Equinox Gold (TSE: EQX) (NYSEAMERICAN: EQX) has secured 20-year land access agreements with the three communities surrounding its Los Filos mine in Guerrero, Mexico, clearing the way for a gradual restart of heap leach operations after months of uncertainty.
Announced on Friday, the agreements also allow the company to resume technical studies aimed at expanding one of Mexico’s largest gold deposits through a potential new processing facility.
The agreements cover the communities of Carrizalillo, Mezcala and Xochipala, which host the Los Filos operation. Consequently, Equinox Gold has begun preparations to restart mining activities while advancing engineering work on the project’s long-term future.
Chief executive officer Darren Hall said the agreements reflect a shared commitment between the company and local communities to responsible mining and sustainable economic benefits. He added that the deals provide a stable foundation for future investment while strengthening relationships with local stakeholders.
Hall said the company will now begin planning the heap leach restart. Additionally, it will continue exploration drilling and engineering studies for a possible carbon-in-leach processing plant, commonly known as a CIL facility.
A CIL plant recovers gold more efficiently than heap leaching by processing crushed ore in large tanks using activated carbon. Although construction would require significant capital, the technology can improve gold recovery rates and increase annual production.
Los Filos remains one of Equinox Gold’s largest development assets. Based on a June 30, 2022, mineral estimate, the property contains 5.4 million ounces of proven and probable gold reserves. Furthermore, it hosts 7.9 million ounces of measured and indicated resources, excluding reserves, plus another 3.2 million ounces of inferred resources.
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Equinox taking a phased expansion approach
Hall said management believes additional exploration could further expand the deposit. He also said updated engineering studies will examine higher processing rates than earlier plans while reassessing project economics using stronger gold prices and revised operating assumptions.
The previous technical report used a long-term gold price assumption of USD$1,450 per ounce. However, gold prices have risen substantially since then, potentially improving the project’s economic outlook if development moves forward.
The company said it will take a phased approach to future expansion. The review will consider technical, operational, permitting and community factors before any major investment decisions.
In addition to the land agreements, the parties approved a broader framework governing labour practices and local supply contracts. Consequently, Equinox Gold said it intends to apply transparent standards when hiring workers, selecting contractors and managing community relationships.
Restart activities have already begun. They include environmental remediation, permit work, rehiring and retraining employees, and negotiating contracts with suppliers.
Meanwhile, the company said it will continue applying the Mining Association of Canada’s Towards Sustainable Mining protocols at Los Filos as part of its environmental and social performance commitments.
Despite the restart plans, Equinox Gold has not included any production from Los Filos in its 2026 guidance. The company continues to forecast annual production of between 700,000 and 800,000 ounces of gold from its operating mines while technical studies and restart work continue at the Mexican project.
