Patrick Godin President and CEO NEW GOLD
What have been the latest developments at New Gold in 2024?
The biggest milestone at New Afton was the commissioning of the gyratory crusher and conveyor system, setting up the C-Zone for high capacity, low-cost, low-emission ore transportation for the life of mine. Construction of the C-Zone cave footprint has also reached the targeted 18 draw bells for hydraulic radius for self-cave propagation, which is considered commercial production, and we will take advantage of the existing excess processing capacity at our mill to ultimately process 16,000 t/d from C-Zone. These two milestones will positively impact our unit operating costs and facilitate a ramp-up in processing rates.
Over the last eight quarters, New Gold has focused on stabilizing operations at Rainy River in Ontario, and delivered consistent results. In 2024 we made excellent progress in development of the Underground Main zone, which contains the majority of underground reserves and will be an important source of higher-grade production in the coming years to supplement mill feed from the open pit and the Intrepid underground zone. The Underground Main project is on track to commence stoping in the first half of 2025 and ramp up to an underground production rate of approximately 5,500 t/d by 2027. We have also improved the predictive maintenance and mill availability, leading to increased recovery rates over prior years as Rainy River becomes a stable operation. Is New Gold considering any acquisitions?
Value can be generated through both inorganic growth and organic growth, but building a new mine can be extremely expensive. I have participated in the construction of two mines ahead of schedule and under budget, but it was under different circumstances than what we have today. A company that has three or four assets that are generating cash flow and have good financial ratios can put in place healthy debt, use part of their cash flow, and have other financing mechanisms such as a revolving credit facility to minimize dilution and ensure that shareholders’ investments are not the last money out. Ideally, for the mine building scenario to work, you need to have more than two producing assets.
Greg Smith President and CEO EQUINOX GOLD
Can you provide an update on Equinox Gold’s 2024 activities?
The Greenstone Gold mine has been our focus during 2024. In April 2024, we processed first ore through the mill and on May 22, we poured first gold. From there, it was a process of ramping up production capacity until achieving commercial production at the end of October.
Also in May, we acquired the remaining 40% of Greenstone to consolidate 100% ownership into Equinox Gold. This nearly billion-dollar transaction was the largest in Equinox Gold’s history. With gold production estimated to average 390,000 oz/y for the first five years, Greenstone is our biggest mine, our lowest-cost operation, and boasts the longest mine life at 15 years, making it a cornerstone asset for Equinox Gold. What challenges have you faced during Greenstone’s ramp-up?
We are very satisfied with how the mine and plant are performing overall. The local municipality of Greenstone, the town of Geraldton, surrounding First Nations communities, and the provincial government have all been incredibly supportive, and Ontario’s mining ecosystem has made it a fantastic place to operate.
On the mining side, pioneering the initial pit was complex, as we had to manage historic soil and tailings from prior mining activities and use clean waste from the pit to construct our tailings facility. In addition, hiring and training haul truck operators proved challenging due to the tight labor market in Ontario. How will the consolidation of Greenstone impact Equinox Gold’s finances?
This transaction was financed roughly 50/50 through equity and debt. We issued shares for the equity portion and took on a US$500 million three-year term loan for the debt portion. Greenstone itself is a cash flow powerhouse, especially at current gold prices, and cash flow from Greenstone will help us pay down the debt incurred for this acquisition, as well as the original construction financing.