Equinox Gold (TSE: EQX) (NYSE American: EQX) extended the life of its Fazenda mine in Brazil to 2033 with an updated mineral reserve and mineral reserve estimate augmented by successful exploration.
The company announced on Tuesday that its new reserve estimate showed a 142 per cent increase in Fazenda’s gold to 763,000 ounces. This represents an increase of 242,000 ounces of mining depletion since its previous update in 2021.
The Fazenda measured and indicated mineral resources rose by 418 per cent to 1.524 million ounces (Moz) of contained gold. These are excluding nineral reserves and accounting for mineral resource conversion. The average grades for Fazenda mineral reserve and mineral resource also increased by 22 per cent and 25 per cent, respectively.
Fazenda is located within the Maria Preta district in the Bahia state of Brazil. It has operated since 1984 as a combined underground and open-pit mine, producing over 3.3 million ounces of gold. Equinox acquired Fazenda in 2020 through its purchase of Leagold Mining.
The updated reserves and resources reflect more than 197,000 metres of drilling (1,599 holes) completed between 2021 and 2023, along with additional geotechnical data, revised mining costs, and updated gold price forecasts used for the mine design.
Equinox stated that the increased drilling density enabled an updated geologic model, which significantly improved connectivity between the mineralized horizons, particularly within the Canto unit, which had previously been modeled as isolated local zones. The revised mine plan includes contributions from nine open-pit and three underground mining areas.
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Future exploration will focus on underground and open-pit options
The company has approved a 60,000-metre diamond drill program for 2025, focusing on replacing mineral reserves and fostering near-mine resource growth. Future exploration programs will evaluate underground and open-pit opportunities around the Fazenda property and assess regional potential in the greenstone belt extending to Equinox’s Santa Luz mine to the north, Heffernan said.
“The success of these efforts now provides a foundation on which to evaluate potential expansion opportunities at the Fazenda mine,” Heffernan said.
Inferred mineral resources have risen by 68 per cent to 4.7 Mt with an average grade of 1.77 g/t gold, containing 266,000 ounces of gold. The updated estimates include new open-pit deposit areas, such as Barrocas Southwest, Papagaio, and Raminhos.
Following the announcement, furthermore, Equinox Gold’s shares experienced a significant intraday gain of up to 9.2 per cent.
The company’s exploration strategy has evidently paid off, with the Fazenda mine now poised to contribute to Equinox Gold’s overall production for an additional seven years. Additionally, the market has responded positively to Equinox Gold’s announcement, viewing the mine life extension as a testament to the company’s operational efficiency and strategic planning. This could lead to increased investor confidence and potentially attract more investment into the company.
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joseph@mugglehead.com
