The making of a million-ounce operation

Mining quarterly: Equinox aims to produce one million ounces of gold annually by the end of 2022

Ross Beaty, chairman, Equinox Gold: “the strategy is rewarded if you go big” | BIV files

Ross Beaty’s Equinox Gold Corp. (TSX, NYSE-A:EQX) is less than four years old, but it is already a mid-tier gold producer. It has seven operating mines, produced 477,000 ounces of gold in 2020 and has a $2.5 billion market cap.

A pure play gold mining company focused on the Americas, Equinox plans to double production by 2022 and blow past the one-million-ounce mark within about three years.

“Ross is a big thinker, and we were an aggressive team,” Equinox President Greg Smith said at the Association of Mineral Exploration Roundup conference in January. “So we set a focus, or a goal, of one million ounces by 2023. There is nothing magic about one million ounces. This was an indicator of scale.”

The Vancouver company will soon be adding two new gold mines to its portfolio, through the recently announced acquisition of Premier Gold Mines (TSX:PG), which will give Equinox its first toehold in Canada.

Premier’s suite of assets includes an operating mine in Mexico and 50% ownership of the Hard Rock project in Ontario – a permitted, shovel-ready gold project that would add 240,000 ounces of gold to Equinox’s growing production pipeline.

Equinox recently increased its share of the Hard Rock property to 60%. Beaty sees that project as a kind of homecoming and the closing of a circle.

His first gold company was Equinox Resources, which owned a gold exploration project in Ontario. He sold that company in 1994 and went on to found Pan American Silver (TSX:PAAS). Beaty recently announced his plans to retire as chairman of Pan American to focus on Equinox Gold.

“That was the last gold project I worked on in Canada since 1994,” Beaty told BIV News. “ For me personally, the last company of my career is going to be Equinox Gold, and it’s kind of nice to come back to Canada at the end of my career with a very large gold development project in a great jurisdiction in Ontario.”

Equinox Gold was formed at the end of 2017. Its aggressive growth has been a deliberate strategy aimed at riding an anticipated gold bull market.

“Certainly the company was built for what I see as a rising gold price,” Beaty said. “In that context – in a bull cycle, like I think we’re in right now – the strategy is rewarded if you go big. Also, in today’s market, it rewards scale more than it ever has. So growing big quickly is a good business strategy.”

Equinox was formed through a three-way merger between Trek Mining, which had a flagship property – the Aurizona gold development project in Brazil – Newcastle Gold and Beaty’s Anfield Gold Corp.

Beaty credits Vancouver resource investor Marin Katusa for proposing the merger.

“He made the suggestion to me to bring all these companies together,” Beaty said. “The more I thought about it, the more I thought it was a good idea. Then we all sat down in the room and the three company managers, in about 30 minutes, we had the deal cooked and ready to go.”

Beaty assumed the chairman’s role, and Smith, Trek’s former president assumed the role of president. In Year 1 (2018), Equinox spun out its copper assets to form Solaris Copper (TSX:SLS), in which Equinox retained a 30% stake, and bought the Mesquite gold mine in California.

In 2019, the company poured first gold at its new Aurizona mine in Brazil, began trading on the New York Stock Exchange, raised US$260 million from the Mubadala Investment Co. in Abu Dhabi and capped the year off by announcing a major merger with Frank Giustra’s Leagold Mining Corp. (TSX:LMC), which owned four gold mines.

In 2020, Equinox concluded its merger with Leagold, tripled its gold production, started building the Castle Mountain mine in California and ended the year with the announced acquisition of Premier Gold.

Equinox’s guidance for 2021 is 635,000 ounces of gold and 900,000 in 2022.

“We’ll have a path to a production profile of over 1.3 million ounces of gold by the end of 2024,” Smith said.