Greenstone Gold Project on Budget and on Schedule

Equinox Gold Greenstone site
Equinox Gold Greenstone site

GREENSTONE – MINING – Equinox Gold Corp. (TSX: EQX, NYSE American: EQX) is pleased to provide an update on construction progress at its Greenstone Project in Ontario, Canada. The Greenstone Project is being developed as a 60/40 partnership, respectively, by Equinox Gold and Orion Mine Finance Group and will be one of the largest gold mines in Canada, producing more than 400,000 ounces of gold annually for the first five years and more than five million ounces of gold over its initial 14-year mine life.

Recent Highlights (at July 22, 2022 unless otherwise noted)

  • On schedule – The Greenstone Project is 35% complete and on schedule to pour gold in the first half of 2024.
  • On budget – The Greenstone Project remains on budget. At June 30, 2022, 56% of total capital costs had been contracted and Greenstone had spent $315 million (26%) of its $1.23 billion construction budget (100% basis).
  • Positive results from Independent Quantitative Risk Assessment – An independent quantitative risk assessment confirmed the validity of the schedule and construction budget based on detailed engineering and construction progress and concluded the Greenstone Project remains on schedule and on budget.
  • Earthworks 48% complete – Overall earthworks are well advanced and slightly ahead of schedule. Plant site earthworks are 76% complete, tailings facility earthworks are 29% complete and the Highway 11 realignment earthworks are 39% complete.
  • Structural concrete 37% complete and structural steel 21% complete – Structural concrete and structural steel are ahead of schedule and on track to have the majority of buildings essentially complete and ready to enclose by year end so work can continue indoors during the winter months.
  • Pre-production mining commencing Q4 2022 – Four CAT 793 (250 tonne) haul trucks have been delivered and are being assembled and the first Komatsu PC-5500 excavator will be assembled during Q3 2022.

Christian Milau, CEO of Equinox Gold, stated: “The Greenstone team has done great work staying on schedule and on budget, despite the challenges of starting construction during COVID and dealing with inflationary and supply chain issues. The independent quantitative risk assessment of our schedule and construction budget has provided additional comfort that we’re on track to deliver the project as planned in the first half of 2024.

“Excellent earthworks progress during the winter months means we can focus on concrete foundations and steel structures during the summer and fall and enclose the majority of buildings before year end, which will allow us to maintain productivity during the winter months. We look forward to hosting an investor and analyst tour in September to showcase construction progress.”

Results of Independent Quantitative Risk Assessment

Valency Inc., a global provider of construction project assurance solutions and quantitative risk assessments, recently completed a thorough quantitative risk assessment (“QRA”) of the Greenstone Project schedule, material quantities and cost forecast. Prior to the QRA, the Greenstone Project team completed a full review of the Greenstone Project schedule and cost, including equipment and material delivery dates and construction timelines, key assumptions used in the cost estimate including market trends, and material quantity estimates based on final engineering, which was essentially complete at the end of June. The QRA concluded that the schedule and budget as reported in Equinox Gold’s October 27, 2021 news release remain valid and achievable, and the project remains on track to pour gold in the first half of 2024.

Greenstone Project Progress

Greenstone Project construction progress is summarized below, and a number of construction photos are included toward the end of this news release.

Area Progress to Date (at July 22, 2022 unless otherwise noted)
  • More than 1 million work hours complete (at July 15, 2022) with no lost-time injuries
  • Total Recordable Injury Frequency rate of 1.46 per 200,000 hours worked
  • Site mitigation protocols for COVID-19 remain robust and effective
  • Project remains on budget, as confirmed by recent independent QRA. At June 30, 2022:
    • 26% of total cost had been spent
    • 56% of total cost had been contracted
    • 28% of total cost had been awarded on a fixed cost basis
    • Inflationary pressures to date have been mitigated through offsetting savings opportunities and the budgeted contingency
Earthworks, Concrete and Steel
  • Earthworks are 48% complete (including plant site, tailings storage facility, Goldfield Creek diversion, Highway 11 realignment, water management infrastructure)
  • Structural concrete is 37% complete
  • Structural steel is 21% complete
Total Overall Progress
  • Overall project is 35% complete and on schedule to pour gold in the first half of 2024
    • Detailed engineering is essentially complete
    • Procurement is 37% complete
    • Construction is 28% complete
Process Plant
  • Process plant is 14% complete with major equipment delivery tracking on schedule
  • Concrete placement is 33% complete, structural steel erection commenced in late June and is 8% complete
  • Near-term focus is on steel erection and completion of the majority of building enclosures prior to winter
  • Work on underground services will commence in Q3 2022
Tailings Facility and Water Management
  • Tailings facility is on schedule at 29% complete
  • Earthworks and fish habitat for new Goldfield Creek pathway is complete
  • Permanent water effluent treatment plant is on track for commissioning in Q3 2022
Power Plant and Electrical
  • Power plant is 18% complete, with concrete foundations scheduled for completion in August for first genset delivery
  • A lump sum contract for mechanical, piping, electrical and instrumentation has been awarded on budget
  • Connection to the Enbridge natural gas pipeline is on schedule
Site Infrastructure
  • Construction office, administration office, plant site fuel station and reagent cold storage buildings are complete and operational
  • Sewage treatment plant is on track for commissioning in Q3 2022
  • Truck shop and warehouse are 24% complete and on track for availability in Q4 2022
Mobile Equipment and Mining
  • Four CAT 793 250-tonne haul trucks have been delivered and are being assembled
  • First Komatsu PC-5500 excavator will be assembled in Q3 2022
  • On schedule to commence pre-production mining in Q4 2022
  • Commitment agreed on mobile equipment lease financing for $78 million, deferring approximately $53 million of initial capital spend
Infrastructure Repositioning
  • Relocation of Highway 11 is ahead of schedule and 39% complete
  • Relocation of Ministry of Transportation Patrol Yard is 55% complete
  • Hydro One infrastructure relocation is on schedule, major equipment has been ordered

Important Milestones

Construction activities during the summer and fall will be focused on earthworks, concrete foundations and steel structures with the intention of having the majority of buildings essentially complete by year end. Process and power plant equipment will be delivered and installed through the remainder of the year and into H1 2023.

Important construction milestones include:

  • Independent QRA review of schedule and budget: June 2022
  • Process plant steel erection underway: June 2022
  • Administration building complete: July 2022
  • Delivery and assembly of pre-production fleet of four trucks and excavators: Q2-Q3 2022
  • Permanent water effluent treatment plant ready for use: Q3 2022
  • Commence installation of gensets in power plant, power building enclosed: Q3 2022
  • Start of pre-production mining: Q4 2022
  • Truck shop, warehouse, process plant (HPRG, crushing and main buildings) ready to enclose: Q4 2022
  • Leach tanks installed: Q4 2022
  • Ball mills received: Q1 2023
  • Crushers installed: Q3 2023
  • TSF complete: Q4 2023
  • Highway 11 realignment complete: Q4 2023
  • Commissioning: Q1-Q2 2024
  • Gold pour: Q2 2024
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