The board of directors of Canadian mining company Equinox Gold has approved the start of Phase 1 construction at the 45 000 oz/y Castle Mountain openpit gold mine, in California, while studies continue on a 200 000 oz/y Phase 2 expansion.

Phase 1 will operate for three years and, if approved, Phase 2 will operate for an additional 13 years, for total life-of-mine production of 2.8-million ounces of gold.

The initial construction phase at Castle Mountain has an approved budget of $58-million of which about $3.5-million has been spent to date,  Equinox reported on Wednesday.

Early works construction has been under way at Castle Mountain since the third quarter, with activities to date having focused on detailed engineering, procurement, installation of piping and other infrastructure, as well as heap leach earthworks.

The company expects to start installation of leach pad liners in November, with first gold pour targeted for the third quarter of next year.

Castle Mountain will be Equinox Gold's third producing gold mine and its second mine in California. It already produces gold from the Mesquite mine, in California, and the Aurizona mine, in Brazil.

In the third quarter, the Mesquite and Aurizona mines produced 62 656 oz of gold at a mine cash cost of $800/oz and an all-in sustaining cost (AISC) of $953/oz. The production was a significant improvement on the 26 799 oz produced in the June quarter.

The miner sold 62 379 oz of gold, generating revenue of $91.9-million and reported earnings from mine operations of $30.8-million in the September quarter.

The company maintained its production guidance of 200 000 oz to 235 000 oz at an AISC of $940/oz to $990/oz.

CASTLE MOUNTAIN

Phase 1 will consist of a run-of-mine heap leach operation processing primarily 12 700 t/d of stockpiled ore from previous operations. Loaded carbon from Castle Mountain will be trucked to the Mesquite mine, 320 km south, and processed in the Mesquite adsorption, desorption and refining plant, resulting in increased operating efficiencies for both mines.

Phase 2 will increase production to 200 000 oz per year and throughput to 41 000 t/d of ore, of which 2 300 t/d of higher-grade ore will be processed through a milling circuit. Although Phase 2 will operate within the existing mine boundary, the increased mining and water extraction rates will require amendments to permits for the project. 

The Phase 2 feasibility study is under way with completion targeted for the second half of 2020, at which point Equinox will submit the application to amend its existing plan of operations and permits to support the Phase 2 expansion.