based on the $850/ounce pit shell with a gold price of $1,250/ounce. The minimum cut-off grade was 0.14 g/t gold and 0.17 g/t gold for phases 1 and 2, respectively. Average life-of-mine costs are $1.39/tonne mining, $2.11/tonne processing, and 80 cents/tonne processed G&A. The average process recovery was 72.4 per cent for ROM and 94 per cent for mill/CIL. The mineral resource is based on a gold cut-off grade of 0.17 g/t. The mineral resource is contained within an LG shell limit using a $1,400 gold price as well as cost and recovery parameters presented in the technical report. Numbers may not sum due to rounding.
Elk gold
The Elk gold mineral resource estimate has an effective date of Aug. 22, 2016, as reported in the "Technical Report on Resources of the Elk Gold Project" completed by Robert Wilson, PGeo, Gary Giroux, PEng, and Antonio Loschiavo, PEng, with an effective date of Aug. 22, 2016. The mineral resource calculation was completed under the supervision of Gary Giroux, PEng, who is a qualified person as defined under NI 43-101. The constrained resource was calculated using a gold price of $1,232 (U.S.)/ounce. Open-pit resources are reported at a 1.0 g/t gold cut-off grade and potential underground resources are reported at a 5.0 g/t cut-off grade. The grade reported is the average grade of the resource both in and underground. Numbers may not sum due to rounding.
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